by RoxH

Created on: November 21, 2009   Last Updated: November 22, 2009

Since its launch in 1995 eBay has become a popular and potentially lucrative way to start an online business. The simplicity of eBay's structure has made it easy for even technophobes to either buy or sell online and has offered a fantastic business opportunity to many entrepreneurs who were unwilling to take the risk of setting up shop in a traditional bricks and mortar enterprise. However, even with eBay providing a base for many new retail businesses, obtaining stock remained a hurdle for many would-be entrepreneurs who lacked the start up capital traditionally needed to start a retail business. Yes, eBay is the perfect place to sell second-hand, house hold junk but to start a sustainable business the eBay trader needs a steady supply of in-demand merchandise. Dropshipping has bridged this gap and allowed many more to start successful and profitable businesses on eBay.

Dropshipping offers the opportunity for retailers to buy individual units at wholesale price and crucially the dropshipper allows you to market their merchandise before making a purchase, in fact the retailer does not need to actually purchase any merchandise until they have made a sale. Once a sale is made and payment has been received the retailer simply buys the item from the dropshipper and requests that they deliver it directly to their customer.

This business model has obvious advantages for a new eBay trader. It allows small business start ups to get off the ground without making any significant financial commitment. Traditionally, to start any retail business you would have to invest potentially a large amount of money in stock without any concrete guarantee that you would be able to sell it on. However, dropshipping removes this risk as you can buy items as and when you make a sale, only paying for stock when you have received money from the customer. Thus, dropshipping has enabled many people who would otherwise have been unable to start a business on eBay to start trading.

The eBay marketplace is ideal for operating a business using dropshipping. If you are using a dropship company then you have access to their entire stock list and can market as many or as few different lines as you wish to and in any quantity you want. EBay has features, which allow you to save money on listing fees by listing multiple quantities of items in one. So, you can put twenty (identical) items in one listing, rather than having to pay for twenty individual listings. You can also open an eBay Shop, which

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