Earn using eBay and dropshipping

I briefly explained dropshipping in my last post, but this post is dedicated entirely to the subject of using dropshippers and eBay to earn money and even start your own online business. During this post i will explain the do's and dont's as well as the advantages and disadvantages to dropshipping. Hopefully by the end of this post you will have some knowledge on how to get started with your very own online store.

What is dropshipping?

Dropshipping is a way of selling products with little to no start up capital and not having to personally hold stock. You sign up for a dropsipping account with a company that offers single item purchases at wholesale prices. You then build your storefront, be it a website, blog or eBay store and sell the items at retail price. When you make a sale at retail price you then purchase the product from the dropshipper, forward your customers details and the products will be shipped directly to your customer. The profit you make is the difference between the wholesale price and your mark up price.

Pros

Little to no start up capital - Dropshipping gives you the oppertunity to start making sales online right away with little to no upfront costs.

No need to hold inventory -Holding inventory can be a huge expense as large stock volumes would require you to rent a separate property just for this purpose.

Wider product range - With dropshipping you have access to millions of products and do not have to worry about storage.

Lower shipping costs - Dropshipping will also allow you offer lower prices due to savings you will make on shipping since your products will only need to be shipped once, straight to your customer.

No need to worry about bad product choices - Another clear bonus is that you will not be lumbered with tons of stock if a particular product doesn't sell so well, and you won't have lost out as you haven't actually paid for anything yet.

Disadvantages

Dropshipping can have little to no disadvantages, providing you choose a reputable dropshipper for your services.

Hard to find - Good dropshippers are hard to find thanks to the many scams floating around the dropshipping market. A lot of company's call themselves dropshippers but what they actually do is act as a middle man. They set up websites acting as dropshippers but they do not actually hold any inventory, and they simply use dropshipping services themselves and mark the cost of their products up a little.

Fees - Company's as described above will usually charge a fee for you to open a dropshipping account with them. At this point i would like to advise you NEVER to pay a fee to become part of a dropshipping program. Most reputable dropshipping company's will never charge you any additional fees. If a company does require a fee then the chances are it is going to be a huge waste of time and money for you. If you do decide to pay a fee, always do some research on the company beforehand.

Returns - Another thing you should always look into when choosing a dropshipper is their returns policy. If you choose a dropshipper with no returns policy, chances are you will eventually end up with returns for which you have to cover the refund.

Tips

Always check how long the company has been in business for. Most dropshipping company's go out of business pretty quickly, so finding a company that has long term establishment is key criteria to success. The last thing you want is to build a customer base, only to find that a few months down the line your supplier has gone out of business, leaving you with no stock to sell until you find another dropshipper that offers the same products and prices.

I greatly advise against paying any kind of fee to create a dropshippeer account. Any company that charges a setup fee or a monthly fee should be steered clear of unless you do your research first and find out that the company is actually a reputable one.

Always test their support - Before you settle down with a dropshipper, you should always test their support to see how long they take to get back in touch and if they do so in a professional manner. I recently contacted a company to find out about their dropshipping services. It took them over a week to reply and when they finally did, they replied with a one sentence answer of "Yes, we can offer a dropshipping service". My email included around 10 questions, so as you can imagine, this reply showed no professionalism whatsoever. As well as the amount of time it took for their reply, i scratched that company from my list right away. This is just a real world example for you to base your decisions on.

Try to find a niche in the market - Anyone can take advantage of dropshipping and for this reason you will find that the market (especially on eBay) for 99% of the products that dropshippers offer is extremely saturated. Do some research, try to find out how many people are selling the products you want to sell and for what prices. If you find a product that no one else seems to be selling, do some more research and find out if there is demand for such a product. There are two possibilities as to why the product is not being sold anywhere else. Either you have found a niche in the market, or there is simply no demand for the product so no one is wasting their time trying to sell it. Research, research and more research is key.

Now we have got all that out of the way, i know the big question on your lips is "How do i find a good dropshipper?." Well, the only answer to this question is research. There are thousands of dropshippers out there but as i said, good ones are hard to come by, especially for someone just learning the ropes. Its especially difficult to find a good dropshipper, that at the same time offers the products you want to sell and who's products are not already littering the market. Again, the key thing here is research. I would also recommend not setting your product choice in stone until you have carried out a lot of research, as it may turn out that the product you wish to sell, won't. Keep your options open. I would also recommend contacting local company's, or com pays that do not have an online presence and ask if they can provide a dropshipping service. A lot of company's out there may not provide dropshipping but might be willing to arrange such a service on request. From my research, i have realised that a lot of company's that don't (or at least not publicly) offer a dropshipping service can usually offer the service if you are willing to contact them and request it.

Another great way to find dropshippers is to purchase access to a database such as worldwidebrands. I really do recommend worlddwidebrands if this is the route you choose, as they are constantly up to date with new dropshippers and wholesalers and are an eBay verified business. While carrying out your research, watch out for similar offers. There are tons of scam sites out there selling what they describe as the ultimate dropshipping and wholesale lists or something along those lines. Most of these lists (I have bought a few including some from eBay) are compilations of links to dropshippers that a) are often outdated, b) are usually links you can find from a quick Google search and c) a lot of the links are repeated over and over in some of the lists.