eBay’s Dropshipping Policy – Can You Dropship on eBay in 2019?
If you’re reading this article, there’s a high chance that you’re trying to find out the answer to one, big, question:
“Am I allowed to dropship on eBay?”
And no doubt, you might even be a bit confused too — there’s a lot of information out there.
From discussions on Facebook groups to YouTube videos with dramatic titles like “Is eBay dropshipping dead?”, you’re bound to find a few conflicting views.
And if that isn’t confusing enough, below is a copy of eBay’s dropshipping policy:
From reading this, you’d probably think that eBay arbitrage (like selling from Amazon to eBay) isn’t allowed.
Yet, our understanding is that’s not the case.
Despite what it appears to say, we believe dropshipping and arbitrage continues to be allowed on eBay. Not only that, but our understanding from eBay is that it will continue to be allowed long into the future as long as you play by the rules.
The problem is the way that eBay has worded their policy means a lot of people read it and believe their eBay accounts might be suspended simply for being a dropshipper / arbitrage seller.
Which, understandably, has caused some panic…
That’s why we’ve written this article.
At Salefreaks, we monitor hundreds of eBay accounts and have direct relationships with multiple contacts within eBay which gives us a lot of unique information and insight into eBay’s policies.
Having investigated this policy, we want to explain what it means for you and reassure you that there’s nothing to worry about.
- Are you allowed to dropship on eBay in 2019?
- What is eBay’s dropshipping policy? Here’s what dropshippers have to say…
- How to dropship on eBay while staying within their guidelines
- Why eBay needs arbitrage sellers and dropshippers
Are you allowed to dropship on eBay in 2019?
Simply put, yes.
eBay’s policy is just about demonstrating that they have the power to take action against dropshippers and eBay arbitrage businesses if they want to.
However, our understanding from eBay is that they’re only interested in penalizing and suspending arbitrage sellers that are abusing the eBay ecosystem and causing a bad buyer experience.
Take a look at the conversation with eBay below. eBay is very clear that they won’t suspend sellers for dropshipping inventory.
Therefore as long as you run your eBay arbitrage business in a responsible and serious manner you should be able to rest easy.
What is eBay’s dropshipping policy? Here’s what dropshippers have to say…
To get a range of views, we approached a number of successful eBay dropshippers for their opinion on eBay’s dropshipping policy. Here’s what they had to say:
Karim Ahmed (handles 100,000 eBay listings):
“eBay dropshipping is a great business as long as you’re prepared to work hard and be consistent. If you’re flagged by eBay, they’ll lower the impressions to your eBay items and this will lower your sales. This is why you need to work a little harder now.”
Jose Galeras (£600,000 eBay sales in last 12 months):
“I’m selling on eBay UK and I’ve noticed no difference in my sales due to dropshipping. I haven’t changed anything either. I think eBay’s dropshipping policy means in the long-term I’ll think about diversifying my e-commerce strategy.”
“I believe eBay’s dropshipping policy means that as long as you play by the rules and do things right there shouldn’t be any problems. My sales performance has been very consistent.”
eCom Tom ($1,000,000+ eBay sales in his first year):
“I don’t think eBay dropshipping is dead. I believe you can still do eBay arbitrage, it’s just harder now. I’m embracing the policy as it means there might be less competition out there”.
“Amazon to eBay dropshipping is very lucrative though I don’t know how it will be in the future. It’s also a great place to get started and it allowed me to get to where I am now very easily. I’m still going to continue doing eBay arbitrage with Amazon to eBay but I’ll also switch my focus to other things too.”
“Since the recent changes to the wording of eBay’s dropshipping policy, everything is the same for us. But in the e-commerce business, things change all the time. The key thing is that when things change, you need to be prepared to adapt and change too. That’s how you succeed.”
Clayton Blackshear ($7,000/mo profit on eBay):
“I think eBay’s dropshipping policy is just a hail mary to clean up sellers with bad selling metrics. The problem is the way they chose to handle it could also hurt the good sellers — both dropshippers and non-dropshippers. I agree that eBay should force out bad sellers but they should find a way to reward the good sellers too, no matter their business model.”
