5 Reasons to Avoid Dropshipping When Selling on eBay

 Every day people ask me why dropshipping isn't cool on eBay and every day I give them the same list of five reasons. So, I thought I'd post it as an article for everyone to learn. Here are the five reasons why eBay sellers should avoid dropshipping (in reverse order).

#5 - Out of Stock Equals Bad Feedback

Dropshippers often run out of popular items. This means that after you sell the item on eBay and then go to your supplier to get the item purchased through Dropshipping, you know that the item is not in stock. Then you need to break the bad news to the buyer and you will usually get negative feedback in return. The eBay forums are full of sellers who are devastated by the bad feedback they've received with their dropshipping experience. It was also littered with complaints from buyers who hadn't received the item they ordered because the seller was using a dropshipper, and after the sale, the buyer reported that the item was out of stock.

#4 - PayPal will keep your money

About a year ago, in January 2008, eBay and PayPal published new policies. One of them puts HOLD on the money. Here is the eBay policy quote:

 "In a small percentage of cases where the risk of buyer dissatisfaction has been determined to be higher, PayPal may delay releasing payment funds to the seller until the buyer has left positive feedback or 21 days have passed without dispute. , claim, chargeback, or reversal made in respect of this transaction.

Any new eBay seller trying to use drop shipping as a way to source products will find that he can only access his money after the product arrives at the customer's doorstep. This removes one of the most attractive aspects of dropshipping: the ability to sell a product and then use the buyer's payments to finance the purchase. With PayPal holding your funds for 21 days, this will not be possible.

#3 - Directly from the competitive source

This is a relatively new phenomenon resulting from the recent explosion of "direct from China" direct selling companies. In a nutshell, this means that many of these dropshipping companies sell items directly on eBay. They are "double dip". Although they offer a website that will offer drop shipping products to eBay customers directly from China, they also sell the same products on eBay. To see this, simply search the electronics category on eBay. Many listings indicate the location of the item in Hong Kong or another location in China. Yes, the sellers themselves compete with their customers.

#2 - Profit margin below $0

It is not an error. The profit margin you will find when using dropshipping to sell on eBay is usually zero. No. No. In fact, most people who first try to use a dropshipper to supply their eBay products end up frustrated and crying, "The price a dropshipper sells for the product is higher than the price the product sells for." eBay". And they are right. You see, the phrase is about buying in quantity. When you use drop shipping, you only buy one item and can't wait for the wholesale price.

Now, why paying more for an item might not be a big deal if it's selling for the highest price at your local store? That's a big problem when you're trying to sell on eBay. eBay is where people go to get a bargain. They don't want to pay full retail price, and chances are they can find the item very cheaply if they do a little searching on eBay. Because even if you can't sell an item for the lowest possible price (because you're dropshipping), there are thousands of other eBay sellers who can. So it is true. Often the price you get from your drop shipping provider is more than what the product sells for on eBay.

#1 - Dropshipping doesn't work on eBay

Considering the other four reasons not to dropship when selling on eBay, it might seem like a no-brainer. Should have! The bottom line is that dropshipping and eBay are a toxic combination. While eBay is a great place to sell products to people looking for a bargain, dropshipping is a way to buy products at the highest possible "wholesale" price. And while your dropshipper may have thousands of products, they probably have thousands of customers just like you.