How To Start Dropshipping On eBay in 2020 [A Step By Step Guide]

September 15, 2020

If you have been thinking about starting a business recently you have definitely heard of the business model called dropshipping. Dropshipping is when the seller does not hold any of the inventory. Instead, when someone places an order from you, you purchase that product from the manufacturer and then input the buyer’s shipping information. This leaves you with a risk-free business model in which you incur no inventory cost.

However, dropshipping does have its fair share of costs. These costs typically go unmentioned when talking about the benefits of dropshipping. For example, when you start a dropshipping store, most people use the platform Shopify. Shopify is a great platform as it allows you to customize your online store in a matter of minutes. The issue with creating a Shopify store is that you start off with zero traffic.

A Shopify store in and of itself has no traffic coming into it. It is up to you as the store owner to generate your own forms of traffic. The most traditional way to generate your own forms of traffic is through Facebook and Google ads. This is where your expenses will start to tally up.

Some dropshippers have perfected dropshipping on Shopify and have a positive return on ad spend (also known as ROAS). A positive ROAS means you make at least a dollar and one cent for every dollar you spend on advertising. As long as you make more money than you spend on advertising, you can keep reinvesting in your advertisements.

Most dropshippers unfortunately have not figured out how to have a positive ROAS. It isn’t uncommon to hear stories of dropshippers who spend a dollar on advertising to only generate fifty cents from their store. This then leads to a lot of lost money and people saying that dropshipping doesn’t work.

So, is there a way to start a dropshipping business for free? Meaning, you still spend no money on inventory costs, while also not having to spend any money on advertising. Yes! You can start a dropshipping business for free using eBay.

Is Dropshipping On eBay Worth It?

Dropshipping on eBay has had a lot of controversy over the years. Some people will point out flaws in the eBay dropshipping model and say things like: 

  • You have no control over your supply chain
  • There’s little-to-no customization
  • You can’t retarget your customers

While all of these are true, the upside of eBay overshadows its downside.

Yes, if you could choose between having a successful Shopify or eBay dropshipping business most people would prefer a successful Shopify business. However, if your dropshipping store fails, you would much rather it fail on eBay then you would on Shopify. That’s because with eBay you never have to worry about having a positive ROAS. eBay already has an estimated 182 million users on the platform!

Number of eBay Users That Help Show Why You Should Start Dropshipping On eBay
Source Oberlo

Whenever starting a new business venture, your goal should be mitigating your downside risk. We all want a successful business, but it isn’t uncommon for people to fail at their first few attempts. That’s why starting your dropshipping journey on eBay is the best way to go about it.

Can you dropship on eBay With No Money?

It is entirely possible to Dropship on eBay with $0. That’s right, no money. Starting August 1st, 2020 eBay is allowing sellers to list up to 200 items per month for free! Before they had it capped at 50 listings. Any item that you list over that 200 will only cost you $0.35 to list.

You also don’t need to pay a fee once you list that item. Once it is listed, it is there until it is sold. That means there is no monthly fee you have to worry about. Unlike Shopify, which charges you a monthly fee to use their platform.

You may be thinking, “Well I do need some money in order to pay for the product right?” Yes, that is true. You have to remember though; you only pay for the item after someone has bought it from you. So you’re paying for it only after you have been paid yourself. This allows you to have positive cash flow with your business and therefore incur expenses only after you have been paid first.

eBay Dropshipping Suppliers

Now that you understand what dropshipping is and how it is done on eBay it is time to find the right supplier. It is important to find the right supplier before you even find out what products you want to sell on eBay. A common mistake a lot of dropshippers make on eBay when they get started is they try to work with a multitude of suppliers at once.

This becomes difficult because when you work with multiple suppliers it becomes hard to keep track of which suppliers hold which pieces of inventory. We recommend you try out no more than three suppliers. After a few months of sales discover which suppliers lead to the majority of your revenue. Usually what happens is one supplier leads to the lion share of most of your income. 

Once you double down on one supplier you can start to discover things like reward points, supplier-specific credit cards, and other amenities that will help you cut costs. Once you find all the coupons and various discounts you can use for your supplier you can start undercutting your competition and increasing your sales even more. Below is a list of the most commonly used suppliers on eBay.

Dropshipping on eBay from Aliexpress

AliExpress is an online retailer based out of China that is known for its cheap products. It isn’t uncommon to see a product that you would buy in America at just a fraction of the cost from AliExpress. The reason why these prices are so low it’s because AliExpress lets you buy straight from the manufacturers instead of from retailers. They also only have the generic version of items on Aliexpress. You will be able to find wireless headphones, but never Apple wireless headphones. However, by purchasing generic products at a deep discount you can usually sell these products for a huge markup.

The main issue that people find working with AliExpress is their long shipping times. It isn’t uncommon to find items that take 2 months to ship. They also have a very long handling time and eBay requires that all items be handled within the first three days of a purchase order going through. If you do want to use AliExpress as your preferred supplier check out this video How To Dropship on Ebay From Aliexpress in 2020.

Dropshipping on eBay from Walmart

Walmart is another commonly used supplier as you can purchase almost anything from Walmart. Whether it is a bike a tent or backpack you can rest assured Walmart has it. Although the prices are usually much higher than what you’ll find on AliExpress, the shipping and handling are much more reliable. It isn’t uncommon to get something from Walmart within two days of ordering your products.

