Dealing with Drop-Shippers in Your eBay Business

By Marsha Collier

A drop-shipper is a business that stocks merchandise and sells it to you (the reseller) — but ships the merchandise directly to your customer.

By using a drop-shipper, you transfer the risks of buying merchandise, shipping it, and storing it to another party. You become a stockless retailer with no inventory hanging around — often an economical, cost-effective way to do business.

The following steps outline the standard way to work with most drop-shippers via eBay:

1. Sign up on the drop-shipper's Web site to sell their merchandise on eBay or in your Web store.

Be sure you've checked out their terms before you sign up — to be sure there's no minimum purchase upon signing up.

2. Select the items from their inventory that you wish to sell.

For this example, say the item you select costs $6.99. The supplier gives you descriptive copy and photographs to help make your sales job easier.

3. Post the item online and wait (fidgeting with anticipation) for someone to buy it.

By the way, you'll be selling this item for $19.99 plus shipping.

4. As soon as your buyer pays for the item, e-mail the drop-shipper (or fill out a special secure form on their Web site) and pay for the item with your credit card or PayPal.

5. Relax while the drop-shipper ships the item to your customer for you.

6. If all goes well, the item arrives quickly and safely.

You make a profit and get some positive feedback.

The drop-shipper's Web site provides you with descriptions and images. Fine. But you and everybody else who sells that item on eBay will have the same photos and descriptive copy. Do yourself a favor and get a sample of your item, take your own pictures, and write your own description. Then at least you have a chance at beating the competitive "sameness" on eBay.

Drop-shipping works especially well for Web-based retail operations. Web stores can link directly to the drop-shipper to transmit shipping and payment information. When you're selling on eBay, it's another thing. There's more competition and you can't list hundreds of items at no additional cost.

Listing items on eBay costs money and may build up your expenses before you make a profit. You can't just select an item from a drop-shipper and throw hundreds of auctions on eBay without loosing money. That is, unless your item is selling like gangbusters at an enormous profit. If that were the case, you could count on meeting up with another eBay seller buying direct from the manufacturer and undercutting your price.

It's one thing to sign up for a free newsletter — or even to register with a particular site — but it's something else to have to pay to see what the drop-shipper intends to offer you. You should not pay anything in advance to sign up for a drop-shipping service.

Finding a good drop-shipper

Thousands of Web companies are aching to help you set up your online business. While some of them are good solid companies with legitimate backgrounds, others are out there just trying to get your money. These guys hope you don't know what you're doing; they're betting you'll be desperate enough to send them some cash to help you get your share of the (har-har) "millions to be made online."

Consider the following when you're choosing drop-shippers to work with:

Skepticism is healthy. When you come across Web sites that proclaim that they can drop-ship thousands of different products for you, think twice. Thousands? How many stores carry "thousands" of items — if they do, they have vast square footage for storage and hundreds of thousands of dollars to invest in merchandise. Most drop-shipping services don't. A much smaller offering of merchandise may indicate that indeed the drop-shipper has the merchandise ready to ship and isn't relying on ordering it from someone for you.

Look out for long lines of distribution. Drop-shippers are often middlemen who broker merchandise from several different sources — for example, from other middlemen who buy from brokers (who in turn buy from manufacturers). The line of distribution can get even longer — which means that a whole slew of people are making a profit from your item before you even buy it "wholesale." If even one other reseller gets the product directly from the distributor or (heaven forbid) the manufacturer, that competitor can easily beat your target selling price and make (what should have been) your profit. Verify with the drop-shipper that they stock the merchandise they sell.

Many wholesalers will perform drop-shipping for you.

When you find a drop-shipper who is also a wholesaler (or vise versa), look for one who has a good professional track record. Look for experienced buyers who get in a lot of good merchandise, and can handle pro-level business concerns such as resale permits and sales-tax numbers.

Coping with the inevitable "out-of-stock"

What happens when you sell an item and you go to the distributor's site and find it's sold out? Before your heart completely stops, call the drop-shipper. Perhaps they still have one or two of your items around their warehouse and took the item off the Web site because they're running too low on it to guarantee delivery.

If that isn't the case, you're going to have to contact your buyer and 'fess up that the item is currently out of stock at your supplier. Call your customers in this situation; they may not be as angry as they might if you just e-mailed them. Offer to refund their money immediately. Somebody else's foul-up may net you bad feedback, but that risk goes along with using drop-shipping as a business practice.

