It wont be an exaggeration if we say that eBay and dropshipping are indeed two sides of the same coin! Neither side can do without the other and complements the other in the most valuable way.

Ebay Bidding Process And How Sellers Can Gain From It

The bidding process of eBay can be explained in a step-by-step manner for better clarity. And to understand the relationship between dropshipping and selling items on eBay, you need to observe the process through a sellers viewpoint. Lets take an example. Person A wants to buy an apple iPod on eBay. In this case, he or she will have to work toward it in the following manner:

1.Person A decides to place a certain maximum amount that he or she is ready to pay for the apple iPod.
2.He or she has to type the item name in the search box to get the listings and the current bidding price of the item.
3.If the current bid is $4.99, the person A can think of placing his or her bid at $5.99.
4.However, this bid is not shown on the screen and is visible only to the concerned bidder.

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A lot of people seriously doubt that dropshipping on eBay can ever be profitable. Other people say that eBay is a place where “only junk is sold”. While it’s true that one man’s trash is another man’s treasure (and I have a garage full of treasure just to prove this point), your actual probability of building a business selling junk is basically slim to none.If another bidder places a bid of $5.25, then eBay places bids in an incremental way on the behalf of person A. They continue placing bids until the bidding reaches the maximum amount that person A had entered. Hence, the bid slot for person A is $5.99.
5.If person A happens to be the first bidder, then the first bid is always the starting price. Also, if someone bids $5.25 as the maximum amount, eBay will bid for person A and display him or her as the winning bidder. But, when there is yet one more bidder who places, for example, the maximum bid of $6.05, then A is outbid.
6.In this case, eBay mails him or her regarding the bidding.
If person A is still willing to place another maximum bid, he or she can do so.

This is when the process changes into a race or in auctioning terminology, a bidding war where each bidder tries to win the last bid. And as a seller, you have to do enough research to understand this bidder psychology. It helps you immensely to get to the niche market, to know what is in demand and sells a lot. Once you have got all the products listed that are in demand, you should check out their dropshipping charges and find out which products can be bought and sold by way of dropshipping, in such a way that you as the middleman can earn maximum benefit. It is possible because you are doing business without getting into the paperwork and the inventories involved, plus the transportation, saving time, money, and efforts, which you can put better toward sales.

Pros

If you are an eBay store owner, dropshippers help you get a store as well as the inventory, and even assist you in shipping an item. Your buyer does not know that you are the middleman and a third party is involved. This is possible because the dropshipper uses your label. As you have entered into a contract with the dropshipping company and bought products in wholesale, you earn the profit that comes from the difference between the original price and the bidding amount that the last winner has placed. And on your part, you do not have to pay any expenses involved in storing or recording of inventories for the products.

This means that you have to invest nothing but your time researching on eBay and decide which products are in demand. Then you should look for a good dropshipper who can offer those products at good deals.

Cons

No process is perfect, and naturally there are some drawbacks in this procedure as well. You have to take care of several things before entering into a contract with the dropshipper, because the Internet is swarmed with many fraudulent and irresponsible people in this business. You should be aware of the problems involved and take due care and see to it that none of the following events occur:

Shortage of the ordered product, leading to delay in delivery. It is better to order the maximum number of products in advance and make your dropshipper get the necessary storage.
You should get in contract with a local dropshipper, because if problems in delivery arise or a wrong product delivery takes place, you can meet and check with the dropshipper do the necessary replacement.
Check the charges, subscription fees, and shipping fees of the dropshipper in accordance with the products. This is where your research is going to be tested; you have to find a product that has less dropshipping charges and yet sells well.
It is important to survive the market competition and emerge as a winner by listing the products that are interesting and also get sold well. One way to do so is by attracting customers with an unusual brand name rather than going to top brands where the competition is stiff.

If you are going to rely on your dropshipper for the delivery of your product, you are putting all your eggs in one basket! Or rather, somebody elses basket!! Unless you make sure that your dropshipper will meet the needs of your customer, you are risking your eBay feedback and your reputation as a seller.

So, get set to check the ups and downs of the trade and work out well toward this popular home business.