| How Dropshipping works with eBay By Joe Richey | | | | to privacy policy violations, and the well-known seller |
| Dropshipping is a term used in reference to a type of | | | | fraud. However, eBay has provided information |
| retail sales, where the retailer does not keep goods | | | | showing that only less than .01% of all the site's |
| for sale in stock. The retailer is in charge of passing | | | | transactions result in a confirmed case of fraud. |
| the customer's order with their shipment details to a | | | | In some of them, eBays argues that some of those |
| wholesaler, dropshipper or third party provider, who | | | | complaints are related to end users discovering that |
| dispatches the goods requested by the customer | | | | they have purchased an item from a wholesaler and |
| directly. | | | | not from a retailer, filling a claim because of the |
| Retailers using this sales model make their profit on | | | | difference of prices, or due to a very few other |
| the difference between the wholesale and the retail | | | | deceptive practices. |
| prices handled. Because the goods are not in stock, | | | | Dropshippers offer wholesaler prices indeed, but |
| many retailers have purchased some of those items | | | | retailers do not. The difference between a wholesaler |
| to be displayed at their land-based stores, allowing | | | | price and the eBay's listing price is the retailer's profit. |
| their customers to inspect the items, which are similar | | | | This cannot be considered defrauding the users, |
| to those that they can purchase by placing an order. | | | | however they are just lying a little bit when they say |
| Many retailers can receive from wholesalers and | | | | they have the goods in stock that they actually do |
| dropshippers different catalogs to increase the | | | | not have, and do not send from their own location. |
| number of goods on sale without actually investing in | | | | Genuine wholesale prices are never shown to the |
| any of those items, although some catalogs are not | | | | public by resellers, but can be found if the end user |
| for free, but always cheaper than buying | | | | has seen the item elsewhere and investigate. The |
| merchandise to display for customers. Dropshipping | | | | best way to determine if drop shippers are legitimate |
| on the Internet is a virtual matter involving digital | | | | wholesale suppliers is by paying attention to their tax |
| images of goods a retailer is selling. | | | | identification number, which is required within the |
| On the Internet, retailers can upload the description | | | | dealer application. Otherwise, established dropshippers |
| of the goods for sale along with pictures and other | | | | with wholesaler activities require either a Social |
| information. This is made through the retailers' | | | | Security number or a Federal Tax ID (EIN). |
| personal or commercial website, or listing the | | | | Furthermore, authentic dropshippers will never require |
| products at an auction site, such as eBay, where the | | | | membership fees to access their services, so they |
| potential buyers are waiting to bid. | | | | will never offer full or partial refunds after a certain |
| Because dropshipping, is a method of selling and | | | | number of inventory purchases are made. |
| distributing goods that the retailer does not have in | | | | Manufacturers, wholesalers, dropshippers, retailers and |
| stock, the listings usually include pictures and | | | | sellers are often mistakenly confused because of |
| information that are available to sales catalogs. | | | | their selling activity, but all of them use different |
| Manufacturers of goods and distributors are not one | | | | practices aimed at different clientele. |
| in the same. Hence, dropshippers are distributors that | | | | Depending on the management, dropshipping profits |
| just receive the order from the retailer and send the | | | | can be immense for retailers, but as sellers, retailers |
| items directly to the end user on the retailer's behalf. | | | | have to rely on the professionalism and goodwill of |
| Therefore, dropshipping involves 3 persons in the | | | | the dropshipper, particularly when all the deals and |
| selling process: the dropshipper, the retailer and the | | | | businesses with them are made via the Internet. On |
| end user, usually targeted at auction sites.eBay Inc. | | | | this basis, there is always a risk to get a wrong item |
| (NASDAQ: EBAY) is a successful online auction and | | | | supplying a faulty product, or when the dropshipper |
| shopping website, founded in September 1995, where | | | | downright sends an incorrect one. |
| people from all around the world buy and sell goods | | | | At eBay, the seller's reputation is affected for the |
| and services. Ebay is the leading online marketplace | | | | good or bad dropshipping practices, because to the |
| for selling physical and virtual goods, services and | | | | end buyer it does not make a difference whether |
| second-hand products, and collectibles from a diverse | | | | the seller is a retailer or not. Buyers want to receive |
| community of both businesses and individuals. | | | | the goods that they paid for, and they want to |
| It is estimated that the eBay community is comprised | | | | receive exactly what is listed, and not a similar |
| of around 46.1 million registered users in different | | | | product with the excuse of that the original is "out of |
| countries, speaking different tongues, eBay is the | | | | stock". |
| most popular shopping site on the web, thus the | | | | Due to a fraud prevention mechanism implemented |
| most frequently associated with dropshipping | | | | by eBay, users have a feedback system where they |
| activities because of the nature of the Internet. | | | | can submit their experiences after purchasing any |
| Online it is not necessary to have a stock of physical | | | | merchandise, reflecting their un-satisfaction if their |
| goods for sale, and many items sold are digital goods, | | | | expectations were not fulfilled. As bidirectional |
| easily processed without needing to be on stock. | | | | feature, both the sellers and the buyers can submit |
| Retailers at eBay usually sell small quantities of their | | | | feedback and rate one other. |
| products to other users registered at eBay's website. | | | | The rating system is only available after every |
| Whether physical or digital, sometimes those goods | | | | transaction is made. Buyers and sellers get a |
