Over the last few years dropshipping has quickly become one of the most popular ways to run an e-commerce business.
This is mainly due to the fact that anyone can do it! As long as you have access to the internet and some free time, you’re good to go.
For those that don’t know, dropshipping is the act of selling products that you don’t currently possess. You find a product online that you can purchase, advertise it to someone else at a higher price, and when someone buys it from you, you simply order it to their delivery address.
This means that dropshippers can start a business with no money whatsoever, and they don’t have to store any stock. They only pay when they’ve received the money from the customer, and they never have to see, pack, or ship the product themselves.
The first decision a dropshipper needs to make then, is how to advertise their products to their potential customers. You can set up your own website using an e-commerce platform such as Shopify. Or you can use an online marketplace such as eBay or Amazon.
Personally, I have only ever used eBay for dropshipping. I did not want the hassle of setting up my own Shopify store and having to drive traffic to generate sales.
Amazon allow dropshipping, however their policy is stricter, and I did not want to compromise my current Amazon business, which is trading successfully.
Therefore, this will be an eBay dropshipping guide only.
Is eBay Dropshipping Profitable?
Yes. Margins are usually smaller than with other business models, but it has many advantages that outweigh this. Because it requires no upfront investment, cashflow is never an issue which makes rapid growth easier.
Is Dropshipping on eBay Worth it?
Definitely - 100%. It's the best way of dropshipping in the UK in my opinion.
Please note that this post may contain affiliate links, which means I will earn a small commission if you decide to make a purchase through my links, at no additional cost to you. Any information contained in this post is for general informational purposes only and does not constitute any form of advice or recommendation.
As an Amazon Associate, I earn from qualifying purchases. Please read our full disclosure here.
Dropshipping UK Guide
Before we get into the steps for getting set up, I would recommend having a look through the eBay UK Dropshipping Policy, which can be found here.
To summarise it briefly, eBay allow dropshipping from dropshipping/wholesale suppliers only. Unfortunately, eBay no longer allows sellers to dropship from retailers or other marketplaces.
You, as a seller, are still responsible for the delivery of the product within the time you have stated on your listing.
As a dropshipper, and someone who is selling items to make a profit, you will need to register for a Business Account. It is against eBay policies to sell on their platform using the free personal account, while running it as an e-commerce business.
Don’t worry, you can still have a business account without paying a monthly subscription, but you will pay additional fees when you list a product.
I would advise starting out on free business account to get started – you can always upgrade to a shop later if you plan on growing your dropshipping business.
The eBay business accounts available are as follows:
Subscription to a paid shopfront comes with other benefits, such as free access to Terapeak, a useful eBay analytics tool, among other things.
However, until you have more than around 83 listings, it will be cheaper to keep the free account and pay the listing fees.
A listing tool comes in handy with dropshipping for a number of reasons.
Firstly, it allows you to quickly pull details from the product page of your supplier, and use it to create an eBay listing in a couple of minutes, rather than 10-20 minutes.
Secondly, by using a listing tool, it forms a link between your eBay listing and the supplier website. This allows your eBay listing to reflect accurate stock levels; for example, if the product supplier only has 1 in stock, the listing tool will prevent your customers from purchasing 2.
The listing tool that I started with, and continue to use to this day, is provided by a website called Hustle Got Real.
There are other similar websites available, but I believe this to be the best due to its extensive range of compatible suppliers.
You can sign up today for a free account, which allows you to create and manage up to 30 listings – after 30 listings, you will need to upgrade for the reasonable monthly fee of £24, which allows you to manage 300 listings.
Make sure you also add the HGR Chrome Extension.
As stated earlier, you can now only use special dropshipping suppliers to fulfil your eBay orders, but don’t worry, there are plenty.
Head over to Hustle Got Real, and under the Settings tab, click Sources. This will show you a list off all the suppliers that are compatible with the Hustle Got Real listing tool. Bear in mind that most of these suppliers are retailers or marketplaces and are forbidden for eBay dropshipping, so be sure to pick out the dropshipping suppliers.
