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How to Start a Dropshipping Business on eBay

19 min read

If you are looking for information about how to start a dropshipping business, especially how to dropship on eBayyou are in the right place. We will guide you through the most important first steps of opening a dropshipping store and answer the most popular question about this eCommerce field.

Caution! You will also get free guidelines and resources for more information. Overall, this post will help you to start a dropshipping store on eBay via the next content:

Let’s start with a fact: since Covid-19 the world is becoming more and more digital. Traditional marketing is converting digital marketing and you are reading this probably because you are too looking how to dropship on eBay.

Well, you’re not alone, this business model is growing in popularity. Something about the idea of being able to make profitable sales without the hassle of investing in inventory or the risk of paying for advertising is very appealing for people who think about starting an online business.

how popular is dropshipping on ebay
The growth trend of eBay Dropshipping in the past 5 years (source: Google Trends)

The goal of this post is to help to start an online business using the dropshipping business model and make your first sale online. This article is built as a guideline that will walk you through the first steps needed to start selling on eBay.

Is dropshipping on eBay worth it? 

Yes. Why? First of all, eBay is the second largest marketplace in the world after Amazon. By March 2021, eBay has 187 million users all around the world. It is continually developing and growing. While, originally, eBay was developed to connect buyers with online sellers of used or collectible items in auction-style listings. Nowadays, it is possible to buy almost everything on this online platform across dozens of different categories. 

Number of eBay users for 2021
Number of eBay users for 2021

Secondly, the eBay dropshipping  model  presents an easier process of launching a seller account or/ and seller store than such competitors like Shopify or Amazon. Therefore, eBay platform is more beginner-friendly. 

Thirdly, taking into consideration that eBay has already spent millions of dollars on marketing and already has millions of the buyers searching for the products on eBay, there is no need to invest money on the advertisement campaigns in the attempt to get traffic.

Besides, it doesn’t require special design skills. You can use ready listing templates and you shouldn’t create a separate webpage for your store by yourself. This is the main difference from the Shopify dropshipping model, which includes paying for advertising and building your own website on Shopify shop builder.

At last but not least, eBay doesn’t obligate you to hold the inventory like Amazon dropshipping requires you to do. 

So, if you don’t have prior experience in online sales, marketing, advertising, designing the shops, exporting and importing the goods,and have a low budget, you can start selling on eBay already today. However, you would need to understand how eBay dropshipping works. 

Keep reading to get the specific steps on how to dropship on eBay. 

How to dropship on eBay - guide

Is Covid-19 a crisis or an opportunity?

COVID-19 affected dropshipping as any other sector of the economy. However, the sector of e-Commerce (online sales) got positive changes. The pandemic triggered an incredible growth of online selling businesses…and everything that happens online. Overall, the buyers’ shift towards eCommerce was accelerated by five years!

Therefore, the decision you took to start a dropshipping business on eBay is going to be your first step into the worlds of eCommerce and digital marketing. The graph below shows how important it is for anyone today to gain knowledge in this digital world:

The growth of U.S. eCommerce invites to start dropshipping business on eBay

This graph shows the growth of e-Commerce from 2009 until 2019. Take a close look at the insane increase that the Covid-19 outbreak had on it. We’re talking about 10 years of growth in 8 weeks!

An inspirational story of success in eCommerce

Let’s have a look at the past and a story of success in eCommerce that happened during the other epidemic.

In 2003 JD was a small chain of 12 brick-and-mortar electronic stores in Beijing, China. That year the epidemic SARS broke out and put most of China’s biggest cities under a lockdown. Sounds familiar? That is quite similar to what we see all around the world with Covid-19.

JD’s brick and mortar store (source: jd.com)

Richard Liu, the founder of JD had to shut down all of the stores but one in order to cut down expenses during the lockdown. He got stuck with a lot of stock and decided to publish it for sale in online forums. eCommerce barely existed in China so taking orders and processing them was done manually by the workers that anyway were not able to work in the stores.

Richard Liu, 2004 (source: jd.com)

The inventory sold out so quickly that Richard had to order another container to answer the demand. He then realized the size of the opportunity and decided to close his stores and focus his time on building an online eCommerce website called “JDlaser.com”. Later it was renamed JD.com which is traded today for more than $100 Billion in Nasdaq.

Look at its growth between the of the IPO (Initial Public Offering) and November 2020

JD market cap in Nov 2020 $138.97B

We are facing a time of increased financial uncertainty: millions of people lost their income source and most of us are expecting a recession in the upcoming years. It’s in this time that by entering one of the only growing industries you have the opportunity to stay ahead of the curve.

