How Pini scaled his Amazon to eBay dropshipping business to over 1 MILLION listings
You could call Pini Rahum a mythbuster.
While some people wonder if eBay dropshipping is dying…
Pini sells 800-1,000 items on eBay every day.
While some people wonder if eBay dropshipping is scalable…
Pini manages 30+ eBay stores and handles over 1 million listings.
And while some people wonder if Amazon to eBay dropshipping is profitable…
Pini makes $30,000 net profit every month – with just Amazon as his supplier.
So who is Pini? How did he scale his business to 1 million items? And what can you learn from him? We sat down with Pini to get a behind the scenes look at how he created his eBay empire. Check out his story and his advice👇
- Why Pini became an eBay dropshipper
- How Pini scaled from 10,000 to 100,000 to 1,000,000 listings
- Using software you can scale with
- What the future holds for the business
Why Pini became an eBay dropshipper
Pini’s journey began in late 2014 when he and his brother, Orel, were looking for a way to make a few extra dollars on the side. At the time Pini was studying civil engineering, while his brother was in the army.
The “traditional” route to earn extra money was to get a job as a waiter in a restaurant. But that kind of work didn’t particularly appeal to the brothers.
“We first heard about dropshipping from a friend – and it sounded great. Take an item and advertise it on your store without buying it – there’s very little risk of losing money which appealed to us,” Pini recalls.
When you start selling on eBay, eBay will initially give you low item limits and slowly increase them as you sell more items. But in order to scale fast from the get-go, Pini and Orel decided to buy a couple of “stealth accounts”.
Side note: Stealth accounts are eBay accounts with someone else’s details that already have high selling limits. They are against eBay’s terms of service and Salefreaks advise against using them.
Things were looking good for the brothers. In early 2015 they began listing and selling their first items and for the first 3-4 months, they were making a decent side-income. But it all came crashing to an abrupt end when their decision to scale with stealth accounts backfired. eBay caught on quickly and closed their accounts.
Pini remembers the moment it happened; “Everything was going great until the day eBay closed our accounts. They said they wanted verification from us, and because the stores were not in our names we needed to talk to the people we bought the accounts from. However, these people wouldn’t provide the details we needed so the stores were closed and we were back to square one.”
The brothers were now faced with a huge dilemma that shaped them for years to come. How would they respond?
One option was to take the money they’d earned so far and quit. But Pini recalls that his brother Orel wasn’t about to give up so easily.
“Orel insisted on opening new eBay stores in our own names with our own details and on increasing our limits gradually. We also decided that if any stores of ours closed, we would figure out why they were closed and make conclusions on what went wrong so we wouldn’t make the same mistakes for future stores”.
So that’s exactly what they did.
And over the course of the next 4 years, Pini and Orel grew the largest and most profitable eBay dropshipping business we’ve ever seen at Salefreaks…
…a business that’s still growing! Take a look below:
2019 is projected based on current years sales performance
Here are just 2 of Pini’s 30+ stores…
Let’s dive deep into the formula they use to build and grow their eBay dropshipping business.
How Pini scaled from 10,000 to 100,000 to 1,000,000 listings
Principle 1: Focus on back-end profit
More sellers are joining eBay everyday which creates pressure on dropshippers to lower their profit margins to get sales. Pini is no different in this regard.
Take a look at his front-end profit margin over the past 4 years:
Front-end profit is only the profit made by subtracting the selling price of the item, from the cost of supplying it.
You can see his front-end profit margin steadily decreasing. But that’s only half the story…
Here’s a look at his back-end profits:
In every year, the amount of back-end profit by % and by $ that Pini makes has been increasing and replacing lower front-end profit margins.
While the amount of front-end margin that Pini charges can affect the number of sales he makes, his back-end profit is invisible to outsiders and doesn’t affect his buyer’s buying decision. That’s why it’s become so important to grow it.
Here are 3 ways Pini uses back-end profit to scale profitably:
HipShipper is a new way to ship orders to international destinations. The main benefits of using it compared to eBay’s Global Shipping Program are that it’s cheaper and available in more countries – therefore you can make a tidy profit on the shipping costs and sell your items to more markets!
To use HipShipper you’ll need to signup for an account and link it to your listing software. Once set up, orders are sent to HipShipper’s fulfillment center who forward it on to your customer for you.
Just using this over the course of year helps Pini make over $30,000 of additional profit and get a lot of international orders he would otherwise not have received.
