Drop Shipping for eBay

If you are interested in drop shipping, please read this information very carefully before clicking on the links to Drop Shippers or signing up for a drop ship program.

The Drop shipping companies are located under Drop Shipping in the Online Wholesale Sources navigation tab.

What exactly is drop shipping?

Simply put, drop shipping is selling something you don't own. There are companies that offer merchandise for sale that will ship the merchandise directly to your customer once you pay for it. Here is how it works:

1. You find a company that agrees to drop ship. You list their merchandise on eBay or your web site for sale without first purchasing it.
2. When the item sells, you collect the selling price (retail) and the shipping cost from you customer.
3. Now you send the wholesale (lower) price + the shipping and handling fee to the drop shipping supplier.
4. The supplier then ships the item to your customer.
5. Your profit is the difference between the retail and the wholesale price
   

There are two types of drop shippers and it is important to understand the difference:

1. Aggregators
2. Manufacturers or master distributors

Aggregators

Aggregators are companies that search distributors and overstock dealers for wholesale merchandise, buy it and put it in a warehouse where they offer it for sale on a drop ship basis. (We describe one of these companies, DOBA, below). In general these companies make their money from membership fees or handling fees.

Almost all drop shippers charge a membership fee or a sign-up fee. They do this to screen out people who just want to buy one or two items at wholesale prices for their own personal use. Also, drop ship companies operate on small margins. The fees are a way of keeping casual users away and helping to defray the inventory carrying costs. Before you sign a long-term contract or pay an application fee to any drop ship company, make sure they offer some type of guarantee or trial period.

Before we move on I want to point out that there are some out-and-out scams operating in the drop ship business world. Two of the worst are Simplx and Zibus. Their web sites are very enticing, but they are designed to suck you into a worthless program that can cost as much as $5,000.

DOBA, is probably the largest and most well-known drop shipping aggregator. They were one of the largest exhibitors at eBay Live and are also one of the fastest-growing drop shipping companies. What I really like about them is they actually answer their phone and will even give you phone support. Also their email support is very good.

DOBA uses a warehouse system. Types of products are grouped in warehouses. Their merchandise include jewelry, clothing, accessories, electronics, house & garden items, collectibles, tools, automotive supplies, kitchenware and more.

Every item has a pre-written description and a professional-quality photograph. You can simply copy/paste the description and photo right into your auction. This way you can launch dozens of auctions per hour. They also give you a utility where you can launch an auction right from their site. You simply select an item and click on the link that says Launch on eBay. The launch utility is a bit limited --but you can launch an item, then go into your My eBay page, pull up the item and revise it using eBay's easy HTML editor.

DOBA charges $29.95 a month to sign up but you can lower that fee by purchasing an annual membership, Best of all they offer a free trial, so you can actually find some items and launch them on eBay to see how they do before you commit to a one-month membership. Their normal free trial is 7-days, but if you sign up at this link you can get a free 14-day trial.

DOBA has over 90,000 products to select from. I checked the prices against what items are selling for on eBay and in general you can make money on some--but not all, of the products they offer. Some products are not very competitive, so it pays to first research a product you are interested in using eBay's completed items search feature to see 1) what the competition is selling it for and 2) if the item is actually selling on eBay.

My favorite research tool is HammerTap. With HammerTap you can research products to make sure they will sell and what price they will sell at before you waste your money on eBay fees listing items that won't sell or won't make a profit.

If you take the time to find the smaller niche products that very few others are selling you will do much better and bring higher prices. For example, a few months ago I was looking at Garmin GPS units. Several drop ship companies including DOBA had them and consequently there were hundreds of identical units selling on eBay. There was just no way to make money selling those units. Then I noticed a simple digital auto compass with a built-in altimeter. The drop ship price was just $49. I put them on eBay in a Dutch Auction for $79 and sold over 20 units within a 10 day period. I was the only seller carrying this unit on eBay at the time.

This year at eBay Live, DOBA was back in a big way. The company lowered its membership and set up fee, added thousands of new products and lowered its prices. They still sell plenty of items that you can find cheaper elsewhere, but they now have hundreds --or even thousands of items that you can make money on. Currently DOBA is the only general drop ship aggregator I recommend, but I am keeping my eyes open for others. there are some specialized drop shippers you will find listed on the drop ship category page under our Online Wholesale Sources tab.

Manufactures and Master Distributors

There are hundreds of actual manufacturers who will drop ship. Some of them do it directly while others use the services of a master distributor. When you work directly with a manufacturer of the product or their master distributor, then you are getting the lowest price available and this is where you can make the most money on eBay or a web site.

WorldWide Brands

DOBA and other drop shipping aggregators have some products you can sell on eBay, however, the best prices are always available from manufacturers who drop ship.

It is not well known, but thousands of manufacturers will actually drop ship for you. WorldWide Brands is not actually a wholesale supplier. They provide two products: A light-bulk wholesale directory and a list of manufacturers who will drop ship directly to your customers. WorldWide Brands has a staff of people who do nothing by research wholesale suppliers every day. Each of the manufacturers has been contacted by telephone and agreed to drop ship for eBay sellers.

WorldWide Brands charges a fee for this information, but it is well worth it. They are the only supplier of wholesale information actually approved by eBay. My company, The Auction Seller's Resource and WorldWide Brands are the only two eBay Information companies who are allowed to exhibit at eBay Live.

Chris Malta, the founder of WorldWide Brands runs his own radio show and is also the product sourcing editor for eBay Radio.

You are probably saying to your self right now --"I paid for wholesale sources --not for information where I can sign up to pay for more sources." I don't blame you. So, there is a way you can find manufacturers who will drop ship for free. Go to www.thomasnet.com. This is the home of The Thomas Register, the largest data base of manufacturers in the US and Canada. You will see category listings on the home page --just select one and start entering products you are looking for into the search box. Hint --you will find most of the products you are interested in, in the "Other" category. I have found companies this way. Although it is free --frankly it is a lot of work. Frankly, the small fee WorldWide Brands charges to do all of this work for is well worth it.

When you link to the drop shipping sources page you will see that we have listed both aggregators and several drop ship companies. Just because a company is listed does not mean we recommend it. You should check each company out carefully. If they charge a fee, make sure they offer a free trial period or a refund policy.