Dropshipping on eBay

What exactly is drop-shipping?

Drop-shipping is a business model where a seller basically resells a supplier’s product. The supplier manufactures, stores, and ships products on the re-seller’s behalf. Given that the supplier is the one responsible for manufacturing and shipping these products, business owners have more time to focus on marketing and customer service in order to create a better brand image for themselves.

Why would someone practice drop-shipping?

In short, it’s a low-risk business model. But given its low-risk nature, the profits are also mostly low. In other words, drop-shippers only purchase the products as soon as their own customers purchase them, and this means that there are no minimum order quantities.

Now that we know what drop-shipping is, the main question arises – is it allowed on eBay? The quick answer is – sort of. The long answer is that even though it is legal under certain terms & conditions, it is highly restricted.

What could happen if eBay detects that you’re drop-shipping?

If eBay detects that you are illegally drop-shipping, for example re-selling products from another retail website or marketplace (Amazon, or AliExpress), they can and probably will give you a warning, and restrict those listings. This involves removing your Top Rated Seller badge, suppressing your listings (getting them displayed lower in the search results) or even removing them completely from the site.

Below you can see an example of an email that eBay sends out to sellers who violate their rules:

“We’ve determined that you haven’t followed our selling practices policy. We will be removing your Top Rated Seller status until your account is in compliance with the policy.

There is evidence on your account that you are purchasing items from an online retail or marketplace site after you sell the item on eBay and having that retailer ship the item directly to the customer. This is a violation of the terms and conditions section of our Selling practices policy, which states:

• Items you list must be in your inventory or you must have an existing agreement with a third party to fulfill the delivery of the item under the terms of your listing.

For more information on this policy, please go to:

https://www.ebay.com/help/policies/selling-policies/selling-practices-policy?id=4346

 

Regards,

The eBay team”

There have been cases where a lot of Top Rated Sellers on eBay have received this email even though they weren’t abusing the policy. If this happens to you, feel free to contact eBay and inform them about the situation and it should be easily rectified.

Our recommendation?

Our recommendation would be to simply follow the standard retail model. If you stock all your own items, it’s relatively simple to keep track of which items are in and out of stock. But when you’re sourcing from multiple warehouses, which are also fulfilling orders for other merchants, inventory levels change on a daily basis and can cause a lot of unexpected issues.

Also, have you ever been blamed for something that wasn’t even your fault, but you had to accept responsibility for the mistake anyway? Even the best drop-shipping suppliers can sometime make mistakes when fulfilling orders. These are mistakes for which you have to take responsibility and apologize. Mediocre and low-quality suppliers can cause endless frustration with missing items, botched shipments and low-quality packing. All of these can damage your business’s reputation. So pay close attention to what suppliers you choose to work with in the end.

However, regardless of whether you choose to use drop-shipping or not, the main problem still persists – it’s very difficult to stand out from your competitors, especially on huge marketplaces such as eBay and Amazon. That’s where Ad-Lister comes into play though – our award-winning listing software will help you with all of your e-Commerce needs. Everything from creating, editing and posting listings to managing your entire business from one single interface.