At first glance, drop shipping on eBay looks like every beginner's dream. All you need to do is list a product on eBay, collect money when it sells, and someone else does everything else. You don't have to purchase or store any inventory. There's no standing in line at Post Office, no packing items, and no need to buy a camera or other photo equipment.
Sounds like perfect business doesn't it? Unfortunately, nothing could be further from truth. In reality, for most people, drop shipping on eBay is almost a certain recipe for failure and 95% or more of sellers who try it will fail.
To give yourself any chance to succeed on eBay with this business model there are five rules you MUST follow:
1. You MUST locate a product that will sell in large enough quantities to allow you a chance to succeed. Finding a drop shipper who sells hand-woven wool blankets featuring Old Faithful erupting in center doesn't mean anyone is going to buy one to place on their bed.
When considering drop shipping any product, first thing you must do is sufficient research to determine if there's a market for it. If you are going to be successful theremust be a good-sized active market for your item.
2. You MUST locate a product that provides a sufficient markup that allows you a reasonable profit. You are not going to be successful in long term selling something that you only make a $10 or $20 profit from each item. With that kind of profit per item, it's just not reasonable to expect you can sell enough to attain long-term success.
3. Limit yourself to selling only a few related items that are all targeted at same market. By limiting yourself like this you can decrease your costs, become more knowledgeable about your market than other sellers are, and in long-term will make things more profitable.