eBay is a great platform for dropshipping in particular because it makes no distinctions between dropshippers and regular retailers. Dropshippers never lose out on privileges accorded to retailers; as long as an item is listed, it doesn't matter to eBay if the seller has the item on hand or not.
However, there are unique challenges that dropshippers face on auction sites like eBay, especially if you are just starting your own dropshipping business. Today we're talking about some of those issues, and how you can overcome them.
Dropshippers generally like to sell as much as they can because that's the best way to make money. For each item they sell, they typically retain only a small profit margin, so the big bucks come in through volume. But that also means you have your work cut out for you, because you have to process each and every listing yourself before you can place the order with your supplier.
The solution to this is post an item as a multiple listing so that you only have to make a really compelling listing once, and then just process each individual sale as it comes in. Make sure that you select a longer duration for these items to avoid having to re-list it before all the items are sold.
The biggest attraction of eBay for most buyers is the chance to get goods for as low a price as possible. When the winning bid is low, this can be an issue for a dropshipper because they have a fixed cost for each item that they pay the supplier. Additionally, eBay typically charges a fee to put in a listing (which varies depending on the format of the listing and the starting bid), plus a final value fee for all items sold, which adds to a dropshipper's cost per item.
On eBay you do have the option of a Buy It Now (fixed price) listing. The added advantage of a fixed price listing is that the insertion fees are low and fixed, no matter how many of the the item are listed. Your final value fee is also predictable because you know from the beginning what the final value will be.
Another way to control the price is by putting in a Reserve price, which is the minimum the seller will accept for an item on auction, but the insertion and final value fees will be variable. It can also be frustrating for buyers to bid on items with a reserve price because of said uncertainty, as the reserve price isn't visible to the customer.
It would be better to simply have a high starting bid that will cover your fixed costs, but be ready to pay a hefty insertion fee. Note, though, that there are certain categories (i.e., clothing) where eBay imposes a significant final value penalty for fixed-price listings.
You can check what your fees will be by using eBay's fee calculator before posting a listing.
Dropshipping is one of the best internet business ideas for online sellers. The best thing about dropshipping is that you don't need to keep an inventory, but it is also one of the worst things. You avoid the financial and administrative burden of keeping stock but in return you don't know what is in stock.
You could be selling stuff that isn't available, and that can land you in a heap of trouble. The only way to circumvent this is to get daily reports from your suppliers about what they have in stock and in what quantity, as well as projections, if they are available.
This will let you plan what you should continue to sell. eBay has a short fuse for sellers who fail to deliver the goods, and dissatisfied buyers can start the process of closing you down permanently as an eBay seller by reporting their purchased items undelivered after 10 days.
Selling the item is just one half of the equation. Fulfillment is where you can make or break it on eBay. Be lousy at it, and your feedback can drop faster than a sack of potatoes down a laundry chute. Have you ever tried to recover a 100 percent rating on eBay after receiving negative feedback? It probably can't be done. So go to great lengths to keep your buyers satisfied.
Fulfillment is a major issue with dropshippers because, obviously, there's a shift in control. You don't really have anything to do with fulfillment at all, so if your supplier is unreliable, you'd better look for another supplier.
Even if your supplier is reliable, however, you still need to keep at them to give you constant updates on your orders. The thing with buyers is that if there's going to be a delay in the delivery, they appreciate it when you are proactive about it by letting them know, apologizing, and giving them a new ETA.
This way, you are less likely to get negative feedback because the buyer knows you are keeping them informed before they ask or complain about a delayed fulfillment.
While this may seem like a no-brainer, many dropshippers neglect to do a proper evaluation of the suppliers they use and the products they're selling. This is a major no-no because you're fronting for these suppliers and products and any deficiencies they may have will reflect directly on you.
You can't shift any blame or responsibility for bad quality or non-fulfillment to your suppliers. Before listing an item on eBay, test the reliability of your supplier. Find out the speed of delivery and the quality of the packaging, and inspect the product thoroughly.
That way, you know what to put in your listings so you can give an accurate product description and spot-on shipping/fulfillment terms. The worst thing that can happen to you as an eBay seller is to be accused of misrepresentation.
To give you an edge when looking for reliable wholesalers for dropshipping, check out the Salehoo directory, which contains listings for more than 8,000 security-screened wholesalers. You will save a lot of time and effort vetting your suppliers.
As mentioned earlier, you can get away with most mistakes so long as you initiate contact with the buyer when trouble is brewing. They'll be more tolerant if you give them advance notice about any problems with the product or shipping and coordinating with them about available options. They are then more likely to provide positive feedback because they feel that you have been upfront with them and you can be relied on.
When the buyer gets in touch with you about an issue they have with the transaction, be sure to respond promptly and constructively. Even if the buyer is being unreasonable, always maintain a professional and cheerful attitude to disarm contentiousness. Strive always to give your customers the most positive experience possible so that they are more likely to become loyal to you.
The time of day that you post your listings has a significant impact on your sales. Timing the listing of your items so that it will coincide with peak periods makes your listing more accessible. On the other hand, targeting high-traffic periods can also mean your buyers won't be able to bid at all because they can't get through. This is especially crucial when your auction item is about to close, as this will result in a lower winning bid than it may have been otherwise if last-minute bidders had been able to get in.
You need to strike a balance, always keeping in mind the profile of your target market. Tools, for example, normally attract male buyers who go online on Saturday afternoons. The best way to determine the best time to put up your items for sale will be to check the selling history for each item and identify the pattern. Seasonal items are the exception, because people will buy at any time and often with grim determination when it's in season.
Don't believe the hype that dropshipping is easy, that it's a business that will run itself. Use the tips we've given you to make your dropshipping business a success on eBay. However, you'll have to work at it, just like any other income-generating undertaking. The best online business is one that's carefully planned and executed, and dropshipping is no exception.
Want to learn more about dropshipping on eBay? Check out the Free Lessons in the SaleHoo education center.
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