Some of the eBay dropshipping suppliers UK are listed below (these work with HGR):
Head over to the supplier websites and register for their dropshipping programmes.
Great, you’re all set up and ready to look for some products.
Pick a supplier and head over to their website. Then select a category of products to browse. Aim for products that are less than £50 or so to start with.
For each product on the supplier website, find the corresponding products on eBay by copying the title into the ebay search bar.
Look at the products in the eBay search results and compare them to the product from the dropshipping supplier.
You’re looking for a product that you can sell for at least 40% more on eBay. For example, if the product is £10 on the supplier’s website, then you should charge at least £14 on eBay. If there are eBay sellers selling the product for less than £14, then it will be difficult for you to compete with them and still make a profit – skip this product and move on.
Once you’ve found a product that can make a profit by either matching or undercutting the current eBay prices, we need to check that the product is selling well.
Amongst the filters on the left-hand side of the eBay search results, there is a tick box titled ‘Sold items’. Tick the box to show the search results for recent sold items. Check through the list and make sure that the product has sold for your price or higher. The number of listings on this results page will give you a rough idea of how many sales you can expect per month, considering other sellers as well.
Finally, once you have a suitable product, decide on your exact selling price. This should be towards the cheaper end of the price range. For example, if other sellers have priced it between £14-18, you want to be pricing somewhere around £14-15.
When setting a price, remember that if you are the cheapest offer, you will get more sales than the competing sellers. You may be able to price a little bit higher and still get sales, but it’s best to stay around the lower range.
To calculate profit, you need to remember to consider all costs. The main costs in a dropshipping transaction will include:
Cost of the product from the supplier
Shipping to the customer address
eBay and PayPal fees (12.9% of sale price + £0.30)
To work out the profit, take your eBay price, and subtract the costs.
To help understand the figures, I’ve included an example. I have used Banggood as my dropshipping supplier.
The product I have found is a Wowstick Electric Screwdriver. It’s £26.98 on Banggood, with free shipping to the UK. I know I’ll need to be able to sell it for roughly 40% more on eBay, which is £37.77.
On the eBay search results I can see a number of listings for this product; there is one priced quite low at £34.99, one very high at £68.99, and a couple around £40 mark. Since there is only one seller that is lower than my ideal price of £37.77, I think this product would be worth listing.
Then we’ll check the sold prices. I can see that the product has sold recently, and most of the sales are above my ideal price of £37.77, with just one that sold for less.
This is a good product to sell, I would happily list it at £37.77 and expect to receive some sales. Now let’s have a look at profit.
First add up the costs:
Purchase price £26.98
eBay and PayPal fees £5.18 (12.9% of £37.77, plus £0.30).
Total costs £32.16.
Profit = £37.77 - £32.16 = £5.61. A profit of £5.61 - worth listing in my opinion. Profits are usually smaller with dropshipping than you would normally expect from other e-commerce business models. As a percentage of purchase price, it's only around 20%. But don't forget, it has no upfront costs, and requires minimal effort.
Listing a Product
Now we've found a product, let’s get it listed.
Make sure you’re all set up on HGR and you’ve linked it to your eBay account and added the Chrome extension.
While on the product page on the supplier website, launch the HGR Chrome extension.
This will open a window that will allow you to create an eBay listing. It should have extracted all of the relevant information from the product page and pre-populated some of the fields for you.
Complete the form, filling in any blank fields where required. Check the description (changing tabs at the top) and make sure you’re happy with it. Add to it or change it if necessary.
Change the ‘Markup’ field to 40 – this will automatically set the price 40% higher than the supplier price. Or set the percentage to whatever value you have decided based on your research.
Ensure that the ‘Dispatch Days’ field is set to a time scale that you’re happy with. You will have to fulfil the order within this time frame. I would suggest 3 days or less is an acceptable eBay dispatch time.
Likewise, ensure that the ‘Delivery’ field reflects the actual delivery time of your product. You should be able to find the information on the supplier product page. Be aware that some suppliers ship products from all over the world, so make sure you check product-specific shipping times.
