Drop Shipping for eBay

By Skip McGrath

If you are interested in drop shipping, please read this information very carefully before signing up for any drop ship program.

What exactly is drop shipping?

Simply put, drop shipping is selling something you don't own. There are companies that offer merchandise for sale that will ship the merchandise directly to your customer once you pay for it. Here is how it works:

1. You find a company that agrees to drop ship. You list their merchandise on eBay or your web site for sale without first purchasing it.
2. When the item sells, you collect the selling price (retail) and the shipping cost from you customer.
3. Now you send the wholesale (lower) price + the shipping and handling fee to the drop shipping supplier.
4. The supplier then ships the item to your customer.
5. Your profit is the difference between the retail and the wholesale price

There are two types of drop shippers and it is important to understand the difference:

1. Aggregators
2. Manufacturers or master distributors

Let's look at each type before you decide what kind of company you want to work with.

Drop Ship Warehouse Companies

Drop Ship Warehouse Companies, also known as aggregators, are basically middlemen. These companies list products in a virtual warehouse that other, real wholesale companies have. They don't really have any products in stock.

In general these companies make their money from membership fees or handling fees. When you order something from them, they order it from the real wholesaler, mark up the cost and/or charge you a fee. Because of this it is almost impossible to make any money as they have basically made the actual wholesale profit.

If you sign up with one of these companies, you will soon find that most of the merchandise they offer is already selling on eBay or Amazon for about the same price they are offering it to you. I have been selling on eBay successfully for over 8 years and in my opinion it is very difficult to make money on eBay with these types of sellers.

Manufactures and Master Distributors

There are hundreds of actual manufacturers who will drop ship. Some of them do it directly while others use the services of a master distributor. When you work directly with a manufacturer of the product or their master distributor, then you are getting the lowest price available. This is where you can make the most money on eBay or a web site.

WorldWide Brands

It is not well known, but thousands of manufacturers will actually drop ship for you. WorldWide Brands is not actually a wholesale supplier. They offer a service called OneSource. OneSource is a listing of real wholesale sources, that have all been contacted by WorldWide Brands and reached an agreement to work with eBay sellers and small internet businesses.

WorldWide Brands has a staff of people who do nothing by research wholesale suppliers every day. Each of the manufacturers has been contacted in person or by telephone and agreed to drop ship for eBay sellers. Their employees actually attend wholesale trade shows for all of the major industries to find the companies that will work with you.

WorldWide Brands charges a fee for this information, but it is well worth it. They are the only supplier of wholesale information actually approved by eBay. My company, The Auction Seller's Resource and WorldWide Brands are the only two eBay Information companies who are allowed to exhibit at eBay Live.

Chris Malta, the founder of WorldWide Brands runs his own radio show and is also the product sourcing editor for eBay Radio.

Worldwide Brands charges a one-time fee for lifetime access to their database. there is a way to get this information for free but it is frankly a lot of work. Go to www.thomasnet.com. This is the home of The Thomas Register, the largest data base of manufacturers in the US and Canada.

You will see category listings on the home page --just select one and start entering products you are looking for into the search box. Hint --you will find most of the products you are interested in, in the "Other" category. I have found companies this way. Although it is free --frankly it is a lot of work. The small fee WorldWide Brands charges to do all of this work for is well worth it.

WorldWide Brands One Source gets my 5-Star Recommendation. I use it personally and strongly endorse the service. If you use the links in the article you can get $20 discount that's especially for my readers.