Drop shipping products - is it for you?

Drop shipping products explained

Drop Shipping Products - What Is It and How Does It Work?

Do you like the idea of making money on eBay, but not the idea of having to package and ship products? It is possible to make money on the popular auction site without handling an actual product. How? By having items drop shipped!

If you are curious or serious about starting an eBay business, you might want to review our recommended eBay training.

Drop shipping is an arrangement whereby you get orders for a company's products, collect the money, then send the customer's order and the price you pay for it to the company. You keep the profits, and the company sends the product directly to your customer. It's that simple.

How Do I Get Started Drop Shipping Products?

There are lots of companies that will drop ship products for their distributors. You can find them by doing an online search for "drop shipper". You may also be able to get recommendations from friends or business contacts.

It's important to do some research on any company you consider becoming a distributor for, and this is especially true if they will be drop shipping the products. If they don't deliver the items as promised, you are left holding the bag. So it is a good idea to check the company out with the Better Business Bureau before signing up with them.

If everything checks out and you decide to become a distributor, you'll need to make sure you meet their requirements. Most require that you have a wholesale license in order to get the best prices, and some have further requirements. Some also put restrictions on how you can promote their products, so be sure to read the fine print.

How Can I Sell the Products?

Most drop shipping companies will allow you to sell on eBay. When selling on eBay, it is important to make sure you make enough money from each sale to cover your costs. This requires a clear understanding of the company's shipping and handling charges, as well as how much you will be paying for the items themselves. Setting your starting bid at a price that will ensure a profit is crucial.

You can also set up your own website to promote products in most cases. If you don't want to do it yourself or hire a web designer, many drop ship companies offer website packages to their distributors. Some companies offer mail order as an option as well.

Getting the Best Prices

Some drop ship companies offer products to all distributors at the same price. But most give discounts to distributors who have higher sales volumes. This results in more money for both the company and the distributor.

Some companies charge monthly fees for membership in their drop ship program. Others offer free memberships, but give bigger discounts with paid ones. It is up to each seller to determine whether or not these fees are worth it to him.

Many eBay sellers do very well with drop shipping. It gives them a way to make money without physically handling the products. If you are considering eBay but would rather not deal with inventory, drop shipping could be the answer you've been looking for.

Items that sell are subject to final value fees. These are based on the price the item sells for. The more the item sells for, the higher the final value fee, but the lower the actual percentage of the final value.

If you wish to set a reserve for your auction, you will have to pay a reserve fee. This fee varies depending on the reserve amount. The reserve fee is fully refunded if the item sells.

The Buy It Now feature allows buyers to purchase your item without bidding for it. Buy It Now can be used in conjunction with a regular auction, or it can be the only way a seller offers an item. There is a small additional fee to enable the Buy It Now feature.

Picture Hosting Fees

eBay sellers can include one picture with each listing at no additional charge. There is a fee for each additional picture hosted by eBay. You can also pay extra to have your pictures supersized.

There are two ways to reduce your fees if you are using multiple pictures. One way is by purchasing eBay's picture pack. It allows the seller to add more pictures and supersize them all for one flat rate. You could also host your pictures on your own web hosting, or on a free photo hosting site such as Flickr. The only disadvantage to this option is that you can't use eBay's picture show option, which allows buyers to see all available pictures as a slide show at the top of the listing's page.

Listing Upgrade Fees

There are several ways that a seller can upgrade a listing. These include gallery pictures, subtitles, bold, highlight, and border. Gallery pictures are the most common upgrade, as they allow a thumbnail of the product picture to be displayed next to the listing's title in the search results. Listing Designer is another useful upgrade, especially if you don't know how to use HTML to format your listing.

There are also several packages you can purchase to have your items featured on the eBay home page and in search results. These packages are rather pricey, so they are best used when listing items that will bring a large profit.

Other Fees

Some categories on eBay have fees that are different from those of standard listings. These include real estate, automobiles, and business and industrial equipment. No matter what type of item you are listing, it is important to know exactly which fees will be assessed before setting a starting bid or reserve price.

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