Dropshipping is a low-cost and relatively easy online business model that anyone can get into. However, dropshipping on certain eCommerce platforms such as eBay can have major challenges.
Maybe you have been struggling trying to figure out how to dropship effectively on eBay. While there are those that manage to do so successfully, for the most part, it isn’t as easy as it seems.
I’ll cover the obstacles of dropshipping on eBay and why it is probably a better option to sell wholesale items on eBay instead.
Reasons To Sell Wholesale Items On eBay Versus Dropshipping
eBay carries millions of products and it is difficult to find a product that you can sell and earn a profit from.
That is why dropshipping on eBay is challenging. Some dropshipping suppliers do not offer wholesale pricing and some even charge fees per item sold.
Below are some reasons why you may want to consider buying and selling wholesale products versus dropshipping on eBay.
Competition With Other Dropshippers
There is rarely a product that you can dropship that isn’t being dropshipped by hundreds of other eBay members.
Sometimes you’ll find the dropshipping suppliers dropshipping the same products which can mean they are in direct competition with you. This is especially the case if you are using AliExpress as a supplier.
Running Out of Stock
One issue to consider is that dropshippers often run out of stock when it comes to specific products. This is true of popular items and if you have posted an item for sale and it is no longer available, that can leave you with upset customers that may leave negative feedback.
Long Shipping Times
Depending on who your dropshipping suppliers are, you may deal with longer than usual shipping times. Ebay users are accustomed to fast shipping so you’ll likely spend a lot of time messaging back and forth if a customer is demanding to know where their item is. Even when they receive it, they could leave negative feedback.
Lower Profit Margins
Again, this depends on your dropshipping suppliers. Some suppliers do not offer wholesale pricing. Therefore, it makes it difficult to compete with other sellers that are selling the same products at a lower price. Add in your eBay and PayPal fees and your profit margin is non-existent.
So How Do Some People Manage To Make Money Dropshipping On eBay?
As I mentioned earlier, many dropshipping suppliers are dropshipping on eBay themselves. They are often the manufacturers of the products so they can offer them at extremely low pricing.
Most of the time, you have no way of competing with the prices offered leaving you with little to no profit margins. Other people use special software that enables them to list thousands of items at any one time.
The method behind this is that the more items you have listed for sale, the higher the chance that someone may click on your listings and buy from you.
The problem that you may run into is that you aren’t necessarily specialized in any one niche. It is essentially playing a numbers game. The more you have listed, the higher the chance you’ll make sales.
Keep in mind there are a lot of people using software to do just that. You are competing with them as well. Depending on the software being used, items are posted from Amazon, Walmart, Lowes, and other big name stores.
Selling Wholesale Items On eBay May Work Out Better
So how is selling wholesale items any different when there is still tons of competition? For one thing, you can do market research before you buy wholesale products to find out what is in demand.
Also, with wholesale items, you have more control over your inventory and you can create bundles which help you to stand out among other sellers.
Create a Niche For Yourself
With so much competition between sellers on eBay, you have the opportunity to set yourself apart. You can niche down the category that you want to sell in.
Let’s say you want to sell socks. You can create a brand and niche for yourself by selling socks that have food patterns on them. Or you could sell funny socks or animal print socks.
You can even sell all of the above and bundle together different socks as a special deal. You have various opportunities when you control your inventory.
You Have More Competitive Pricing
When you buy items wholesale, you get a better price than you do with some dropshipping suppliers. Therefore, you can compete with your pricing and still earn a profit.
You Have Better Control Over Shipping
Remember that some dropshipping suppliers have longer shipping times which can be a deterrent for potential customers. Most eBay shoppers are accustomed to fast shipping.
Since you have control over your inventory, you can get your packages shipped out same day or next day. Fast shipping leads to more positive feedback which is good for your eBay seller account.
Increased Profit Margins
One of the reasons dropshipping on eBay is difficult is because, without true wholesale pricing, you will have little to no profit margins.
When you order your products wholesale, you can mark up your items enough to account for eBay and PayPal fees, as well as earn a profit.
How To Order From a Wholesale Supplier
The first step is to figure out what it is that you want to sell. You likely already have a good idea about this. If not, you’ll have to do a bit of market research.
You can always start with what you would have fun selling. Then you can do a search on eBay for the best selling items. You can explore eBay’s best selling items here.
This will help you to generate some ideas of your own. Think about how you can bundle some products together to offer an irresistible deal.
Locating Wholesale Suppliers
Finding reputable wholesale suppliers can be a challenging task. You can do a web search on your own but it is tedious and time-consuming.
You will need to sort out the various suppliers and figure out their costs and terms. You will not know right away if they are providing quality items or if they are a trustworthy resource.
There are many scammers that disguise themselves as wholesalers when they are not. You won’t get the best pricing or products when dealing with unethical suppliers.
Your best bet is to use a legitimate wholesale supplier directory like SaleHoo. A directory like this has done all of the hard work for you.
They have already vetted over 8,000 wholesale suppliers ensuring that you are dealing with trustworthy wholesalers that offer both quality products and wholesale pricing.
Get a Tax ID
Most wholesale suppliers will not do business with you unless you have a tax ID also known as a resale (or reseller) license. Getting a resale license is extremely easy.
Do a search for “your state + resale license” or “reseller certificate” or “seller’s permit”. Most states charge a fee for a resale license but it is usually inexpensive.
Be Prepared for Minimum Order Requirements
Buying wholesale products means that you are buying items in bulk. Some suppliers require a minimum order for their items. You can often find low minimum orders. However, the more that you order, the lower the price per item. It is probably a good idea to start out small before investing too much money into any one product.
Ask If You Can Order a Sample
Once you find a wholesaler that you want to work with, ask if you can order a sample of the product that you want to sell. This will give you an idea of the quality of the products they sell and you’ll know exactly what your customers will be receiving. If you like the product, you’ll feel more confident in ordering them in bulk.
My Final Thoughts On Wholesale VS Dropshipping On eBay
I think there is much more opportunity to earn income on eBay by buying and selling wholesale items.
You can be more creative with the items that you sell. You have more control over your inventory. Most importantly, you can price competitively and increase your profit margins.
It requires a bit more market research up front but it is well worth it if you want to run an efficient eBay business that actually makes money.
Once you know what you want to sell, save yourself the time and hassle of locating wholesale suppliers by using a legitimate wholesale directory.
What are your thoughts about selling wholesale items on eBay? Leave them in the comments below.