| are also available through a land-based store or listed | | | | "positive", "negative" or "neutral" rating. They can |
| at personal web pages or e-commerce sites owned | | | | leave a short comment or remark regarding a |
| by retailers. | | | | particular bid, for instance, when a buyer receives |
| Dropshipping is a common practice that occurs when | | | | from a dropshipper a product, which is not exactly |
| retailers receive a single large order for a product, | | | | that, was listed by the retailer. |
| and rather than route the shipment of those goods | | | | When buyers have problems with sellers or when |
| through their store, the retailers arrange for the | | | | they do not receive the goods listed, buyers can rate |
| goods to be shipped directly from the wholesaler | | | | sellers negatively, usually leaving a comment to harm |
| (the dropshipper) to the purchaser.eBay retailers sell | | | | the sellers' reputation or to warn other users about |
| millions of collectibles, equipment, furniture, | | | | their bad experience, and even submit a claim for |
| computers, appliances, vehicles, and many other | | | | fraud. The importance of the rating system at eBay |
| miscellaneous items, which are listed, sold and bought | | | | is based on the fact that buyers can examine a |
| everyday. | | | | seller's feedback history. |
| Because there is no limit to the number of listed | | | | In fact, new users are always encouraged to verify |
| items at eBay, a retailer can list a single book and | | | | the seller's history as a buyers' protection practice. |
| make available 50 units. These units are not in the | | | | eBay's feedback system protects buyers and sellers, |
| seller's stock, but available to be delivered in any | | | | who can also reject a bid when a feedback rating is |
| quantity to the final end user after arranging for the | | | | not enough for the seller's expectations. |
| delivery with the dropshipper to the final user. | | | | Another problem when a seller is involved in |
| Dropshippers are wholesalers, whether individuals or | | | | dropshipping activities is that there is always a risk of |
| companies, selling large quantities of goods and | | | | getting dropshippers that already have too many |
| merchandise to commercial, industrial, institutional, or | | | | sellers using their services. This can be discouraging, |
| other professional business users, or individuals acting | | | | because the dreams of exceptional profits disappear |
| as agents or brokers in buying or selling merchandise | | | | when a considerable number of eBay's users, are |
| for others. Thus, it is more likely that goods listed by | | | | selling the same goods and seeking the same |
| a retailer can be purchased from them at any time, | | | | opportunities to capitalize on below-retail prices |
| while in stock. | | | | offered by the dropshipper. |
| At eBay, dropshipping works as long as retailer can | | | | If the competition is high, the prices go down, |
| purchase the goods on sale from the wholesalers. | | | | reducing the planned profit margins, and the lower |
| However, there are rare and valuable items that can | | | | the profits and the less affordable the dropshipping |
| hardly be found as unique items. If an end user | | | | activity. However, knowing the basics about |
| wants to buy one of those rare goods, he/she must | | | | dropshipping, many users feel attracted to becoming |
| be aware if the retailers are listing a large number of | | | | sellers and develop a retailer activity using the |
| them, because users will be purchasing all items with | | | | services of one or more dropshippers. |
| the risk of fraud. If they have, more than one of | | | | If you are considering this possibility, before doing |
| these rare items for sale, then how rare is the item. | | | | anything, choose a product to sell. Deciding on a |
| Although, almost anything can be sold at eBay, the | | | | product is the first step towards any selling process. |
| listed goods must not be illegal nor violate the internal | | | | Many people fail at this point because the belief that |
| prohibited and restricted policy. Listing fraudulent | | | | using the services of a dropshipper, the items to sell |
| items or those misleading the buyer is absolutely | | | | are irrelevant, due to the fact that all items will be |
| forbidden. From physical and digital goods to services | | | | available at the wholesaler's stock instead of you |
| and intangibles, eBay is the super trampoline for | | | | own. |
| retailer sales. | | | | Although there are many factors to take into |
| Dropshippers and retailers work hand in hand to sell | | | | consideration when it comes to selecting your first |
| at eBay. Retailers are only know as sellers, who | | | | dropshipping product, most retailers focus their |
| usually bid on an item marked as new, with the goal | | | | attention on postal savings, selecting books, CD's or |
| in mind to ship the item directly from the dropshipper | | | | other easy to carry merchandise, while others |
| to the highest bidder. The seller's profits come from | | | | consider small items can cut costs, but there are |
| the difference between the winning bid and the | | | | usually more competitors selling the same items. |
| wholesale price offered by the dropshipper, minus | | | | Dropshipping can deliver to your customers from a |
| the selling fees from eBay. | | | | needle to elaborated pieces of furniture, so think |
| In another modality or dropshipping practice, a retailer | | | | carefully when choosing a product. |
| can use private freight carriers to transport large | | | | Once you have determined what you want to sell, |
| volume of goods. These items are delivered from the | | | | locate the distributor who will be in charge of |
| manufacturer directly to a postal office closer to the | | | | dropshipping the merchandise for you to the end |
| location where the end recipients live, instead of | | | | users. This is easily achieved by doing a research |
| deliver the selling orders directly to the dropshipper, | | | | using Google or any other of the major search |
| with the purpose to save time and postal costs. | | | | engines. However, there are special eBay |
| Whichever the modality, eBay has been involved in | | | | Dropshipping tools created to help you find |
| controversy, ranging from such dropshipping activities | | | | dropshippers in your area, nationwide or worldwide. |