One of the most common questions we see from new members is "why are some supplier prices more expensive than what I can find on eBay itself?"
Firstly, it's important to understand that eBay itself is a wholesale marketplace, it's not a retail price market. So most of the prices you will see there reflect the wholesale value of the product or even below that on some products, not the actual retail value of the product that you might pay if you walked into a bricks and mortar store to buy it.
So understanding that point about eBay, it's important to understand why it is a wholesale marketplace.
1. eBay is no longer the smallish community marketplace it started out as, it's now a massively competitive open marketplace that has some major players in the game. You have sellers so well resourced that they can afford to buy products in massive volumes from wholesalers or even manufacturers direct, giving them massive price savings, then sell at very low margins to keep the market tight and dominate it, while making their profit through high turnover.
2. You also have a situation where some wholesalers and manufacturers see eBay as a great place to move their own products as well. These types of sellers are the ones you will find in all the hot selling genres, especially the tech genres. These are your main competition on eBay and are why eBay is a WHOLESALE marketplace.
3. As if the first two points weren't difficult enough to over come, you are also up against sellers using the platform purely for marketing. This is called "Loss Leading" It's a marketing technique where the seller is selling the product at COST or even below in some instances. This is designed to create interest, where by the seller can then market and drive traffic from eBay to an off-eBay website of their own where they have other products.
In essence, the money they lose on the Loss Leader item they sell is considered advertising money and can be an extremely cost efficient and effective form of marketing.
So you see eBay or Amazon are like ducks on a pond. All looks like it makes sense on top of the water, but it's what is happening under the water that really matters. In other words, simply looking at a price on eBay and then comparing it with a suppliers price isn't always a fair comparison, because you aren't aware of the seller's method.
I've only covered a few different methods in play here, just to give you some examples of why some of the prices are as they are. Trust me, there are plenty of other techniques in play in these online platforms as well, all of them effecting the price down, down and down!
I see so many people just expect to turn up, place an order with a dropship supplier and then sit back and watch the cash roll in. It's really important to keep expectations in check, this is a business that you are in and I'm not aware of any business where it's that simple to be successful. Business takes planning, it takes dedication to the cause and most of all, it takes persistence and some might even say a degree of luck to ultimately succeed.
Not only are you up against the well resourced suppliers mentioned above, but when you are trying to use a dropship model to go head to head with these sellers, you have very little chance. Actually, I'm being far to conservative, you actually have ZERO chance of beating them head to head.
Dropshipping has many advantages for sellers wanting to get into the market on the cheap, but Dropshipping isn't Wholesale and that is a fact you have to remember. Those buying in volume to get big volume discounts do that to get the very best price possible, dropshipping can never, ever provide you with the best price possible, because you are not buying in the volume required to secure those sorts of prices.
Now dropshipping can be successful on eBay, we have members here that prove that point everyday, but if eBay is your marketplace, then you have to find ways to position yourself in the marketplace and that often comes down to research, research and then even more research.