Tomas Kubala (managing over 100,000 eBay UK listings):
“I strongly believe that the best eBay dropshippers are very intelligent people and the dropshipping policy has been written with a message behind it for us to interpret.”
“We all know that more than one side benefits from dropshipping. On the other hand I think eBay does need some level of “adjustment” or “resetting”. What I mean by this is that eBay is trying to get rid of people who simply don’t have the dropshipping x factor.”
“I have noticed a drop in terms of impressions and listing clicks at times but people might forget that dropshipping is the type of business that constantly requires you to adjust to new situations. Any new policies and throttling of my accounts hasn’t stopped me achieving my best month ever in November 2018 on eBay in terms of gross sales of £145,000 and net profit of over £10,000.”
How to dropship on eBay while staying within their guidelines
If eBay doesn’t want sellers that cause “a bad buyer experience”, what do they actually mean?
Here are a few ways it can happen as well as what you should do to avoid it:
1. Don’t sell out of stock items
Sometimes, dropshippers list items on eBay that are in stock with their supplier/retailer at the time, but become out of stock a few days later.
The problem occurs when dropshippers don’t update their listings and a buyer subsequently makes a purchase on eBay that can’t be fulfilled.
We chatted to Joao and Vik, a couple of high performing eBay dropshippers to ask for their advice.
Their takeaway? Don’t rely on manually placing your orders. Instead, use a dropshipping software that does it automatically for you!
According to them, doing this eliminated nearly all the out of stock issues that they used to have as now their orders are placed as soon as the eBay sale goes through.
2. Provide item tracking
Providing item tracking makes for a great buying experience.
However, some retailers like Amazon use their own item tracking numbers which aren’t recognized by eBay’s systems.
Therefore, if you’re an eBay arbitrage seller that sources items from Amazon, you’ll need to convert the tracking numbers into a format that eBay recognizes and customers can use to track. Luckily, there’s a way!
At Salefreaks, we’ve teamed up with Bluecare Express which means that Salefreaks members can turn Amazon Logistics / AMZL tracking numbers into Bluecare Express tracking numbers.
The items will still be delivered by Amazon’s couriers, but now, you’ll have a tracking number & carrier combination that is recognized by eBay and can be used by your customers to track their orders.
As well as helping to avoid you being suspended, you’ll also:
- Receive less customer service tickets to deal with
- Win more “item not delivered” cases
- Become eligible for Top Rated Seller status
To learn more about this, check out our article about how to handle AMZL and TBA tracking numbers when dropshipping from Amazon.
3. Don’t list VeRO protected items
Generally speaking, dropshippers list hundreds if not thousands of items every day onto eBay. And most of it is done automatically too, with very little time spent reviewing every individual item being listed.
All of that is great for saving time and making money, but without using proper protection, you can accidentally list items that infringe the intellectual property rights of another company.
This is a big no-no for eBay.
Some of the ways this can happen include:
- Selling counterfeit or replica goods
- Using copyright protected photos
- Including branded logos in images without permission
- Making false statements about branded products in your listings
To find the answer, we asked Shezzy Sheikh, a highly successful dropshipper that raked in $200,000+ in sales in December 2018!
In the many years, he’s been dropshipping, he’s tried a lot of different software, which leads us to his critical piece of advice; make sure you keep a VeRO list.
A VeRO list is a database of brand names, phrases, and titles that often result in VeRO warnings when you create a listing.
As Shezzy is highly experienced and has been in the business for years, he’s created his own VeRO list. In the rare event that he’s notified by eBay of a VeRO violation, he adds the blocked words to his list and makes sure there aren’t any other instances in his active inventory.
If you haven’t been dropshipping for as long as Shezzy, don’t worry. Good dropshipping software can cross-reference the listings you create against their own VeRO list and flag up potential VeRO violations for you. That way you’re alerted of potential VeRO issues before you make your listings live on eBay.
