Drop Shipping with eBay: Researching the Competition

Drop shipping has become in this professional day and age a common supply chain management tactic used by many small businesses and retailers and, more importantly, sellers on eBay. The main keywords pertaining to the purpose behind drop shipping are "profit" and "convenience". Sellers eliminate a middle channel and have a wholesaler or manufacturer ship directly from the warehouse to a customer. The concept of drop shipping has added a whole new dimension to the possibilities for eBay sellers.

However, there is the issue of competition within markets for certain products. A seller needs to make a profit to benefit from the use of drop shipping. Competition can make it difficult for the private life of an eBay seller practically mirrors that of high-fire retail wars. Such as the back-and-forth between Meijer stores and Walmart Stores or Sam's Club versus Costco. How does a person research the competition to best attain the highest profitability?

Feedback

As a seller, to make a success out of an online business, the product is important. It has to be something someone wants or needs more than anything else. Searching through feedback on eBay provides comprehensive knowledge of some of the products people might be interested in owning or using, hence a seller needs to focus on those particular markets due to the high demand.

Supply Source

Sellers typically find their products online through several companies that offer drop shipping - aspects to keep in mind, though, are the fees, policy and quality of the company. Simply type in "drop shipping eBay" on a search engine, and the research is there. Finding the right niche for a product that can be in high demand but with little competition is important, too, in the manufacturer you decide to use for your online business.

Markets to Choose

eBay itself has a wealth of information of products readily available for any user, making research a matter of time and commitment. Keeping an eye on feedback from customers, how many sellers are selling any particular item. Naturally, a seller might want to choose a product and drop shipping company that isn't saturated in the market, or else there won't be much of a profit. The more sellers are selling a particular product within eBay, the less profit will be made by any one seller.

Powersellers

As said before, the less competition, the better profit. A "Powerseller" is an eBay seller that has achieved a high volume of sales and maintains a 98% Feedback rating among buyers. You can spot a Powerseller by the PowerSeller icon next to the user ID on the eBay interface, which tells you that you're dealing with one of the more successful sellers on the site. Members of the program also get special benefits such as prioritized customer support, promotional offers and merchandise, advanced selling education, research opportunities and many other rewards. Going up against a Powerseller right off the bat in a budding online business: you must avoid.

Drop Shipping vs. Wholesale

The difference between "wholesale" and "drop shipping" is simple: the concept behind drop shipping is that the manufacturer or warehouse actually delivers the product directly. Dealing with a wholesaler only provides you the product to ship to the customer yourself. The benefits of drop shipping are obvious. However, many wholesalers have drop shipping departments, and for eBay sellers, it would be a benefit to find a wholesaler that provides that option as well as the reason being that many scams exist out there, and finding a reputable wholesaler would be in the best interest of the online seller.

The Online Retail World

There is a wealth of demand and supply now thanks to the internet with possibilities for entrepreneurialism higher than ever. Understanding the possibilities of drop shipping and wholesalers and niche markets is paramount to the starter eBay seller looking to grow a new online business.