A lot of buyers on eBay will leave reviews of you on your eBay account. That is why it is good to work with a trusted supplier like Walmart who you know will fulfill your orders and get them to your customers on time.

Dropshipping on eBay from Amazon

Amazon is the biggest e-commerce store in the world and for good reason. The giant can literally sell anything under the sun with guaranteed 2-day shipping. It’s no surprise then why it’s a preferred supplier of many dropshippers on eBay.

The issues you face here are similar to the ones you’ll face with Walmart. The items on Amazon, although relatively cheap, aren’t as cheap as you could find on a website like AliExpress. It is also a very well-known supplier, which means you may face a lot of competition if you choose to use them. When multiple people use the same supplier to sell the same good, the only thing they can compete on is price. A price war is a sure fire way to erode profitabilty for all parties involved.

Dropshipping on eBay from Home Depot

Home Depot is the largest home-improvement retailer in the United States. They supply anything from household tools to construction products, to painting items. Home Depot is a unique supplier because it only has products within a particular niche. Suppliers like Amazon, Walmart, and AliExpress have multiple different categories in which you could purchase from. Home Depot on the other hand you can really only purchase home improvement supplies.

Even though this limits the types of products in which you can sell it also limits the amount of competition you will face. We personally recommend using Niche suppliers like Home Depot, Bed Bath & Beyond, and Best Buy as you will face much less competition then you would if you use a supplier like Amazon. Again try a handful of suppliers and see which ones work best for you. Once you find out what supplier works best for you, just use that one and get rid of the rest.

Finding Undiscovered Dropshipping Suppliers

If you really want to excel at dropshipping on eBay, you won’t just go niche, but you’ll also work with undiscovered suppliers. For example, let’s say you want to sell home improvement products, but you want to use suppliers that other dropshippers don’t know about. Go into Google and search “screwdriver set.” From there, immediately go to the third page of Google.

Companies that show up on the third page of Google are usually much smaller than the ones we’ll see on the first page and can’t spend a lot on an advertising budget. They will be hungry for your business allowing you to strike better deals with them.

If you type “screwdriver set” into Google and look at the first page, you’ll see sellers like Home Depot, Amazon, and Lowes. While Home Depot and Lowes are niche suppliers, they are huge multi-billion dollar companies. It would be near impossible to negotiate a deal with them.

Start on the third page and make a list of suppliers that sell your desired product. From there, look to see which ones sell your product cheaper than the major retailers or which ones have a contact form in which you can inquire about their deals.

How To Find Products To Sell on eBay

Now that we have found your potential supplier(s) it is time to find the products that are going to sell. This can be overwhelming for many dropshippers on eBay as there seems to be an unlimited amount of products you could potentially sell. So, how do you find the products that will sell the best?

The best way to do this is to find other sellers on eBay that already use your same supplier. For example, let’s say you chose Lowe’s as your preferred supplier. Watch our 5-minute video below to see how we would find other dropshippers who use our supplier.

As you can see in our video, once you find one dropshipper who uses your supplier, you can find dozens of items to sell. The best thing about these items is we know they’re already selling on eBay. This allows us to take all the guesswork out of finding the best items. If you want to dive deeper into the  possibility of dropshipping on eBay we highly recommend you watch the videos of Success With Sully. Sully is a 21-year-old entrepreneur who dropped out of college to pursue e-commerce full-time. His YouTube channel covers everything from dropshipping on eBay to Amazon FBA. Check out his video How to Dropship on eBay in 2020 CORRECTLY & Profitably WITHOUT Software to learn more about this topic.

eBay Software For Sellers

Once you start making money with eBay you can start to look into software to help you maximize returns. The software we recommend to help you optimize your eBay SEO as well as find hot products to sell is Zik Analytics. Zik Analytics helps take the guesswork out of what does and doesn’t sell on eBay and which titles sell the best for different products.

Again you should only look into buying software after you start making money. A lot of people think that investing in software will help them grow their business. Although it is helpful, businesses are created with one goal: To make money. If you start your business and one of your expenses is a monthly software fee, it makes it that much harder to make money. 

If you can’t figure out how to make money on your own and without the use of any software then you should give up on starting a business altogether. This will only work if you put in the time and effort to be successful. The fancy software can wait.

Key Takeaways

There has never been a better time to start dropshipping on eBay than in 2020. Dropshipping on eBay is one of the best ways to start a side hustle, and you never incur while also incurring zero monetary risks. You can list up to 200 items a month without paying anything, and you don’t have to worry about advertising as eBay already has 167 million users on the platform ready to buy. In our opinion, eBay is the best way to start dropshipping for beginners in 2020.

If you liked the idea of starting a side hustle that has limited downside risk but you weren’t too keen on dropshipping from eBay then you can always check out our e-book on How To Start A Side Hustle And Monetize Within 90 Days

This ebook was made for individuals who are looking to start their own side Hustle but have limited resources and limited knowledge of how to spot the perfect business opportunity for them.  It has all of our knowledge that we have amassed over our year of running The Success Bug as well as the things that we would do if we were going to start a side hustle today. I highly recommend you check it out if you’re serious about starting a side hustle in 2020.

Leave a Reply

Your email address will not be published. Required fields are marked *

One comment on “How To Start Dropshipping On eBay in 2020 [A Step By Step Guide]

  1. starting dropshipping with eBay is a good option but having your own store has its own perks like the retargeting you talked about. it becomes very easy to retarget your existing customers which is very beneficial for the business. thanks for sharing!