Selling Drop-Ship Items to Your eBay Customers
Some crafty eBay sellers make lots of money selling lists of drop-shipping sources to eBay sellers. Dealing with a drop-shipper means that you don't ever have to take possession of (or pay for) the merchandise. You pay a monthly fee for accessing the vendor's website to select items. You're given a photo of the item and, after you sell the item itself, you give the vendor the address of the buyer. The vendor charges your credit card for the item plus shipping, and ships the item to your customer for you.
Some middlemen, wholesalers, and liquidators specialize in selling to online auctioneers through drop-ship services or warehouses.
This way of doing business costs you more and lowers your profits. If you're in business, your goal is to make as much money as you can. Because the drop-shippers are in business, too, they'll mark up the merchandise they sell to you (and the shipping cost) so they can make their profit. Drop-shipping can work as a supplement to your basic eBay business.
Be careful when using a drop-shipper. Ask for references. Don't give them your credit card number with carte blanche to keep charging your account month by month if you're not benefiting from their services. See whether a zillion sellers are selling the same merchandise on eBay and not getting any bites. Check, too, that the price you will pay for the item leaves you room for profit. Many inexperienced sellers only mark up drop-ship goods by a fraction. They seem to be happy making $5 a sale; they don't take into consideration how much the listing fees for unsold items cost them. That's just not smart business on their part; hence they can ruin the market for such items for everyone else.
Also, what happens if the drop-shipper runs out of an item that you've just sold? You can't just say "oops" to your buyer without getting some nasty feedback. It's your online reputation at stake. If you find a solid source and believe in the product, order a quantity and have it shipped to your door. Don't pay for someone else's mark-up for the privilege of shipping to your customers.