To read more about this, see out guide about avoiding VeRO violations on eBay.
Why eBay needs arbitrage sellers and dropshippers
Here are the 2 main reasons that eBay will continue to need dropshippers on their platform for the long-term.
eBay gets ~5% of revenue from arbitrage
We estimate that eBay arbitrage comprises around 5% of eBay’s sales revenue which is a substantial chunk of cash. Here’s some “back of the napkin” calculations to consider:
In Q3 2018, eBay sold $22.7 billion worth of goods, which means around ~$1billion of revenue was from eBay arbitrage.
And with eBay fees averaging around 10% of the product value, it’s likely that eBay made ~$100m in fees from eBay arbitrage sales in Q3 alone.
Bottom line: eBay is a publicly traded company that works to maximize the profit of its shareholders. It would be very self-defeating to kill 5% of its revenue.
Arbitrage and dropshipping fills the inventory gap
eBay want to become everyone’s #1 choice to buy products from online.
But the only way they can do that is to make sure they sell the widest range of products available.
Think about it this way, if eBay were a real person that had nightmares it would look like this…
A customer goes onto eBay, searches for a product they desperately want to buy — but can’t find it! So the customer goes to another website instead (like their nemesis Amazon) to make their purchase.
Enter the heroes of this sweat-inducing nightmare… dropshippers and arbitrage sellers!
Dropshippers spend all day trying to find products to sell on eBay, and usually, the most profitable opportunities for them are items that aren’t currently available on eBay!
With thousands of dropshippers using software to scan for items to sell, they quickly fill any dreaded “inventory gaps” between what’s available to buy on eBay compared to other competing retailers like Amazon.
Not only that, but eBay knows that if you buy from eBay once you’ll be much more likely to buy from them again – even if it’s fulfilled by another retailer via a dropshipper.
Bottom line: eBay’s nightmare is having an inventory gap between what’s being sold on their platform, and what’s sold by competing retailers. Dropshippers help to quickly fill any gaps and keep customers buying from eBay rather than competitors.
Conclusion: eBay could stop dropshipping if they wanted to — but they haven’t
Let’s be honest, it wouldn’t be hard for eBay to identify the accounts of dropshippers and arbitrage sellers as most dropshipping software uses eBay’s API to connect directly to their platform. So if they really wanted to suspend arbitrage sellers, they could probably do so with little effort.
However, for all the reasons written in the article, they haven’t stopped dropshipping and they aren’t likely to in the future either.
Remember, eBay allows and approves of dropshipping software like Salefreaks when instead they could have chosen to terminate access.
- eBay likes and needs good dropshippers and arbitrage sellers that take their business seriously and provide a great buyer experience. It makes them money and closes the inventory gap
- eBay doesn’t want dropshippers who abuse their platform and provide a poor buying experience.
- If you stick to the rules and keep a high seller performance on eBay, our understanding is that you should have nothing to worry about.
- Make sure you provide a good buyer experience by preventing the sale of out of stock items, VeRO items, and providing item tracking.
- Relax! And continue running your eBay dropshipping business as normal.
The do’s and don’ts of eBay dropshipping
|Provide item tracking for all your sales. If you dropship from Amazon to eBay you can use Bluecare Express for this.||Use suppliers with no tracking solution – you won’t get top rated status and will be providing a bad buyer experience which eBay can penalise you for.|
|Use software that automatically orders and reprices products from your supplier.||Try to fulfil orders manually. If you try this you’ll sell lots of out of stock items which will harm your seller metrics and get you in trouble with eBay.|
|Use software that has a comprehensive VeRO list.||Use tools that list 1000’s of products without running it through a VeRO list. You’ll be likely to receive a VeRO violation which can cause the immediate suspension of your eBay account.|
|Use software to handle your dropshipping business.||Use a “manual account” i.e. dropship without software. eBay see this as gaming the system and trying to trick them into thinking you have a physical inventory account. We have heard reports from dropshippers like Dropship Tyler that doing this will cause you to be suspended.|