The dropshipping business of eBay is highly intriguing. Whether you are a regular in the e-commerce market or not, this business does seem very lucrative and easier than a lot of others. So, you are correct to ask the question, “Is eBay dropshipping profitable?”. I am here to explain just that.
Dropshipping on eBay can be very profitable. Although the profit margin is much lower than other e-commerce business models. A seller can still make a lot of money by managing their business smartly and selling products in a larger volume.
In this article, I will explain the profit model and how you can be sure to secure profits if you decide to go into the business of dropshipping. The profit margin and explanation will also help you decide if this business is actually for you or not so I greatly urge you to read ahead.
How Do You Make Profits in Dropshipping?
Dropshipping business works like this; You list your products on eBay but you don’t have the products in your own inventory. But rather, you direct the orders you get to a wholesale seller and they ship the products directly to your customer.
This business is very lucrative because of how low maintenance of the business model is. You essentially do not have to have a large upfront investment or own any inventory. You do not risk losing money on any products you don’t sell because you don’t own them in the first place.
So, if you do not sell the products yourself how would you make a profit even? The answer lies in the wholesale supplier. The supplier you source your items to you sells them at a wholesale rate but you sell them at the price you listed them on eBay and you make a profit through that.
Your main work in this business would be marketing your products and handling the customers. You will have to provide them with service and create a good relationship with your wholesale supplier. But as there isn’t much room for investment in this business model the profit margin is also very low.
How Much Profit Can You Make from eBay?
As I’ve mentioned earlier the profit margins of dropshipping are much much lower than that of other e-commerce businesses. Where other e-commerce business models have a 30-40% profit margin, dropshipping businesses have a profit margin that at most is 6% only.
So, because of the small profit margin, eBay dropshipping businesses make large sums of money by selling products in large volumes. The more products you sell the better chance you have of making a formidable earning.
The top 10% of eBay dropshipping sellers make about 3.64USD of profit per sale whereas the bottom 10% lose 2.53USD per sale. The dropshipping business does have a risky situation. The top sellers make almost 100 thousand USD per year through their dropshipping business.
Even if you do not reach the top status, the average dropshipping seller on eBay earns about 10 thousand dollars every year. That is a very good side income if you ask me. The dropshipping business can be a bit tricky but it does have an opportunity for profit. If you are careful about a few things you too can make a good income out of this.
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Why Do People Think Profits Have Declined?
Although the market is very much alive and still profitable some people think “dropshipping business is dying” or, the profits are declining. I am here to tell you that they are wrong. Although some things have gotten more tricky and more competitive recently this is still a very profitable business.
Before 2019, a lot of people just used other websites as their source while dropshipping on eBay. A lot of customers complained about poor service and products shipping with packaging from other websites so eBay changed their policy.
Under the policy, the products cannot be a duplicate of some other website’s listing. Your product can not be from some other online marketplace. This is one reason people think the profit is declining. But, the proper way to do dropshipping is definitely sourcing your products from a wholesale seller.
Other than that, the market has also become very competitive recently which is natural. If you source your products according to eBay’s policy and are mindful about pricing and customer service you do not have to worry.
What You Need to Keep in Mind
A lot of dropshipping businesses fail only because of poor customer service. You need to keep in mind that the only thing you have to offer here is your service. If you can give your all towards service and ensure proper refunds and replacements to customers timely your status as a seller would increase.
You also need to keep the pricing in mind. You must make your pricing competitive. If you have begun the business you have already chosen your target product and market. Compare your prices to others and try to offer customers a competitive price to choose your products instead.
Finally, you should market your product as well as you can. Remember, on eBay you cannot really build brand recognition. So the only way people will end up knowing about your products is if you market it towards them. The more you keep on marketing the more people will keep on buying from you.
If you offer good customer service and market your product well enough you will be able to make a consistent amount of profit. Be sure to develop a trusting and respectful relationship with your wholesale supplier too as that will help your business in the long term. These few things will go a long way in making you successful in the dropshipping business.
Thank you for reading all the way through. I hope I was able to answer your question “Is eBay dropshipping profitable?”. I tried my best to sum up the nuances of making a profit by eBay dropshipping and some vital tips you should remember.
I hope that helped and I wish you all the best in your business ventures!