eBay Dropshipping

It's no secret that you can make money by selling on eBay. But the jackpot question is "Where do you find things to sell after you have cleaned out your garage, closets, and attic?"

One possibility is called Dropshipping.

Dropshipping is an agreement between you and the manufacturer / wholesaler / retailer of an item that you are interested in selling. This company lets you list its products for sale or auction on eBay (or wherever you choose to sell them) and will ship the product to the winning eBay auction bidder.

The difference between the final auction amount for the product (minus your eBay fees and Paypal fees) is your profit.

A potential drawback to dropshipping is that regardless of what the final auction bid is for the product that you list on eBay, you still have to pay the manufacturer or wholesaler the agreed upon price for the product.

In order to make money from dropshipping then, you have to make sure that you sell the item for more money than you have to pay the product manufacturer or wholesale distributor for it.

Dropshipping Procedure

1. You contact a company that will dropship its product(s) for you
2. You agree upon a set price that you will have to pay the company for the item that you are listing on eBay
3. You create an eBay auction listing for the item that will be dropshipped
4. You answer any questions from bidders or potential bidders
5. You follow eBay procedures in case the item does not sell or the winning bidder declines to pay for the item
6. After the eBay auction closes for that item (and the winning bidder pays you for it), you give the winning bidder's shipping address to the dropshipping company along with the agreed upon payment for the item
7. The company ships the item to your winning auction bidder

How can you ensure that you get more for your auction than you have to pay the company for the product that you are selling?

Reputable Dropshipping Sources

A big question here (the biggest!) is where do you find a company who will dropship their merchandise for you?

The good news is that it is very easy to find a dropshipper.

The bad news is that it is very easy to find a dropshipper.

Find a reputable dropshipper (i.e. one who will charge you a wholesale or lower price for the merchandise that you wish to sell) is going to take considerably more effort on your part.

Certainly you can do a Google search on "Dropshippers" and find all kinds of companies who will either sell you a dropshipping directory or will dropship merchandise for you.

It sounds pretty easy but unfortunately chances are any dropshipping directory that you can find through a web search will be a list of retailers or "deep discount" retailers (people who locate reputable dropshippers tend to keep that information to themselves).

Companies that specialize in dropshipping merchandise (and advertise as being such) will more than likely be discount retailers in dropshipper's clothing.

Either way you will lose money. You cannot pay full retail (or even close to full retail) for a product that you will sell on eBay and expect to make any money.

Yes, you may make a few bucks on an auction or two but more often than not you will lose money if you have to pay the dropshipper more than the wholesale price for whatever you want to sell.

If a company offers you a wholesale price for a particular product, search Amazon for that product. If Amazon is selling that product for the same price or less, then chances are you haven't got a true wholesale price.

How do you know so much about these wholesale and dropshipping scams? You didn't actually fall for any of them did you?

Ummmm....
Hey, look at this running cat! Isn't he cute?

Two Reputable Dropshipping Sources

To find a reputable dropshipper, contact wholesale distributors and manufacturers for the products that you wish to sell and then very politely inquire if they would be willing to dropship on your behalf.

Two reputable sources from wholesalers and manufacturers are:

• your local yellow pages
• ThomasNet

Please do not search under "dropshipping" for either source.

Once again, in order to find a reputable dropshipper you will have to think / brainstorm about what you are interested in selling (preferably merchandise or products that you know something about) and then contact wholesalers and / or manufacturers for that product(s) and ask them if they will dropship that product for you (the worst thing they can say is "No").

If you don't truly love what you are selling, chances are you will get tired of it very quickly.

Dropshipping Tips

1) Get a sales certificate for your state. Most reputable (there's that word again!) companies will not sell you merchandise at true wholesale prices or dropship merchandise unless you have a sales tax certificate number for your fair state.

That's something that you can do a Google search for (just make sure that you are dealing with your state government sales tax agency and not some company who will sell you a sales tax certificate that you could get for nothing from your state government).

Just because a company requires a sales tax number does not necessarily mean it is a true wholesaler (cyber scam artist nogoodniks are getting sneakier all the time).

The bottom line is this: If a company specializes in offering a wide variety of merchandise at wholesale prices, this company is at best a deep discount retailer.

If you contact a company by email, be courteous, professional, and put your sales tax number in your email signature.

2) Dropship merchandise that you are are knowledgeable about. People prefer to buy things from people (even eBay sellers) who truly know and love what they are selling. People will also be impressed (and bid accordingly) if you can intelligently answer questions about the products that you are dropshipping.

3) Dropship products that you can add value to. Can you create an easy to read user manual for the product that you are dropshipping? Paint it a hot new color? Put a nice label on it?

Adding value to a product can give people incentive to bid more (and increase your profit margin).