Is dropshipping allowed on ebay?

[usgamecollector]

I don't drop ship all the time, but sometimes if there was an error and i'm out of stock or I find a cheaper price I will drop ship an item so I don't get bad feedback. I understand the risks of drop shipping but i've never had problems with it.

I asked an ebay agent a month ago if this was allowed, and he said yes. I talked to someone today who said no and that ebay is starting to crack down on dropshippers.

I found this page https://www.ebay.com/help/selling/posting-items/setting-postage-options/drop-shipping?id=4176

It says dropshipping is allowed from a wholesaler, "However, listing an item on eBay and then purchasing the item from another retailer or marketplace that ships directly to your customer is not permitted."

So is this article and the ebay rep correct that they will close your account if you buy from another retailer to send to the buyer?

[luckythewinner]

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If you buy something to fulfill a sale transaction after the sale has been made, that is technically arbitrage. In your case, you are not doing it to make a profit, but to fulfill your transaction and possibly at a loss, but if the transaction goes bad, it is still arbitrage, and it isn't allowed.

Arbitrage is not forbidden by eBay; only arbitrage that is shipped directly from the supplier is prohibited. Arbitrage itself does not violate policy as long as you purchase the item and ship it yourself.

eBay used to have a policy about product availability that stated in fairly vague terms that you had to have the item "available" for the duration of the listing. But that seems to have disappeared as a hard and fast policy - I suspect under the assumption that out-of-stock defects and late shipments would indirectly take care of those sellers who failed to deliver.

[readabouthorses]

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@the*dog*ate*my*tablecloth wrote:

Thanks lacemaker! You shared my thoughts exactly about retail arbitrage.

It hit really big a couple of years ago when someone started advertising a tool that would do it automagically. It attracted a bunch of monkey-dos who were more interested in making a quick buck with no effort than they were in happy buyers.

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That tool is still out there. I was just looking at their Facebook Group page. Somewhere in YouTube is a video that shows exactly how to set it up and how it works.

I think it is like this: when it work well no one cares but when it goes wrong it goes terribly wrong. I've asked a few of these sellers questions about what they were selling and they were clueless and some just responded that it was "out of stock" to get rid of the questions.

[lacemaker3]

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@luckythewinner wrote:

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Arbitrage is not forbidden by eBay; only arbitrage that is shipped directly from the supplier is prohibited. Arbitrage itself does not violate policy as long as you purchase the item and ship it yourself.

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Yes, arbitrage is against policy, only they don't use that word to describe it.

https://www.ebay.com/help/policies/selling-policies/selling-practices-policy?id=4346
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Terms and conditions

It's important that you clearly specify the terms and conditions of the sale in your listing so that buyers know what to expect.

What to do

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You're required to meet the expectations you've set in your listing:

• ..
• Items you list must be in your inventory or you must have an existing agreement with a third party to fulfill the delivery of the item under the terms of your listing

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If an item is purchased after the sale to fulfill the transaction (= arbitrage) then the seller does not meet this bullet point in the Selling Practices policy. The item they purchased for arbitrage is not in the seller's inventory, and the seller does not have an agreement with a third party to fulfill the transaction.

I don't think it makes any difference if the seller has the item shipped to themselves and then ships it on to the buyer, or if they have the item shipped directly to the buyer. The first option just adds more delay, anyway.

[lacemaker3]

Too late to ^^edit^^

Maybe there are less likely to be problems with the transaction if the item is shipped to the seller and then shipped on to the buyer. Except for delays in the delivery, which could be a big problem. I suppose you could argue that it was in the seller's inventory when it was shipped to the buyer, but it wasn't there when the listing was posted and purchased. But, this is still a risky business model, and if the buyer complains, then eBay may decide to use this policy to stop the seller from doing it.

As an example of how badly an arbitrage deal can go wrong:

I first ran into this as a buyer when I purchased an expensive designer leather jacket. It turned out the seller was using the money I paid to purchase the item to send to me. They ran into trouble because PayPal/eBay put a hold on the payment, probably because of a case that another buyer had opened against the seller a few weeks earlier. (The seller had asked about the previous case in the Community.)

