To Drop-Ship or Direct-Source Your eBay Business?

In July 2015 eBay released its first ever rich list, with the top two Britons on the list raking in £1.4 million pounds per year each. In the wake of such success it is only natural to ask, “How do I get a piece of that?” For people looking to start their own eBay business, the first questions is deciding whether to go down the drop-ship route or direct-sourcing.

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The Drop-Ship Method

The drop-ship approach looks like a dream come true. The benefits of this model are no shipping costs, no overhead and no need to turn your spare room into a mini-warehouse. The drop-ship company of your choice takes care of all of that. The customer pays you, you pay the drop-shipper and they post the item to the buyer.

The downside to this approach is your role as the middleman’s middleman. After paying for the product, the shipping costs and the eBay fees, all that remains of a £50 sale are a few pounds. Drop-shippers with many clients are all selling from the same pool of goods, thus increasing competition. If the drop-shipper is out of stock on an item, the seller has to refund an unhappy customer and risk a bad rating. Many of these issues are elaborated upon by an eBay seller who shared his experiences on the eBay site.

Buying Direct-Source

All the positives of drop-shipping are negatives when it comes to directly sourcing your goods from the manufacturer. There is a degree of overhead and the seller must maintain their stock, ship the product and source the products that they wish to sell.

Your Store Front

The eBay rich list presented in the Daily Mail reveals that the top money-makers use the direct-source approach. They are their own middleman and not expending energy promoting someone else’s company.

The next step on the path to millions is designing a page. Like any other business, sellers are competing with other sellers, and buyers are wary of sellers whose pages appear unprofessional or amateurish. Time to look into eBay store design. There are many professional firms such as Frooition offering their services.

Can millions be made on eBay? Yes indeed – but judging by the rich list, you need hard work, determination and a clear business plan.

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