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Dropshipping
Once you’ve decided what niche you’d like to concentrate on eBay, the next thing to look at is where to source stock.
This firstly means that you have to take a second to consider some things, firstly, if you haven’t done so already, you need to look at registering your business and getting some tax advice.
Secondly you need to do your research.
Before buying any kind of stock to sell, you want to make sure that you are getting at the right price.  You will make your money when you buy, not when you sell.
In this article I’m going to write about using a dropshipping company.

What is Dropshipping?
Dropshipping is a process of using a company so you have the ability to sell products without actually buying them.
You make a listing, decide on the price and run an auction for an item until you had a winning bid.
At that point, after the customer has paid for the item, you pay your dropshipper, give them the details and they ship the product to the customer.
You keep the difference between the price you bought the item at and the price you sold it at.
This arrangement works well for everyone in theory, the dropshipper doesn’t have to open a store front or worry about selling the products, and you don’t have to worry about holding stock or delivering it.

Advantages of using dropshipping
Dropshipping sounds brilliant on paper.
There are no upfront business costs, you don’t spend hours sorting out sold packages and waiting in line at the post office - all you have to do is sell the products and the dropshipping company takes care of the rest.  You don’t have to find a place to store stock, you don’t have to do anything really, other than when you receive an order.
There are also numerous dropshipping companies to choose from.  Any search on the Internet will bring up a multitude of dropshipping companies just waiting to help you make a profit.

Disadvantages to using dropshipping
With dropshippping you are leaving your customer service and your feedback rating to someone else. The two most powerful tools in creating a great eBay reputation and business so you need to have a really good think and ask some serious questions before jumping in.
What happens when the dropshipper runs out of the product your selling?  What if they supply a faulty product?
EBay bidders think they are bidding on an item that you already have in your possession, so if the company runs out of the product and can’t deliver, you stand to lose. Also if they send a product that’s faulty the buying will come straight back to you.
Are there fees to sign up with the dropshipper?
Will they charge you a processing fee, take commission?  Really look into this as some companies can alter their fees depending on the type of merchandise you are selling and when you put these fees together with the eBay fees it can really alter how much you stand to make.
Will customers come back to me, or the dropshipper?
Check what the dropshipping strategy is for the packaging on the items. Some companies could put their logo on the packaging and therefore cut out any return business from the customer, as they will be going to the dropshippers instead of you.
Is the dropshipping company well known? 
If so, you can bet that a load of other eager eBay sellers will also be trying to do what you are and if everyone is selling the same product then the market will be saturated and the profit you hoped to make will become much smaller.

In the next article for selling on eBay, we’ll look at using wholesale stock.

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