Making Ebay And Drop Shipping Work For You
I will come right to the point
I will come right to the point. EBay drop shipping and eBay wholesale products suppliers are hot topics right now. Whether or not you succeed using a business model that relies on eBay drop ship products sourcing may depend on your understanding of a few key points.
To begin with, it is important to consider the following points: (1) eBay terms of service with regard to drop shipping, (2) the profit margin of the products you want to sell, (3) product research, (4) the factors that make the eBay selling environment unique, (5) the drop shipping solution versus other supply solutions, (6) and very important--the costs of eBay.
Before selling anything on eBay it is important to study the additional eBay costs so that you'll know how much you need to make to make a profit. Some of the extra costs include: (1) listing fees, (2) final value fees, (3) image hosting fees (can be optional),(4) fees for extras such as bold type, extra space for your listing, larger picture size (optional), (5) "Buy it Now" fees (optional), (6) fixed price fees (optional), (7) PayPal or other payment processor fees.
If you are selling in a highly competitive market, such as cell phones and iPods, it will be particularly important to factor these expenses into the cost of your item.
So, what does all of this have to do with drop shipping and eBay? This is especially important for eBay because of the potential for dropshipping to add cost to your auction. In its simplest form, drop shipping works like this. You advertise products to your customers by any means you choose. This could be through an ecommerce website, newsletter, or even a direct mail catalog. When someone purchases, you then purchase the product from the drop ship company, who stocks your inventory and who then ships the item out to your buyer under your business name. Your profit depends on how much you mark-up the price of your goods.
A drop shipping company is not necessarily the same thing as a true wholesale company. Remember, the drop shipper is merely the distributor who stores and ships products under your business name. A true wholesaler is a company with a special license to purchase products directly from a manufacturer and sell to retailers without charging sales tax. Retailers, or resellers (that's you) then mark the cost up and sell to the public.
A true wholesale company might also offer drop shipping as an extra service. Sometimes you can negotiate drop shipping with a wholesale distributor. Some drop shippers are also true wholesalers. Many drop shippers, however, such as Doba or Shopster, are essentially discount retail businesses. They have already purchased or negotiate the purchase of goods from wholesalers and then sell to you at a discount. The result of this is that the costs of using the big warehouse drop shipper are usually higher than the cost of goods purchased from a true wholesaler.
What this means for eBay drop shipping, is that you have to do the product research to find hard to find items that are in high demand. If you plan to sell on eBay, it's important to make sure that the eBay selling environment isn't too competitive. If everyone else is selling the same item, you may not be able to make a profit, and you might even lose money if your auction doesn't sell.
You can succeed with eBay drop shipping, but please take the time to research your products, assess demand and eBay competition, and figure out the cost of selling and your expectation of profit.
by: Strand Davis
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