The seller could not purchase the item with the payment on hold, so they cancelled my purchase and tried to refund, but because of the issue with their PayPal account (negative balance because of the previous case) the money from my payment was not available to refund. The refund was sent as an e-check, and two weeks later after it bounced twice, the cancellation/refund failed and the transaction was no longer cancelled. I had to get eBay customer service involved to start an INR case early. The estimated delivery was late January, when the purchase had been made in early December. I really didn't want to wait 2 months before even opening an INR case, because the seller had clearly stated that they would not ship the item.

Having so much of my money tied up for about 4 weeks, before it was all over, could have been a major issue for some buyers because it was just before Christmas. Luckily, I was able to deal with it, but I was definitely not happy about it. The seller got NARU'd shortly (probably didn't pay eBay back for the refund promptly), then got reinstated but was NARU'd permanently a few months later.

[luckythewinner]

I have no doubt that arbitrage (or dropshipping for that matter) is a risky business model - I never suggested it wasn't.

But thanks for pointing out that part of the selling practices eBay policy - I thought they abandoned it when they remove the separate "Item Availability" section.  I stand corrected!

[mam98031]

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@usgamecollector wrote:

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@mam98031 wrote:

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@usgamecollector wrote:

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@membersinceaug2001 wrote:

Nearly every new item I look for on here is drop-shipped, usually from amazon.

Little guys don't run variety stores filled with new goods of every kind, drop-shippers do.

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yes i've seen many drop shippers on here and most use the same template, they are pretty easy to spot.

If eBay is cracking down on dropshipping they are going to lose a lot of items and I would think sales, but I don't know.

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I don't think Ebay is "cracking down" on dropshippers.  Well at least not ones doing it the way that is within the Ebay rules.  The other thread that was mentioned about a TRS seller that has been warned.  That thread appears to be a bit more complicated.  But certainly an interesting thread.

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a large majority of dropshippers on ebay ship from amazon. According to the ebay page it is against ebay rules since it is a merchant and not a wholesaler.

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Ebay doesn't have that information at face value.  There are lots of sellers on Ebay that use Amazon store their stock at Amazon facilities.  The Ebay seller when they get an order, they have it shipped from Amazon with their own stock to the buyer.  This they can do as a drop shipper on Ebay.  It is the seller's stock.

But what they are not suppose to do is use a seller from Ebay, Amazon or anywhere else that doesn't know they are going to be used as a drop shipper for them without FIRST having such an agreement with that other seller or vendor.  The agreement is suppose to be in place BEFORE an item is sold.

[moo*cow*corner]

---General Reply----
I don't have a huge problem with dropshipping. As long as I get what I ordered, on time, I'm good.

It's drop-returning that causes problems for me. If my purchase is dropshipped from Amazon, and I need to return it (for whatever reason), I'm not going to be happy at all if the seller tries to get me to send it back to Amazon. Unless it FBA, then I suppose that might work. The problem is that is so hard to tell a FBA order from a under-the-radar dropshipper. *shrug*

There are some form of arbitrage that are perfectly fine with ebay. There are thousands of sellers who haunt their local B&Ms for overstocks, closeouts, loss leaders and the like. Plus if an item is just hot, hot, hot they get their hands on whatever they can snag at retail to resell at a profit.

[mam98031]

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@moo*cow*corner wrote:
---General Reply----
I don't have a huge problem with dropshipping. As long as I get what I ordered, on time, I'm good.

It's drop-returning that causes problems for me. If my purchase is dropshipped from Amazon, and I need to return it (for whatever reason), I'm not going to be happy at all if the seller tries to get me to send it back to Amazon. Unless it FBA, then I suppose that might work. The problem is that is so hard to tell a FBA order from a under-the-radar dropshipper. *shrug*

There are some form of arbitrage that are perfectly fine with ebay. There are thousands of sellers who haunt their local B&Ms for overstocks, closeouts, loss leaders and the like. Plus if an item is just hot, hot, hot they get their hands on whatever they can snag at retail to resell at a profit.

