Start Out Drop Shipping on EBay

So, you want to make some money, but you don't really have enough capital to start out a regular business. What do you do? Well, you could either take out a loan/borrow some money or you could start out drop shipping! Well, what is drop shipping exactly? Let's find out.

According to Wikipedia, drop shipping is "is a supply chain management technique in which the retailer does not keep goods in stock, but instead transfers customer orders and shipment details to either the manufacturer or a wholesaler, who then ships the goods directly to the customer." Basically, this means that you first find a company willing to drop ship and you list items that they normally sell on a website (for all intents and purposes, we'll stick with eBay) with the price marked up so that you will make money after paying for the item and paying for any fees to sell. When someone orders an item, you go to the website of the company whose product it is, and you order it like you were buying it for yourself, except you instead input the shipping information of the person who bought it from you. This means that all you are doing is listing an item and collecting the money...you don't have to deal with the logistics of shipping. Normally, if you are set up as a reseller on the company's website, they will give you an option to send out the product via a blind drop ship, which is what you will want to do...more on that later. Check out the infographic above for a graphical representation of what I just explained.

This is the hardest part of everything. You need to find a reliable, legitimate company with a good track record. Remember that since you are basically only there to collect money (and profit), you have nothing to do with keeping a good inventory, shipping promptly, etc....that is up to the company you choose to work with. Realistically speaking, there are many things that could go wrong; they could ship out your order late, the package could get lost in the mail, the product could go on back order without you knowing, etc. This is why you must make sure that the business has good "ratings" or something like that. Now, I'm not going to give you any that I use, since there is a good amount of research involved, but I will give you an example that you actually can use. Vitabase has a good drop shipping program. Be sure to select the drop shipping program, not the referral program, if you choose to do this. Remember that you cannot represent yourself as that company...if you identify yourself in any way, you have to say that you are an affiliate (or reseller) of the company.

Since eBay is fairly simple to use, we'll stick with that for this instructable, although you can most certainly sell products in any other way you wish. You need to have an eBay and a PayPal account set up before we begin. I'm going to assume that you are already familiar with how they both work. If not, read a tutorial or the like on them, and come back when you feel confident. 

Now, let's go through how you create a listing for one item. I'll use the Tru-C BioComplex from Vitabase to demonstrate.

First you're going to to open up a tab in your browser for the product page of the Tru-C BioComplex (here) and the eBay Sell an Item page (here). Type in the name of the product to search for a category (I just copy-pasted in "Tru-C BioComplex"). You'll see that it shows categories it suggests in "Dietary Supplements, Nutrition". Now, if you want the listing to be free (so you only have to pay a final value fee), you'll select only one category (although, you can always list things in more than one category to theoretically increase views); I chose "Dietary Supplements, Nutrition > Vitamins & Minerals".

Now, it tries to find something that is already in the catalog so that you don't have to input as many details. unfortunately, it only shows "Now Shoes Tru-C BioComplex 60 vcaps" which are now from the same company, so I can't use its details. Click on the "Continue with your listing" button to continue.

Now just fill out all of the information on the eBay listing with the information from the product page on the Vitabase website. Vitabase is very helpful, since if you go to "My Account" and scroll all the way to the bottom (after you have registered to become a drop shipper), you will see under Dropshipper Profile and then Tools and Documents, "Marketing Kit". This is very helpful to you, since it includes pictures of every single product on their website, as well as a way to calculate shipping (and some other things).

Upload the picture of the Tru-C BioComplex to eBay. Now you can just copy-paste in the description of the item from the information stored in the .xls file in the Marketing Kit.

Using a website called SaleCalc, I can plug in how much it will cost to buy it from the company to calculate how much I need to put the price at on eBay for me to have about a 10% profit margin (you can choose your own margins...it's just an example). Remember that Vitabase gives a pretty good discount on their products if you are drop shipping them. The Tru-C BioComplex normally sells for $20.95, but since I am drop shipping it, it is only $14. By the way, since I am selling more than one, I am making this a fixed price listing. Since I am encouraging people to buy from me, I could just sell it for $19.95 (one dollar less), which gives me a 14.89% profit margin. You can always set your price higher if you feel it will work. If you choose to allow best offers, you can set it so it will automatically decline offers lower than the minimum amount you would need to break even, which in this case is $16.53.

The quantity you set is completely up to you....just make sure you don't put so few that you "run out" easily. I would start out at around 10-15 depending on your selling limits. If you have really high selling limits, you could make the quantity much higher.

As I normally make it so that I don't make money off of the shipping, you can plug in $4.50 (the cost to ship) into SaleCalc to see what price you have to set it at to break even (since you have to pay fees on the shipping as well). It ends up that I have to set it at a minimum of $5.62. That means I'll probably put the shipping cost as $5.75 so it's an easier number.

Be sure to set your handling time to how ever fast you can enter in the shipping information and buy the product after a person orders it from you. Since I'm on the computer everyday, I set my handling time at 1 day.

After clicking the Continue button, you have the option to add on some listing upgrades. if you choose not to, the listing will be free (which is always good)! Now just click "List your item" and you're done!

So, you've got your first sale, congratulations! You need to wait until the person has paid before you go ahead and ship it. Once they have paid, click on the Print Shipping Label button. There it will show you their address to ship to.

Now let's say that Jacob Banga living at 5694 Johnny Street, Rainbow, CA 97364, bought one bottle of Tru-C BioComplex. Once again, navigate over to the your Dropshipping Profile in your account on Vitabase. When you're there, click on Place DropShip Order. Find Tru-C BioComplex in the list and click Add Product to Cart. The total cost will come out to $18.50 ($14 for the product and $4.50 for the flat rate shipping). Now click "Continue to Shipping and Payment Information".

Enter in the shipping information of your customer ("Jacob Banga") in the spaces provided. After that, choose whether or not you want a packing slip with YOUR business information enclosed in the package or whether you just don't want anything at all.

Now enter your credit card information into the boxes (unfortunately you can't just pay with PayPal here...some places will let you) and click "Continue to Order Review". Double check that everything on the order is correct and then click "Place Order Now".

You're all done! Now just wait to get an email with tracking information so you can update the eBay order with that info.

Congrats! You've learned all about how to drop ship. Now go out there and find a good company to drop ship from. Remember that once you've found one, you've done most of the hard work; it's pretty easy from there on out! Always process your orders in a timely manner...you don't want to get bad feedback! Issues will occasionally occur. When/If this happens, be sure to thoroughly apologize to your customer for the inconvenience. Most of the time, the company you are working with will have a solution. If not, you may be stuck with a loss (by refunding the customer). Now this is a rare occurrence if you've chosen a good company, but just remember that sometimes it's better to take a loss than to get bad feedback on your account, which may deter other potential buyers from ordering from you.

Good luck!