Comments (24)

Posted by rlp JANUARY 12, 2009 | 04:17PM
someone please help me. please help a dummie learn how to post items from drop shipper to ebay to sell. please. i'm without a job for now, this maybe my only income for awhile. thanks,rlp

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Posted by Candy JANUARY 26, 2009 | 05:45PM
For help in finding really good dropshippers, go to www.wholesalematch.com. They can answer specific requests for you and email you dropshippers for whatever you want to sell. I've been with them forever, they're great. They have a free trial too, so you don't have to pay anything up front. Think about it!

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Posted by Bob D JANUARY 29, 2009 | 06:13PM
Actually the only good source for real programs is http://inventorysource.com/ their service has been great. You can browse the wholesale suppliers they work with...some are the largest in the industry. they all drop ship to your customers. plus they solve the "out of stock" problem above. they have data services to load the products and images to your own site or marketplace and they can update your product data (price, quantity, status, etc) so you have the most recent information from your supplier(s) on your website or market place. they plug into your own drop ship biz as your own IT Department.

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Posted by Big Joe APRIL 10, 2009 | 04:23PM
The best drop shipper hands down is Denaq. If you know the niche (computer batteries) they are the manufacturer AND distributor. I use them on Ebay, along with a few other sellers. We can all sell for low prices, and still make a healthy margin.

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Posted by Maddy APRIL 14, 2009 | 00:21PM
just learning about this business. Is there a fee required for use of reputable drop shipping company? for instance : DOBA? what does it cost to startup online business -for example on EBAY including a website any info would be appreciated. Sincerely, Green as they come..but not guilable

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Posted by John APRIL 14, 2009 | 02:38PM
I am about to enter a field that I have never entered before to make a few dollars and would like to know if it is hard to set up a dropshiper to take the orders I get. An who would be the best dropshiper out there on the lowest prices?

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Posted by S.K. APRIL 19, 2009 | 00:17AM
Maddy, Doba is no good compared to Salehoo. Fee to join Salehoo only once in a lifetime. And you will get a lot of info from Salehoo.com. John, AN is a ok. But they are based in Hong Kong and they won't provide tracking number and also they took actually one month for item to arrive in the U.S or any other part in the west. But you can give it a try though. Good Luck !

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Posted by tom MAY 03, 2009 | 05:14AM
Folks don't fall for all these tricks these posters are spitting. There is a couple golden rules about dropshipping. Number one, the people that do have a good reputable drop ship supplier will probably not tell you their source to add more competition to the pool. I will not that is for sure. Number two, a real wholesale dropshipper will not charge you a fee to work with them. Doba, megagoods all the same. They are the middlemen this article is talking about. You will see the prices of the products are more expensive than the going price on ebay. You just have to do your homework and research. Selling on ebay is not as easy as it looks or sounds. A lot of trial and error is involved and you will be losing money before you make money most likely. Good luck

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Posted by LEE JUNE 26, 2009 | 05:00PM
Well, all this does is put a big damper on something that is already confusing and hard enough. I'm going to investigate everyone's sugestion, but I tend to agree with Tom. There's no real help out there.

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Posted by Link Nike JULY 11, 2009 | 02:40PM
pls goto www.linknike.com if you need dropshipping shoes and other products.

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Posted by joy AUGUST 26, 2009 | 09:36AM
i did sell on ebay but the fees were to high and to many all my profit went back to ebay they were killing me.

(Report comment)
Posted by Danny SEPTEMBER 09, 2009 | 09:39PM
Well, apparently people are actually making money at this, and I'm next

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Posted by Jane SEPTEMBER 10, 2009 | 02:44PM
If you are looking for a reliable source of dropshippers, you can access the web's largest directory of verified dropshippers at http://www.esources.co.uk/international-suppliers/1082/

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Posted by Rashid Mehmood OCTOBER 09, 2009 | 02:39AM
Dear Sir We feel immense pleasure to introduce our self as a Manufacturer and Exporter of Prime quality Motorbike, Motocross Gloves and apparel. Our new designs paper catalogue for 2010 is in printing process. Kindly visit our URL www.mwtpk.com and let us know about your choice. We also welcome your own designs, photos, sketches and samples to make counter samples for your kind approval. The quality of our manufactured gloves is the best while prices are much competitive. Prices will be emailed Or Faxed to you upon request. Your early reply and comments will be highly appreciated. If you have any question, comments, please feel free to write us. I am anxiously waiting your email reply. Rashid Mehmood Mark Whole Traders Link Capital Road, Din Pura Sialkot 51310 Pakistan Tel: +92 52 3241914 Fax: +92 52 3241915 glove@mwtpk.com www.mwtpk.com