30 days of Hipshipper back-end profits from February/March 2019
Want to use Hipshipper? See how Hipshipper integrates with Salefreaks
Amazon Gift Cards
Pini pays for his Amazon orders using discounted gift cards. By using a private gift card supplier, he gets 4% off the value of the gift card.
This means he pays just $96 for every $100 of Amazon orders…which has made a dramatic increase to his profits.
In 2018, getting 4% off their Amazon orders via discounted gift cards was worth over $300,000/year in additional back-end profit.
Looking to source discounted Amazon gift cards? Contact our live chat support for more information.
Credit Card Air Miles
Have you ever dreamed of flying first class? Or of experiencing the world’s most luxurious hotels?
You might be surprised to hear that most people that do don’t actually pay with cash, they pay with frequent flier miles or hotel points.
And that eBay dropshipping can help you do that!
While Pini pays for Amazon orders using gift cards, he pays over $100,000/month in eBay fees amongst his 30 stores using his credit card instead so that he can earn air miles and travel in luxury.
The best credit cards vary by location, and whether you want to earn air miles or cashback, but here are some cards you should consider if you’re based in the US or UK:
To see more ways to make back-end profit, take a look at our discussion with top dropshipper Karim Ahmed about flagged eBay accounts.
Principle 2: Build a winning team
While Pini and Orel have eBay stores that deal with 800-1,000 transactions every day, they spend very little of their time managing their 30+ stores.
Instead, they built a team of 8 employees in Ukraine to handle virtually all the functions of their stores. Pini recalls how their original strategy for regaining their time (which ultimately helped them scale quickly).
“At the beginning, we added just one worker that did customer service. He answered customers but didn’t deal with resolution centre or handling cases or returns. Slowly we increased his work to deal with more things and we recruited a second worker as well. In the background we created stores, dealt with money, solved complicated cases and we gradually gave them more tasks until they took everything from us.”
With millions of dollars of orders being processed, the number of tasks grew, as did their team. Below is a list of the roles of their Ukrainian workers:
How the team is organized
Manager – They have one manager that oversees the work of all the employees. She works 8-9 hrs/day and is seen as a partner to the brothers.
VeRO checker – They have 1 employee in charge of checking for VeRO violations every day. The main task of this employee is to enter all the stores, remove items and check for VeRO messages.
Item finder/lister – They have 2 employees that find and list items. One of them is focussed on finding items using ZIK Analytics, and the other lists the items to stores.
General tasks and optimizing – There are 4 employees with general roles. With so many stores, they arrange them into groups and these employees do tasks such as filtering items and dealing with customer service queries.
How Pini and Orel manage and motivate their team
When a lot of eBay dropshippers think about hiring employees, they often look for ones that are low cost and low quality. But doing so often comes at a cost – workers leaving. Pini’s approach is very different.
“Our manager has worked with us for 2 and a half years and the other workers between 1-3 years. We keep our workers, we give them bonuses, we give them gifts for Christmas and we treat them as best we can in order to make them feel part of the business.”
Retaining workers isn’t just about good employers though, it also means that Pini and Orel get the benefits of keeping experienced and skilled workers. That’s less time spent training workers, fewer mistakes being made and an ability to scale faster than other businesses.
In addition, the brothers created a cunning strategy to make sure the workers are always incentivized to work hard on their eBay stores.
“The main issue in dropshipping is the conversion rate, i.e. how many items you have compared to how many items you sell each month. We pay eBay for every listing we create so it’s very important to have a good conversion rate. So what we do to motivate our workers is provide a bonus program, if they achieve a good conversion rate we give them a bonus in addition to their regular salary.”
The dramatic impact of hiring workers and building a team
Building a team was a real game-changer for the growth of Pini and Orel’s business.
While in 2015 they were doing everything themselves, learning the skill of hiring and delegating saw dramatic increases in their store’s performance.
In 2017, when most of their workers were hired, there was a 4X increase in the amount of sold items in the previous year.
Principle 3: Create a sustainable growth strategy
There are two ways to grow your eBay business – horizontally and vertically. Pini and Orel have a strategy for both.
Horizontal Growth – Growing by building more eBay stores.
Vertical Growth – Growing by increasing the number of items you list on each store.
