Where is Drop Shipping Allowed?Last Updated:
There used to be a time when online marketplaces were wary of drop shipping, and did not let their sellers make use of it due to security reasons. Besides, both marketplace and their sellers could be in hot water if a drop shipper failed to deliver on orders. But because of huge strides in the drop shipping industry over the years, more and more online retailers have been opening up to it, which is good news for individuals who want to run a business without the hassle of managing inventories and keeping expenses to a minimum.
If you are among those looking to take your drop ship-powered business to online marketplaces, read on! We will take a look at a few of the most renowned ecommerce platforms that allow sellers to make use of drop shipping, their pros and cons, and the corresponding procedures on how to start selling on each of their sites. Take note, this guide assumes that you have already partnered with a drop shipper and identified the products that you would like to sell. If you haven’t chosen one yet, you can take a peek at our take on the best drop shipping companies. You can see a more detailed discussion of each company under each review so that you can make an informed decision when finally choosing a drop shipper to partner with.
Drop shipping on Amazon
It’s a bit far-fetched to think that a humble online bookstore would later become not just a popular website, but a household name when it comes to the online retail world. Amazon is now the largest online retailer in the world based on total sales and market capitalization, surpassing Walmart for the latter in 2015. It ranks 4th in the United States and 8th globally for the most visited websites according to Alexa.com, which measures internet traffic of each website. The company houses a wide variety of consumer products, and has also given birth to their own homebrewed offerings, like Amazon Web Services, the Appstore, Echo, Kindle, and many others.
Fulfilment by Amazon: This program offered by Amazon allows you to store products in their warehouse – all you have to do is sell the items, and they will take care of packing, shipping, and even the customer service aspect of the business.
More Than 240 Million Active Members: With this amount of potential buyers scouring Amazon’s pages for a good bargain, your chances of a high turn-out for your business is pretty great, especially if you are able to offer cheap prices and a variety of products.
Cheaper Seller Fees: Again, compared to others, Amazon charges sellers lower for access to their platform. Moreover, if you are not a professional seller, their Individual plan only charges $0.99 on a per-sale basis, giving you more profit greater than your expenses.
Amazon Could Be Your Competitor: Amazon itself sells a whole variety of products, and they are a pretty large entity, so you won’t just be competing with other stores – you’ll be up facing the giant itself.
Sales Data Are Visible: A controversial issue for Amazon, there have been accusations that the company utilizes their seller’s data to give themselves an advantage. Your sales data are transparent to their team, which means they can easily identify which products are a hit and add those in to their virtual shelves.
How to drop ship via Amazon
1. Choose an account
- Amazon lets you choose whether you want to register as a professional seller, where you can sell more than 40 items per month and rack up unlimited sales for only $40 a month; or as an individual, where you will only be billed for $0.99 on a per-sale basis, but restricted to sell less than 40 items a month.
2. List your products
- Be sure to make long and detailed titles and descriptions for your items so that they will rank better against the same products on Amazon’s listing.
Drop Shipping on eBay
What started as a simple auction website meant to be a side hobby sprawled into a multinational corporation that allows business and consumer level selling. eBay is one of the most famous online marketplaces that have local operations in over 30 different countries. While it is still primarily an auction house, meaning it lets buyers bid on items, users can also directly order and pay for an item without going through the whole bidding process.
No Set-up Needed: Since eBay has a fixed template for all products listed under their site, there is no need to tinker with the appearance of your listing. Once you’ve uploaded product images, written a description and set the price, the item is posted ASAP.
Exposure to Potentially Millions of Buyers: According to Alexa.com, eBay is ranked the 9th most visited website in the United States, and 31st globally. This translates to thousands, maybe even millions, checking out the site on a daily basis, which means your posts can be viewed by a sea of potential buyers.
Fierce Competition: Not only will you be facing hundreds of sellers that may have the same items that you carry, but there are also sellers of second-hand items which, as you can imagine, are way cheaper and can easily attract customers.
Does Not Encourage Customer Loyalty: eBay’s platform does not really let you get in touch with previous customers regularly, so don’t expect to build a customer base here since most will come and go once the transaction is completed.
How to drop ship via eBay
1. Create an eBay seller account and pay the corresponding fees.
- eBay seller fees are dependent on the items that will be listed for sale. There are also additional fees for PayPal and seller tools, so you may want to check out their Standard Selling Fee section for more information.
- If you still haven’t chosen a drop shipping partner, you can check out eBay’s list of product sourcing services from their Solutions Directory. They have tagged the companies that have continuously delivered as Certified Providers and recommend you to work with them.
- You don’t have to indicate in your product listing that the item is from a drop shipper, but you are held responsible for the completion and customer service aspects of the transaction.
2. Add your product list
- Take product pictures directly from your supplier so that there won’t be any complaints of appearance discrepancies from customers.
- As for product descriptions, it may be better to use your own words so you can describe it more accurately, especially if you happen to have samples of the item. You don’t have to worry about SEO optimization, as eBay takes care of it for you.
Drop Shipping on Etsy
Etsy was created a little over a decade ago, housing mostly handmade, unique, and vintage items. It enticed sellers with updated tools and functionality that pushed individual exposure. Although ranking a little far behind in Alexa (57th in the US and 189th globally), it still boasts of 19 million active buyers. As you can see, they are no slouch in the market. They have also recently purchased Blackbird Tech, a start-up which develops AI that enhances search capabilities.
Popular in the Small Business Community: Etsy encourages small players to sell their items online. Even their algorithm is structured to lead traffic to newcomers to ensure equal exposure among sellers.
Helpful Community: Aside from multiple online guides on how to be a success in Etsy, the community within the website itself share their own experiences and tips as well.
Free Membership: Creating a shop in Etsy does not have any costs- you can create an account anytime you want for absolutely free. You do have to pay when you start listing items in your shelves, but at least you can start out without shelling any expenses yet.
Smaller Customer Base: Compared to Amazon and eBay, Etsy has fewer visitors, and had even less clicks upon the start of 2017. Their Alexa rank has been dropping every year, and it looks like there won’t be any changes anytime soon.
Item Listings Have an Expiration: Although listing a single item costs a measly $0.20, the listing will expire after four months, so if you are planning to sell items for the long haul, you’d have to pay every time it reaches the expiration period.
How to drop ship via Etsy
1. Create an account
- You can create a shop on Etsy for free. There is no monthly membership fee unlike in other online retailer platforms. However, every product that you list will have a fee of $0.20, and they take a 3.5% cut for every item that you sell, among other fees.
- Pick a name for your store – you can still change this as long as you haven’t opened the shop to the public yet.
- Do note that, in the past, Etsy did not allow drop shipping in their platform, but changed their policy in 2013. You would still be in charge of the customer service and after sales experience and they expect you to fulfill your responsibilities.
2. List your items on your shop
- Etsy is a place for creativity, so if you can find a way to present items in a more artistic take, the better.
- You can add a banner for your page for branding, so customers can identify your shop the next time they look for items.
- Try to expand your keywords to those that customers might use when searching for your items
And there you have it – the three best online retailer platforms where drop shipping is allowed. Each marketplace has their own strengths and weaknesses, so you better know which you can live with and without. In any case, if you have the resources, you can always build your own website while maintaining an account in any of these online selling platforms. That way, you have more avenues for selling your wares. Whichever route you take, may lady luck be on your side!