“You never want to waste a good crisis”

(Winston Churchil)

Caution: Avoid fake promises online

When you start showing interest in starting a dropshipping business on eBay, the “make money online” industry starts targeting you with advertisements of “blueprints”, “secrets” and all kinds of different methods that could get you tremendous results if you just pay to get them.

Since you are a potential customer to advertisers in this industry they have an incentive to make it look like it is easier and fancier than what it really is to build a business and make money online.

This guide you are reading now was created for free for the online entrepreneurs community with the love and hard work of the DSM tool team. It is going to take you step by step through the process of how to start a dropshipping business on eBay. And through it I hope to introduce you to the basic aspects of digital marketing and eCommerce that you could later expand your business with.

However, I want to be clear about something – Just because you are attempting to start a dropshipping business, your own business, it does not guarantee that you will succeed in doing that. Starting a business takes time, it takes dedication and typically requires you to give up on things you might not enjoy giving up.

Personally, I barely have time to spend on watching the new awesome Netflix shows or binge Instagram stories, even when these are good friends of mine, not to mention driving Lamborghinis or flying private jets.

OK, fine… sometimes we do get some fun time, DSM Tool’s management visit to our Ukraine office in 2019

I have to invest a lot of this “free” time in building and operating my businesses. As an entrepreneur myself, I face the exact same challenge as you: creating value that will translate itself to money.

Will you be willing to adapt new habits in the upcoming days, weeks, and months in order to start a dropshipping business and grow it? Start selling on eBay? That’s the easiest part.

Let’s get started, shall we?

The 3 steps to start a dropshipping business on eBay

To make it easier for you, the next part of the guide of how to dropship on eBay is structured according to the 3 steps. For each step, it explains exactly what to do and provides you with links to free resources and step-by-step guides for beginners.

Here is a breakdown of the steps with time estimation for their completion

StepsExplanationDuration
Prepare to sellSetup eBay, PayPal. AliExpress and DSM Tool accountTypically 2-4 hours
Make the saleFind, optimize and add products to your storeTypically 1-7 days
Expand the businessExpand your dropshipping business into affiliate marketingTypically 1-2 hours

Step 1: Prepare to start selling on eBay

  1. In order for you to start selling on eBay, you first need to have a special selling account or store. The eBay marketplace is going to be used for that, so you are going to need to set up an eBay seller account and a PayPal account to accept payments with.
  2. Since the eBay dropshipping model allows you to sell online without holding an inventory you are also going to need a dropship supplier to process the logistics of your orders if you make a sale. So, the next step will be to create an account on your supplier’s site (for example, CJDropshipping, Aliexpress, Chinabrands, etc.). 
  3. Last, you’re going to need an account on a dropshipping software like DSM Tool to help you automate dropshipping tasks like adding products to your store in one click. Without it, you will have to copy and paste tons of information from your supplier/ source, for example from CJDropshippingAliExpress to eBay. Or adjusting the price and stock of your inventory. The software automates so many aspects of your business that running it doesn’t seem to make sense.
How to start a dropshipping business on eBay?
How to start a dropshipping business on eBay? Read and follow below.

Here are the very first steps which you need to do to start dropshipping on eBay:

How to open an account to sell on eBay?

Surely, one of the first steps is to open an account to sell on eBay. The process is straightforward and super fast. A selling account on eBay not only allows you to sell on this popular marketplace but also opens for you the special features to manage your business better, like the eBay seller hub.

In case you aren’t an eBay user yet, sign in to the right eBay marketplace ((i.g you can sell on eBay USA, Uk, Australia, etc.). Then click on the button Sell on the top right corner for creating a selling account.

 how to open a selliing account on eBay
Click on Sell to open a selliing account on eBay

Then eBay will ask you to sign in again and ask you to provide some data about your products. You can skip it since you will need to set the settings at the beginning. click on My ebay button > Account, and find the clickable phrase “Change automatic payment method”.

Setting automatic payment method to open a selling account on eBay
Click on Change automatic payment method

Set the payment method which you will use for paying seller fees and eBay Money Back Guarantee reimbursements using PayPal, Debit card, or Credit Card. And provide the necessary data. That’s all. 

Additionally, you can set the store’s name instead of using your name or nickname to sound more professional from the very beginning.  To do it, go to Account > Personal Info > User ID > Edit and set the necessary name.