Lastly, on the settings tab, set the quantity (I usually leave it as 1, which means customers can only buy 1 at a time - when someone makes a purchase, the listing will just reset as quantity 1). You can optimise the title to get more sales (see section on Title Optimisation further down).
When you’re happy, click ‘List on Ebay’. It will take a few minutes for the listing to appear on your eBay account. Check through it and make sure everything is showing as you’d like it to.
Fulfilling an Order
Congratulations, your listing is live, and you’ve had your first order!
Now we’ll look at how to fulfil the order, it couldn’t be easier.
Go onto the Selling page on eBay, and you should see the order for your product. Click the blue button at the side, which should say ‘Print Postage Label’.
On this page you’ll be able to see the customer’s address on the left-hand side.
Go to the supplier website and find the product (if you’re struggling to find it again, head over to HGR on the My Listings page – there will be a link to the product page there).
Purchase the product from the supplier, remembering to input the customer’s address for the delivery address. There should also be an option to send the product in plain packaging – select this where possible.
Back on eBay, exit the ‘Print Postage Label’ page (do not purchase any postage). Back on the orders page, mark the order as dispatched.
You must always enter a valid tracking number on eBay – if a customer ever disputes whether they received an item, the tracking number is the proof that you’ve sent it. If you don’t add the tracking number, eBay automatically reimburses the customer in the event of a dispute.
Unfortunately some eBay buyers abuse this process, and they open a dispute even when they have received the item. eBay usually refunds them straight away if there is no tracking, which will leave you out-of-pocket.
When you get the email from the supplier to say that the order has dispatched, you can get the tracking number from them. Be sure to add it to your eBay order before the product is delivered.
One way to give yourself an advantage over other sellers is to optimise your title.
A lot of eBay dropshippers use the same title as the one given by the supplier. If there are multiple sellers with identical product titles, then they will be in direct competition with each other on the search results page.
A buyer looking at identical listings will be sure to just select the cheapest, which only benefits you if you’re the cheapest offer.
By including more keywords in your title, and taking out irrelevant information, you help your listing to appear in search results where your competitors do not, which effectively reduces competition, increasing your sales.
To do this, I use a website called Title Builder, which specifically finds keywords searched by eBay users.
Type in the main keyword or phrase into the search box (‘Electric Screwdriver’ for example), and select the relevant country on the right. The resulting search will provide you with the keywords most commonly searched alongside the main keyword on eBay.
Use as many of these keywords in your listing title as possible and replace the less-searched terms. Try to use all of the available characters (80 maximum). It shows the total at the edge of the title field on your HGR tool.
For the electric screwdriver example above, I have composed the following title:
It came in at 75 characters in total. I have removed unimportant information from the original title, such as ‘1F + 64’ and ‘Lithium-ion’. A customer is unlikely to search these when looking for this product. Added keywords include ‘Set’, ‘Tool’ and ‘Battery’.
Tips for Success
Fulfil your orders every day. The longer you leave an order before fulfilling it, the greater the chance that it could run out of stock at the supplier. In this instance you'd have to cancel the order on eBay and disappoint a customer. Once you’ve used your first 30 listings on HGR, if you want to stay on the free version you can always delete slow sellers to replace with better products. However, if done correctly, those 30 listings will more than pay for a HGR subscription. Read and follow eBay policies to keep your account active. Use eBay Promoted Listings to boost sales – you set the percentage you’re willing to pay for advertising and you only pay when that advertising leads to a sale. Enrol in the eBay Global Shipping and Click & Collect programmes. The Global Shipping Programme allows your product to be sold worldwide; eBay charge the customer the additional postage and all you have to do is send the parcel to eBay’s Local Shipping Centre and they handle the rest. For Click & Collect, all you have to do is have the parcels delivered to a store local to the customer. Both of these programmes expand your market of potential customers.
Dropshipping not for you?
Check out our list of 16 Side Hustles here.