The Horizontal Growth Strategy
Pini and Orel manage over 30 eBay stores, 15 of which they’ve added within the last couple of years. Adding more stores brings a few benefits to their business:
- It’s easier to assign employees to be responsible for only a few stores and it creates a level of ownership.
- By making employees responsible for only a few stores they can see which employees are performing the best. The brothers also pay a bonus to employees with the best conversion rate which is easy to monitor when stores are separate.
- They have greater flexibility in applying filters selectively to remove/ add items to some of their stores but not all of them.
Having multiple eBay accounts is within eBay’s terms of service, as long as you don’t use them to avoid selling restrictions. This is why it’s vital that you take precautions to avoid violating eBay’s policies, such as by listing VeRO items.
Useful Link: Read more about eBay’s multiple account policy here
To avoid falling foul of the rules, Pini has started to list fewer items per day than he did a few years ago and has one of his workers dedicated to preventing any VeRO issues.
The Vertical Growth Strategy
The second part of their strategy is to get high selling limits to minimize their cost per listing. From managing over 30 stores, Pini has a simple tip for persuading eBay to let you expand.
“The best way to persuade eBay to up your selling limits is just to have great customer service and good feedback.”
And selling limits matter. A lot.
One month Pini forgot to upgrade his stores eBay subscription package with costly consequences.
“A while ago we lost $6,000 because we didn’t change eBay subscription. It meant we were paying $0.30/listing and eBay charged us $7,500 rather than $0.05/listing at $1250 – small things make a big difference. One of the biggest benefits of scaling is that the price is dramatically cheaper for a larger subscription.”
Using software that you can scale with
One of the most interesting things about chatting to Pini is when he talked about his views on eBay dropshipping software.
When people choose which software to use, most of them focus on looking for sexy sounding tactics or just following what someone else they know uses.
But as the owner of a business with up to 1 million listings, Pini places his importance on using software with practical features that help him and his team scale his business. With that in mind, he believes Salefreaks is the only software that can allow someone to scale to the numbers he has.
“I tried to work with a lot of software but none of them give you the option to make huge profits and easily manage huge quantities of items. I feel more comfortable using Salefreaks with 1 million items than their competitors with just 1,000.”
One feature his team relies on are advanced item filters.
“If you want to make money, you need to be able to optimize your stores quickly because you pay the same price for a listing if you remove it after 29 days or 1 day. With Salefreaks, it’s really easy to filter very specific things that competitors can’t. For example, if we want to remove all unsold items for the last 2 months -but only from 4 of our stores.”
Here are some of the specific deletion filters that they use:
- Removing items that are unsold for the past 60 days
- Removing items with a low amount of page views
- Removing inactive items (items with 0 inventory on Amazon)
Something Pini realized was that when you sell 1,000 items/day, you get a lot of tickets from customers. But with multiple eBay and Amazon accounts it can be tricky to keep track of which store the customer ordered from and which Amazon account is fulfilling the order. Luckily, Salefreaks CRM takes care of that for him.
“When you receive an eBay message on Salefreaks, you have all the details next to the message. You can also add notes – for example, if one of our workers doesn’t know how to respond to a customer they can create a note for their manager or a note for themselves such as “I’m waiting for an answer from Amazon”. At the same time on the left side, you can see how much the customer paid, which Amazon account it was ordered from and all the details you need.”
He continues; “There’s a lot of thought that goes into it all – some software can’t even handle multiple Amazon accounts – and we have over 30 of them! You need to think about these things if you want to scale”
If Pini rates scaling as his top focus, his second is survivability – and the biggest risk to that for most dropshippers is receiving VeRO violations.
“Salefreaks have a very good VeRO system with 3 levels of VeRO, where you can choose to take the risk or not. Because they’ve been around for so long, their VeRO list is extensive and is constantly improving.”
What the future holds for the business
Some people might think 1 million listings is big enough, but the brothers show no appetite to stop growing. Recently, this was put to the test when they received a tempting offer.
“I had an offer around 1 and a half years ago to sell the business for a huge amount. But we want to wake up in the morning, see the transactions, see the income and to transfer huge amounts to the bank who now have great respect for us.”
So the question becomes, what next? How do you keep growing when you already have 1 million listings? What’s their strategy going forward?
“I think we’ll look to sell in more locations other than just eBay US, but our Amazon to eBay strategy is working just fine so far, so that’s what we’ll keep with!”
Want to follow in Pini’s footsteps? Join Salefreaks today!