PRO Tip: you can use the same eBay account for selling and buying items unlike on other selling platforms. It will help you to get extra feedback. Invest 10-20$ dollars on buying different eBay products, for example on auction. You might get positive feedbacks from sellers, as a result, your reputation will increase when you will start selling on eBay. We will get there soon.

How to set up Paypal for eBay selling? 

Once you get a sale, you will need to get paid in one way or another. On the one hand, PayPal processes most of the transactions on eBay. On another hand, eBay is switching to its own payments processing system till the end of 2021. Those sellers who didn’t enroll in the eBay managed payment system yet, need to have a Paypal account to receive payments. Moreover, PayPal is required for many eBay categories. 

To choose Paypal as a payment method on eBay, pick PayPal after creating your first eBay listing in the Payment options section of the listing form. Provide an email that is linked with your Paypal account, and it will be set. 

In case you don’t have a PayPal business account yet, create it by going to the Paypal webpage. Click on the Sign-Up button, select a Business Account. Then provide your email address and the requested data. PayPal will ask you some additional questions to verify your identity. Afterward, they will send you an email to verify your information and your PayPal business account will be ready to use. 

What are Paypal fees for eBay?

The PayPal fees vary on your location and your buyer’s one. For example, if a US-based eBay seller will sell an item to a US-based buyer, the company will charge him 2.9% PayPal fee for this sale and additionally 30 cents (a standard eBay fee for each transaction). In case of international transactions, PayPal charges 4.4%+ 30 cents for the most countries. 

 You can calculate the exact fee for different locations on PayPal site

Knowing them would be useful to set the correct dropshipping profits.

Well, when this part is done. You would need to set a few more important things. Follow the links in the section below to finish all the basic settings: 

The checklist of free guidelines to complete the 1st step.

Note: You can also get an A to Z eBay dropshipping course that teaches you in easy English how to open your first dropshipping store on eBay without holding any stock. This training program covers 45 lessons and walk you through the all steps of dropshipping on eBay, and scaling your business.  

checklist about how to start a dropshipping business on eBay
Follow the checklist above to start a dropshipping business on eBay

Step 2: Make the sale and start earn online

As soon as you finish setting everything up you are ready to start making sales! But something is still missing… What to sell on eBay? You need to find products that are trending on eBay and source them from a reliable supplier on Aliexpress or another dropshipping supplier. You can do that using the sniping method, which is one of the dropshipping product research techniques.

Except for picking the right product for dropshipping, you would need to learn how to find reliable suppliers. There are many dropshipping suppliers to work with. However, they all have different shipping methods, payments, special programs, etc. which you can use in your eCommerce business. Whoever you would pick will order a product for your buyers. And you will need to explain the shipping, paying, returning conditions correspondingly in your eBay store to avoid product cancellations, open cases on eBay, and bad feedbacks. 

After you snipe yourself the right dropshipping products, you need to list them on eBay for sale. In order to increase the chance to make a sale, drop shippers optimize listings for Search Engine Optimization (SEO). Using eBay SEO techniques will help you rank your listings higher in the search results.  As a consequence, your chances of getting sales become higher. 

We guide you through the most important points of these steps in the following guides: 

Free Resources

Make a first dropshipping sale to start earn online
Make a first dropshipping sale and start earning online

Step 3: Expand your online business

In order to complete this step, you are going to have to learn another new skill in digital marketing: affiliate marketing. Just like dropshipping on eBay, it is another form of making money online and it is a growing industry as well.

Google trends results for affiliate marketing
The growth trend of Affiliate Marketing (source: Google Trends)

This step was designed to help you learn the fundamentals of affiliate marketing in a practical way that will allow you to extend your online business and generate more income.

Probably this step is the easiest. All that is necessary to do is to share your affiliate link and get other people to sign up to DSM Tool under it. They will grow in eBay dropshipping, and your passive income will grow. This is a win-win.

Free resources

Conclusion

Now you have an answer on how to start a dropshipping business on eBay and have the necessary guidelines to follow for making first steps in eCommerce. This year with its growing eCommerce field is a right time to step in this business and start making money online. 

I hope that the shared information with free resources was useful and answered most of the questions. Always there is room for new knowledge! Keep exploring our blog and youtube channel to learn more about dropshipping. 

Happy beginning!

Written by Kfir Shapira

Kfir is a Co-Founder and the CEO of DSM Tool. He is working with eBay since 2008 and 8 years later in 2016 joined the founding team of a revolutionary drop shipping management platform - DSM Tool. He has a B.A in Business and Entrepreneurship from IDC Herzeliya. Kfir also plays the drums and owns a dog named "Bamba".

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