eBay Arbitrage is similar to Amazon Arbitrage. You use eBay’s platform and millions of buyers to sell products you don’t own or stock. You list items and as soon as they sell you buy them from your supplier and have them sent to your customer, taking a percentage of profit for your efforts.
eBay arbitrage is great because you can start a business with literally no money and no outlay whatsoever except some time and learning on your part. This is different from ‘normal’ businesses who normally invest in stock and hope it sells. While they are in possession of this stock they are effectively sitting on money, waiting for it to sell in order to make a profit. eBay Arbitrage flips this model on its head.
Why eBay Dropshipping Works
Many people think there is no more room for anyone else in this lucrative business. Wrong.
- There are millions of products and thousands of suppliers to choose from. Many are not yet on eBay.
- There are always new markets and products emerging. Trends, tastes and fashions are always changing giving continual opportunities for successful eBay dropshipping businesses.
- eBay now offers an International Shipping Programme. This makes it really easy to sell your products internationally. The great thing is you do not need to worry about international shipping rates, you just buy the product as normal, ship it to the eBay centre with the code eBay provides you and eBay takes care of the rest. eBay drop shippers typically report selling around 50% of their products abroad. Many countries do not have the selection of products available to them that your country does.
- There are many people loyal to eBay. Their payment details are saved, they have the app and they are familiar with the platform. The convenience factor means that if you get everything right then you can start making a profit after a few days.
- There are many tips and tricks that can be used to make the business a success. It is advisable to do a few online courses to learn everything you can from people who are already successful.
We only feature business blueprints that actually work and will therefore allow you to make money honestly and consistently. We decided to list a product to see if we could succeed. The results will surprise you.
So £63.99 X 1.4 = £89.59
We did a quick eBay search and saw someone else was already onto this product and selling for £89 so we priced the item at £85 to undercut the competition.
You can see the date we listed the item here 16th April 2016. We got our first sales the very next day. Yes, we listed the item on a Saturday and sold it on the Sunday.
Selling anything on eBay incurs two costs, eBay fees and PayPal fees. When starting out you will pay 10% to eBay and we had PayPal fees of 3.4% + £0.20. Your fees may vary from country to country and the more you sell the lower your fees will be. We decided to take 14% as the percentage to deduct from the selling figure to find the profit.
£85 – £63.99 (hammock cost) – £8.50 (eBay fees) – £3.10 (PayPal fees) = £9.41 profit.
The listing took a bit of time as you have to get everything right including optimising the title so your product gets found by the greatest number of people.
Once the sale was made, it took four minutes to place the order on eBuyer to dispatch to the customer. This means that we could potentially do 15 orders an hour. This would translate into an hourly wage rate of £141.15. This is the kind of money lawyers charge. Of course, we only sold 1 hammock. The aim is to continually build your listing to several thousand whilst continually improving, removing non-sellers and focussing on what sells more. This would allow you to start selling items consistently each day and make thousands of profit every month.
You can learn other tips in the eBay course.
Cashback sites offer money back on many top suppliers ranging from a 1% to 15% return. We signed up for Top Cashback as eBuyer were offering a 3.15% cash back on items like the hammock. To claim this, all you have to do is sign up to Top Cashback, search for supplier and then order the item as normal and the cash back will be credited to your account.
If you are only ordering a few items, your cash back will not amount to much. However, when you are listing 1000 items or so and making sales every day, your cash back will start to resemble a full-time income on its own. Many eBay dropshippers are making several thousand every month on top of the profits from their primary eEbay business.
It is also advisable to get a cash back credit card specifically to use for your eBay business. This will make cash flow and accounting a lot easier and, if you choose wisely, you’ll get a continual cash back on your expenditure. We signed up for an ASDA credit card on Top Cashback (bonus £10.50) that gives a continual 0.5% cash back on all spending. Spend a few hundred and this won’t be much but if you’re spending about £50,000 per month (giving you approximately £65,000 in sales), you’ll be earning £15,000 in monthly profit and an extra £250 cash back every month.
There are many more tips and tricks in the eBay course we recommend. You also get a tutorial from someone who has been doing this successfully, giving you the opportunity to learning from their mistakes so you don’t have to make them yourself!
Further educate yourself with these resources. Mirror what successful people are already doing by looking ‘behind the scenes’ of their businesses. David Dang Vu has a top selling course on Udemy. He takes you behind the scenes of how he made over $100,000 in his first year doing eBay dropshipping. He takes you through setting up your own eBay dropshipping business step by step.