7 Tips for eBay Business Success using Dropshipping
1. Minimize Your Workload
High volume is the key to gaining a competitive advantage and making money with eBay dropshipping, as profit margins tend to be very small, often only a few dollars per sale. Online sellers try to sell as much as they can in a short amount of time. High volume means more work, as you must process and fulfill every listing individually.
To streamline this process and reduce your workload, find products that can be posted as multiple-item listings. This way, you’ll only have to make the listing once, leaving you free to take care of fulfillment and handle returns when necessary. Be sure to set a longer duration for these eBay listings to avoid the need to re-list.
2. Keep Control of Pricing
The reason millions of online buyers flock to eBay on a daily basis is the promise of getting the best price for the items they buy. This can be a challenge for dropshippers, because while the final sale price may fluctuate, the supplier charges a fixed cost no matter what.
Additionally, eBay listings require a listing fee plus a percentage of the final sale price (as much as 10 percent), which can cut into your meager profit margins.
Thankfully, there are several ways to maintain your profits. When dropshipping for eBay, you have the option to set a Buy It Now listing, which offers your item at a fixed price, meaning you can ensure you pull in your desired profit.
Another advantage to using the Buy It Now option is the insertion fees are fixed, often for a lower price, no matter if you create an individual- or multiple-item eBay listing.
If you still want to allow your eBay buyers to bid for your products, carrying the potential for a higher profit, you can try setting a reserve price. This is a minimum price that the seller is willing to accept for an auction item.
With reserve pricing, insertion and final value fees will vary, so be sure to adjust your reserve price accordingly. This feature ensures better profits, but can be frustrating to online buyers, as the reserve price will not be visible to the customer.
The best way to control your profit margins is to set a high starting bid that ensures you will cover your fixed costs. Be sure to factor in costs from your supplier (including shipping, taxes, etc.) as well as eBay’s listing and final value fees.
You can calculate potential fees for your eBay listing by checking its fee calculator.
3. Ensure Availability
Thousands are making money through dropshipping on eBay because it eliminates the need to keep an inventory, but this can lead to some setbacks. One of the biggest mistakes dropshippers can make is not ensuring that the items they list on eBay are still available.
This mistake becomes frustrating for online buyers, driving away potential repeat customers and creating financial hardships for you.
Avoid the pitfalls of selling discontinued or out-of-stock items by checking your suppliers’ inventories frequently to see what’s in stock and what will be leaving their stores soon because of low quantities.
Collecting daily reports from your suppliers will help you maintain a reputation of quick and reliable fulfillment with your customers.
Remember, your business needs its reputation to stand out from the competition, and dissatisfied customers can quickly put your shop at risk of being permanently shut down by eBay.
4. Ensure Fulfillment
You’ve made sure your listed items are available; now it’s time to keep your customers happy by fulfilling all orders quickly and efficiently. Reputation is everything on eBay, where millions of online sellers are competing for sales every day, so be sure to stay on track with fulfillment.
The biggest challenge with fulfillment is that ultimately, it’s out of your hands. You can send your customers’ orders to your supplier, but it’s up to them to follow through.
If your supplier is unreliable, it’s time to move on and find another product source.
A reliable supplier will not only stay on top of shipping the items quickly, they will also keep you up to date on the status of your orders, letting you know of potential delays or issues so you can relay the information to your customers.
Issues will inevitably arise now and then, but keeping in contact with both your suppliers and your customers will keep any potential negative feedback to a minimum.
5. Watch Out for Unreliable Suppliers
There are countless suppliers to be found online, but many dropshippers fail to properly screen or evaluate the ones they choose before attempting to make sales on eBay. This mistake can quickly backfire in the form of late deliveries and poor-quality drop shipped items.
Remember, the customer isn’t going to your supplier for what they want—they’re looking to you to provide them with the items they paid for in a timely manner and in the quality they expect.
Even if the supplier is at fault with an order, the customer only sees you and will react accordingly with negative reviews or complaints to eBay. Services such as online directories can save you time by offering lists of suppliers that are pre-screened for quality and reliability.
6. Build Good Relationships
Gaining repeat customers is a great way to ensure high profit margins for dropshipping. The key to getting your online buyers to return to you for future purchases is to build and maintain great relationships with your customers.
Building a strong reputation begins with steps already mentioned: ensuring the availability of the items you list, working only with reliable, honest suppliers, and staying on top of fulfillment.
If issues come up, respond to your customers promptly and professionally. Avoid harsh or emotional responses, even if an angry customer is lashing out.
Bad feelings will fade, but those scathing reviews will stick around. Strive to give each of your customers the most positive experience possible and you’ll quickly build a loyal base of repeat customers.
7. Time Your Listings
As with all else in life, timing is everything. When setting up an auction, the day of the week and time of day can have a significant impact on your sales.
Timing your eBay listing around peak traffic hours seems to be the most obvious solution. High traffic means more potential viewers, which can lead to making a sale more quickly and with a better profit margin.
However, listing during peak times also means more competition, as well as the chance that your potential buyers might not have a chance to bid on your listing at all because of slow site speeds.
This is particularly detrimental when an auction is about to close. It’s hard to make money when your customers can’t even get to your listing in time!
Balance is the key to timing your eBay auctions. Consider the optimal times to list your products and for the auctions to end.
One key factor to consider is your target demographic: Who would be most interested in your product? When do these customers typically do their online shopping?
For example, Saturdays and Sundays between 4 p.m. and 7 p.m. PST typically see the highest periods of traffic on eBay, but more tech-savvy customers may choose to avoid those times to ensure a more successful auction bid.
Think about who might purchase your product and what their schedules are like.
Pay attention to the history of each eBay listing to determine the best timing for future products. Look at when your items experience a peak in traffic and identify the patterns.
For a detailed how-to, read on for our dropshipping guide so you can start selling online!