how to dropship on ebay

How to Dropship on eBay: A Beginner’s Guide

Do you want to have a passive income source or a side hustle where you don’t have to invest much money?

The good thing is, there are plenty of options out there that can earn you a good amount of money as a side hustle, including dropshipping.

Imagine selling products on eBay without creating your inventory. It’s possible with the magic of eBay dropshipping.

That’s why we will share a complete guide on how to dropship on eBay.

But why eBay? It’s because it is an excellent online marketplace, which doesn’t require you to invest any upfront cost.

Additionally, eBay allows you to attract millions of its existing loyal customers.

This is a detailed guide that will tell you what you want to learn about eBay and dropshipping. It will help you get started in no time.

Important Facts About eBay

We all know that eBay is essentially an online marketplace that connects buyers to sellers from anywhere in the world.

You should know that eBay also follows a customer-to-customer (C2C) business model, empowering different customers to trade with one another.

Additionally, eBay has an additional option of auction-based selling.

The good news is that you can set up an eBay account for free, but it’s not possible to sell anything for free on eBay.

Instead, you have to pay a moderate listing fee depending on the product price and listing interval.

Another point to consider is that eBay has around 27 international operation websites, giving you global exposure.

Free Dropshippers for eBay

According to the eBay website, it allows dropshipping but it prefers that the wholesaler or the retailer directly ship the products to the customers.

There is one concern which you should consider before starting dropshipping on eBay.

eBay has a clear rule to revoke or lower the seller’s listing if you don’t deliver the shipment within the given time frame.

What Is Dropshipping?

Dropshipping is an e-commerce business methodology in which you don’t have to maintain a product inventory as a seller.

All you need to do as a retailer is to display your products’ images on eBay, while the supplier will directly send the order on your behalf.

The customer also doesn’t need to know the original sender of the product.

The Benefits

The most significant benefit of opting for dropshipping is that it involves lesser risk as the seller doesn’t need to maintain an inventory, saving both money and time.

Not only that, but the seller can sell products of different niches simultaneously.

One important thing to clarify is dropshipping is legal on eBay since there isn’t any illegality involved in the dropshipping concept.

As long as you adhere to the eBay selling policies, you can sell products from anywhere in the world on its website.

The Drawback

That said, the eBay dropshipping model is a bit complicated; that’s why this eBay dropshipping guide will help you understand the concept and create your eBay seller account.

eBay Dropshipping Guide

You can start dropshipping on eBay right away if you follow these five simple steps:

  • Step #1: Create a seller account on eBay and a business account on PayPal.
  • Step #2: Set up a new DSM Tool account and synchronize it to eBay.
  • Step #3: You must optimize the eBay account settings according to the dropshipping model.
  • Step #4: You must set up your eBay store policies to source products from AliExpress.
  • Step #5: Use the DSM tool, which is essentially a dropshipping software, to source products from different websites.

One of the most crucial points of dropshipping on eBay is to create product listings and rank them higher.

You should use all the information provided by the suppliers regarding product information.

Additionally, you should use images and other descriptions to optimize the product listing.

how to dropship on ebay tips

What Are the Best Items to Dropship on eBay?

If you want to establish a successful dropshipping business on eBay, you should master eBay market research and other product sourcing.

In dropshipping, you need to find a supplier and source the products and do aftermarket research regarding in-demand products.

In reality, what you should be doing is to focus on the snipping technique, which we’ll discuss in a short while, to yield quick output.

Conversely, you can also perform niche research; however, you have to buy a subscription to eBay’s research software, Terapeak.

A rule of thumb is to include those products in your store, which have recently been sold multiple times.

It’s because these are the most searched products, and it’s precisely what all eCommerce stores are aiming for.

Nonetheless, it’s a futile effort to include such a product with high demand if you don’t find its supplier selling it at a cheaper rate.

That’s why the goal is to find high-demand products and their wholesale supplier selling them at a lower price at another website.

This technique is essentially known as the snipping technique.

The Snipping Technique

Snipping is quite an easy and straightforward technique, involving the following steps:

  • Search competitor dropshippers generating significant sales.
  • Perform an in-depth analysis of their store to find their top-selling products.
  • Finally, try to source the best sellers at a lower price from the same website they are sourcing from.

You can use the advanced search function on eBay to search for the results with up to 200 listings per page.

The next step is to target sellers with feedback ranging from 25 to 5,000. You can easily see the seller feedback rate available on the right side of the listing.

Another point to consider here is that not all the sellers are dropshippers.

To target the dropshippers, you need to check the following things:

  • Is the seller from a European country or the US?
  • Is he or she selling products for 30 percent markup from AliExpress?

If both the conditions hold, it means the seller is a dropshipper.


The next step is to analyze the store and find out its best sellers.

You can download a Chrome extension, known as eBay popularity sort, and press the “Items for sale” on the dropshippers eBay store.

The extension automatically sorts down the items, showing best sellers on top. You can also click on the product to check the total number of sales and other sales history.


The last step is to source these best sellers at a lower price. For this purpose, install the Ali Tools Chrome extension to search for the product on AliExpress.

Not only that, but you can also sort the products by popularity and price.