(Report comment)
Posted by Rashid Mehmood OCTOBER 09, 2009 | 02:41AM
Dear Sir We feel immense pleasure to introduce our self as a Manufacturer and Exporter of Prime quality Motorbike, Motocross Gloves and apparel. Our new designs paper catalogue for 2010 is in printing process. Kindly visit our URL www.mwtpk.com and let us know about your choice. We also welcome your own designs, photos, sketches and samples to make counter samples for your kind approval. The quality of our manufactured gloves is the best while prices are much competitive. Prices will be emailed Or Faxed to you upon request. Your early reply and comments will be highly appreciated. If you have any question, comments, please feel free to write us. I am anxiously waiting your email reply. Rashid Mehmood Mark Whole Traders Link Capital Road, Din Pura Sialkot 51310 Pakistan Tel: +92 52 3241914 Fax: +92 52 3241915 glove@mwtpk.com www.mwtpk.com

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Posted by Shipping Online JANUARY 17, 2010 | 08:21PM
I used to dropship items sold on ebay, but the "Out Of Stock" killed my feedback score. I cant stress highly enough to have an out of stock clause on your ebay listing. Also I recommend that you talk to your drop shipper about there shipping rates. I have found that you can negotiate your shipping rates down quiet a lot sometimes.

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Posted by Shane FEBRUARY 04, 2010 | 01:49PM
Drop shipping is a great business model, however you really need to know what you are doing. You need to know how to compete against others with a much higher feedback score and also you must be willing to test. Once you findyour right set of products to drop ship you are fairly sorted! Check out my site if this is a business you are truly interested in and are willing to invest in your future. http://www.dropshippingplanet.com

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Posted by Avelina FEBRUARY 08, 2010 | 05:07AM
I have been using dropshipping services from wholesalepages.co.uk. I found their customer services much reliable and good.

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Posted by Terressa MARCH 11, 2010 | 05:01AM
Help... I have created a website it is currently blank... how do I get a shopping cart and how do I upload dropshippers clothes etc....

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Posted by Tiana APRIL 27, 2010 | 01:26AM
The post is nice, and full of information. The post, though, skips to give another important information: you take your pretty pictures, you write your cute description, you post the products on eBay, you sell them ... yuppyy!, you pay the supplier, and happily relist the item(s), and then BANG! eBay is limiting your access to it, as well as PayPal, because they ask material evidence that you actually BOUGHT those items, and they were shipped on YOUR name and address that have to show CLEARLY in the attached files to eBay and PayPal. So ... happy drop-shipping!

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Posted by Wang MAY 04, 2010 | 04:29AM
I am from Malaysia and intend to use drop shipper to supply my products in eBay. My email is registered under Yahoo.co.uk. May I know if I can use the drop shippers from US or any other places. I ask this because when I tried to registered with a drop shipper directory and it replied that "Sorry the service is not available for your region" May anyone help me ? Thank you.

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Posted by ifuncity JUNE 14, 2010 | 03:33PM
it is true from many clients i have right now. many told me the bad experience they had before regarding poor communication and terrible customer services from drop ship service. we are doing it the right way here at ifuncity. No doubt that our clients will tell you we are doing an awesome job.

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Posted by Julian Deverell JUNE 29, 2010 | 00:13AM
Another informative article from your resident writers. It always helpful to term an action by name, such as this "drop Shippers" is a relatively new approach to warehouse management, retailer to the end user. It is also, I believe, an issue with some e-businesses, such as eBay. It allows money to be in one currency, yet the product may be situated in another. I would like to hear how this is conducted legally?

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Posted by Vallians JULY 13, 2010 | 08:17AM
If you looking at T-shirt Drop Shipping to worldwide or to USA, we can provide that. Cheap and Fast processing from sending invoice, processing (3-7 days depend on quantity and buyer address), fast shipping using USPS with tracking number. visit vallians.com or email me at support@ vallians.com

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