Information and Recommended Software
If you’re looking to start a business within E-Commerce, you should read a little into Drop Shipping – A method that will allow you to start this week if you want to. There’s very little set up, especially when drop shipping on eBay.
This page will go into detail on some of the ways you can get involved with drop shipping – and most importantly, the tools that will allow you to take it from a small business to a much bigger, more profitable income.
What is Drop Shipping?
Drop Shipping is a method of e-commerce that does not require you to have any space at all. In fact, you’ll even save a lot on start-up fees as you’re not buying anything in bulk either. Often seen as a doorway into e-commerce in general, Drop Shipping allows you to sell items that you don’t hold, and when you make the sales, you pass the money and the customers address onto your supplier. They fulfill the order, and you make a profit. The profit margins are usually smaller as you qualify for less supplier discounts but the effort involved is a lot less.
The most popular method of Drop Shipping is done through setting up your own website in a specific niche and selling related products that you source from your suppliers. This allows you to separate yourself from any one selling the same products as you, but you need to drive the traffic and maintain the site – which is much harder than listing on an eBay or Amazon account, and making sales to their customers.
Some wholesalers who provide bulk orders offer a drop shipping service alongside, some don’t. However, a popular way of drop shipping in recent years has seen sellers listing products on eBay from stores such as Amazon, Costco and other normal retailers that offer a gift option. This is a great way to break into self-employment for those willing to learn how to sell products, and put the effort into finding profitable items. Whilst profits can be smaller due to the items common availability, sellers can often take advantage of cashback sites such as Quidco and TopCashBack to retain more of the profits.
Another pushing force behind this trend is that dedicated drop ship suppliers can be very difficult to find and vet for quality. Relying on another company to fulfil an order to YOUR customer takes a lot of control out of your hands, and your suppliers behaviour (delivery time, packaging, etc) reflects back onto you. If they perform badly, then your eBay feedback will suffer.
If you’re using wholesale drop shippers then it’s very likely you’ll have never heard of them before now, as they wouldn’t usually deal with a consumer for business. This can make placing orders very nerve-wracking. Made even harder by the fact that nobody likes to share to their sources too much for obvious reason, as a newbie it can be a real struggle to find reputable suppliers. It’s likely you’ll be dealing with very small companies, maybe even internationally run suppliers. It’s not unheard of for them to go bankrupt and not let their customers know! You usually find out when YOUR customers start complaining about non-deliveries.
This is why it can be preferable to leave it in the hands of a company such as Amazon, and they don’t mind as long as you’re not using an account with Prime membership attached!
Learning the world of E-Commerce, or even just Drop Shipping in particular is not an over night process. It takes hard work, dedication and persistence just like any business you would start but the rewards can be great if you’re smart with your work
eBay drop shipping is a way of selling online which doesn’t involve handling any stock or starting with any overheads. You simply list items from suppliers at a higher price and when they sell you order the item from the supplier to the customer who paid you using their delivery details from eBay. You pay some eBay and Paypal fees on each sale but pocket the profit for a few minutes of putting an order through.
You can make £1 profit on items and you can make £300 profit on some items. I’ve had sales of both, it’s completely possible. It does involve a bit more work than Amazon FBA does for the same profits, but you don’t need much money at all to start doing it. Which makes it a perfect way to start earning from home if money is tight for you.
Retail Drop Shipping
How it Works:
An item available on Tesco Direct costs £29 including postage.
The same item sells regularly on eBay for £42.
You list this item on eBay and when it sells, you make a Tesco order to your eBay customer and pocket the difference.
You fill in a few lines of delivery information and make around £8.50 after fees.
You would also put the sale through a site like Quidco or TopCashBack, save another few more %.
At the time of writing this TopCashBack had 1.57% cashback available on orders from Tesco Direct, so that would add another 46p onto your profit. Then you’d collect ClubCard points too, so add another 29p onto profits. This takes it to £9.25 profit for a few minutes work.
You can then relist this item and do this again and again until the price changes on Tesco or they go out of stock. It takes around 15-20 minutes to do a fairly decent listing once, so if you find a few hot sellers it’s just a case of relisting and placing more orders.
Much of this can be automated and streamlined through additional tools and software, but the idea is very simple and just a case of finding gaps in the market and compounding discounts on ordering from retailers.
Finding the occasional 20% voucher can also add a LOT to profits. Especially if you’re selling an item that costs a lot of money. For example, if you were making about £3 profit from an item that costs £50 to purchase, a 20% discount voucher would turn £3 profit into £13.
Whilst there’s a lot of competition on eBay as you would expect with something that pretty much anyone with an eBay account could start doing, there’s still good money to be made here. It’s just a case of being willing to hunt for the items and get them listed promptly. The more you learn about it all the easier it’ll become!
WHY Does it Work?
A common question people ask is why these items sell. Why are people willing to pay above retail price or above what it’s available at elsewhere?
There’s no one right answer but it’s a combination of people who don’t price compare, shoppers who habitually use eBay for everything, and people who just don’t really care about saving a few quid here and there. Either way, it works as many people have found over the last decade or so.
Whilst the odd customer does frown upon this, the vast majority just don’t notice nor do they care. They got their item at the price they were happy paying for at the time and you made sure it got there. If you are very feedback conscious, then you could even offer to refund the difference to the customers that query it.
Recommended Software to Sell More
SKU Grid (Price Tracking – LIFE SAVER)
SKU Grid tracks prices and stock levels for all of your listings. If anything changes on the suppliers website, then this tool re-prices your listing to accommodate those changes. This means you can have as many listings as your eBay account will allow without worrying about constantly checking hundreds of items.
When this tool came along, it pretty much solved a lot of sellers problems and barriers to scaling their business. They simply didn’t have the time to check hundreds of items manually and adjust their prices – Meaning that sometimes items would sell on eBay and the seller would find it out of stock on the supplier, resulting in lost revenue and feedback/defect issues when having to cancel orders.
Very cheap piece of software that has pay-plans based on how many listings you’d like to have it handle, making this the perfect tool for any drop shipping arbitrage hunter!
Hydra Lister (Mass Listing – TIME SAVER)
Hydra-Lister comes from the same team that brought us SKU Grid. This tool is revolutionary when it comes to saving time and scaling your business. As the name might suggest, it makes listing items on eBay quick and easy.
This will let you list with a few clicks from over 150 retailers, and integrates well with SKU Grid to monitor pricing and stock levels.