Examples of Best Selling Products

  • Vintage Items
  • Clothes
  • Shoes
  • Books
  • Mobile Accessories
  • Collectible Toys
  • Home Decor
  • Video Game Accessories
  • Trading Cards
  • Collectible Folding Knives
  • Vitamins and Dietary supplements
  • Body Wellness Products
  • Breast Pumps
  • Vaporizers
  • Baby Carriers
  • Sports Bags

How Much Does It Cost to Dropship on eBay?

If you Google the above question, it will immediately provide you with a theoretical answer in which you don’t have to spend a single penny on starting dropshipping on eBay.

In reality, though, you need to invest a small amount in starting dropshipping on eBay from scratch.

If you are a beginner, you can list products after using the credits of “zero insertion fees,” you pass the limit after accumulating 200 credits a month and start paying a nominal fee per product insertion.

Lucky for you, you can receive more zero insertion fee listings if you are a beginner who wants to start dropshipping on eBay by subscribing to an eBay store.

You can exempt yourself from the insertion fee due to your eBay selling limits in the following cases:

  • Standard fee with no store package translates to zero insertion fee listing for up to 200 listings.
  • Starter store package with up to 250 listings.
  • Basic store package with up to 350 fixed price and 250 auction-style products.
  • Premium store package with up to 1,000 fixed style and 500 auction-style products.
  • Anchor store package with up to 10,000 fixed prices with up to 1,000 auction-style products.
  • Enterprise store package with up to 100,000 fixed price and 2,500 auction-style products.

How Much Is the Initial Investment?

You should know that the initial investment required for starting dropshipping on eBay is risk-free.

It involves the working capital you credit so that you can finance the hold of funds for the first 90 days.

The biggest cost involved in setting up a dropshipping store on eBay is buying the products you want to sell.

For instance, you set a profit margin of 30 or 40 percent profit margin per product. You still need to pay most of the money to the product supplier to cover the order processing and shipment cost.

Another thing to consider is that sellers get paid with PayPal instead of an eBay account when you start dropshipping on eBay.

However, PayPal holds incoming funds for 21 days because PayPal keeps funds for 90 days from the day you receive your first payment.

A Breakdown on eBay Fees

To sum up, you need to cover the following fees to sell products on eBay:

  • Insertion fee
  • Final value fee
  • Upgrade fee
  • Promoted listing
  • eBay store subscription fee
  • Payment processing fee

After you cross the free listing mentioned above, you need to pay $0.35 per listing for most of the product categories.

eBay charges you a final value fee of 10 percent, only when you sell a product.

Keep in mind, though, that it’s 12 percent for movies, DVDs, music, and books.

Apart from a free listing, you can pay a listing upgrade fee if you want to upgrade the listing:

  • Bold Title: $4
  • Subtitle: $1.5
  • The Second Category: Variable
  • Large Photo: $1
  • One or three day auction

You also have to pay the above fee upfront, whether your product sells or not.

If you want to opt for an auction-style listing, eBay charges an insertion fee of 10 to 35 cents, depending upon whether you own a store or not.

tips on how to dropship on ebay

Can You Make Money Dropshipping On eBay?

Yes, you can, but not in the first few weeks. Let us clear a misconception here.

Some people think more sales and lesser expenses are the basic foundation for building a profitable business.

It’s time to change our mindset from establishing a profitable business towards building a healthy business.

Yes, you have heard it right. Healthy business! And the key to a healthy business is traffic.

Establishing an unhealthy store on eBay will not get you any traffic, or at worse, your store might get suspended.

eBay monitors your store’s health based on specific criteria, including the last 12 months’ sales, transactions, cases closed without seller resolution, late shipment rate, transaction defect rate, and more.

You must be wondering how to turn your dropshipping into a healthy business on eBay.

The secret is to find profitable products and perform in-depth SEO optimization to generate traffic and sales.

You also need to provide exceptional customer service by promptly answering the buyer’s queries, messages, cancellations, and returns.

Is Dropshipping On eBay Worth It?

According to Statista, eBay has approximately 106.9 million visitors per month.

That’s why sellers opt for dropshipping options to fulfill eBay’s product requirements due to its minimal overhead cost.

However, eBay has recently made changes in the dropshipping policy, making it difficult for the sellers to enjoy free dropshippers for eBay.

Some of the eBay dropshipping policy include points such as:

  • Removal of product listings from the search
  • Moving the listing to a lower position
  • Listing restriction on eBay platform

These policies aren’t really preferable for sellers to dropship on eBay.

In addition to that, eBay allows the sellers to list the products only if available in bulk.

Another way is to purchase bulk products from a wholesale supplier, which ultimately increases the upfront cost.

How to Dropship on eBay: The Conclusion

The recent paradigm shift in technology has digitized everything, even stores, and their marketing.

Dropshipping has successfully transformed the existing business model in which you no longer need to maintain a vast product inventory.

We hope the above step-by-step guide explained helped you understand the processes of how to dropship on eBay.

All you need to do is create an eBay seller account, select a product niche, create a product listing, and start selling.

About the Author Ramesh Dontha

I am an entrepreneur, writer, and blogger. I build businesses and love to share my experiences of my successes and failures. My mottos is: Live with purpose, Be Passionate about that purpose, Persevere through ups and downs and keep exploring Possibilities.

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