Drop shipping is a supply chain management technique. In this process the retailer does not keep goods in stock but instead transfers customer orders and shipment details to either the manufacturer, another retailer, or a wholesaler. The manufacturer/ retailer/ or wholesaler would then ship these goods directly to the customer.
Drop shipping works on eBay in a similar fashion. You (the re-seller) lists the items that you are going to sell on eBay. Your product would then be sold to the highest bidder. The buyer would in turn pay you, the re-seller, directly for the product. The buyer would also pay for all necessary shipping and handling fees. You, the re-seller, then pay the wholesale price to the drop shipper. The drop shipper then ships the item to the buyer, making sure to include the buyers appropriate name/ company address. In order to gain access to eBay you must first create an eBay account and username.
The next step is setting up your PayPal account. PayPal is the primary method of payment when you are selling products on eBay. PayPal also offers insurance for your money. If something is to go wrong with the sale on the buyers account, PayPal will refund all payments back into your account. You then have to link your PayPal account to eBay. There are two reasons why this step is required. The first is that this method will be the sole way of receiving payments when you sell product on eBay. And secondly eBay needs your PayPal address in order to collect their monthly fees.
It is important to then set up your business policies so that your customers have a consistent set of rules and guidelines that your customers can base their service upon. You must also input your payment and shipping policies. Now it’s time to list your products on eBay. There are certain guidelines to be used during this process. Product titles can have up to 80 characters. Be sure to include keywords in your title that will allow people to search for your product easier. When listing items on eBay it is very important to take into account the pricing. There are required eBay and PayPal fees; as well as the state taxes. All of these have to be considered when setting the price so that you are able to make a profit with the selling of your items. That is how drop shipping works in a nutshell when using eBay.