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I can only speak for myself.  My buyers have never complained or voiced a concern over my return process.  I have always made it as seamless for them as I can.  It is as smooth as a return can possibly be.

But I know what you mean.  I bought some plastic tumblers on Ebay, the seller shipped from Amazon.  The tumblers were damaged and I need to return them.  It was quite the ordeal and the seller did everything thing they could to prevent that return, but I did get them returned and refunded.

[gamersbaystore]

To put it plainly, yes, ebay hates drop shippers, and for good reason. They're often unreliable, as the seller has less control over how their goods are packaged and delivered. The other problem dropshipping creates is spam! The last thing ebay wants is 100,000 people selling the same toaster oven for a million different prices.

Then you have all these youtubers who rave about how lucrative dropshipping cheaply made foreign junk products is; when the fact is, anything a supplier can provide to you, they can also provide to anyone else. Those youtubers make videos simply for ad dollars, all the while lying to their audience about their fictitious ebay accounts and non-existent revenues.

This is why ebay has rules demanding you have "Unique Products" for sale.

Not to say that a lot of people don't dropship on ebay, I'm sure they do. Ebay just doesn't like it. Even if one did manage to get away with it for a while, it wouldn't last as eventually those suppliers will deliver everything late and ebay's response will be to close your account.

[mam98031]

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@gamersbaystore wrote:

To put it plainly, yes, ebay hates drop shippers, and for good reason. They're often unreliable, as the seller has less control over how their goods are packaged and delivered. The other problem dropshipping creates is spam! The last thing ebay wants is 100,000 people selling the same toaster oven for a million different prices.

Then you have all these youtubers who rave about how lucrative dropshipping cheaply made foreign junk products is; when the fact is, anything a supplier can provide to you, they can also provide to anyone else. Those youtubers make videos simply for ad dollars, all the while lying to their audience about their fictitious ebay accounts and non-existent revenues.

This is why ebay has rules demanding you have "Unique Products" for sale.

Not to say that a lot of people don't dropship on ebay, I'm sure they do. Ebay just doesn't like it. Even if one did manage to get away with it for a while, it wouldn't last as eventually those suppliers will deliver everything late and ebay's response will be to close your account.

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Hate is a strong word and if you are speaking for Ebay, then why isn't your icon showing you work for Ebay?

You are casting a blanket over all drop shippers that is no more true than trying to make a blanket statement on most any subject.    If Ebay hated dropshippers as you say they do, then there would not be any drop shippers on Ebay as they would not allow it.

I think you are making some assumptions based one how you may feel about drop shippers and not actually Ebay's position.  But if I'm wrong, please give us some supporting data to back up what you are saying Ebay's opinion is of some of its sellers.

[aspen_leaves]

This is so true! Nothing makes me madder than paying the high selling prices on eBay and getting a shipment from The Prime. I leave feedback referring to the every single time!

[aspen_leaves]

Yes, and once we all figure this out, we leave the eBay seller poor feedback for high prices ad shipping Prime and learn to buy on Amazon where the prices are cheaper. I fell for this twice. Now, if I find something I want here, I check Amazon first. Just did that and saved $20. Same seller, different place and no future poor feedback!

[mam98031]

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@aspen_leaves wrote:
This is so true! Nothing makes me madder than paying the high selling prices on eBay and getting a shipment from The Prime. I leave feedback referring to the every single time!

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What do you mean by Ebay high selling prices?  I ask because I sell on Ebay and Amazon.  My prices on Amazon are higher because their fees are higher than Ebay's.

While I've dealt with sellers that drop ship out of Amazon I have not found that I'm paying a higher prices.  Of course your experience may be different, but then if that is true, then why would you continue doing it?

It is NOT a scam or against the Ebay rules to ship from your own inventory that you store with Amazon.  You may not like it, but that doesn't make it wrong.

[slippinjimmy]

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@aspen_leaves wrote:
This is so true! Nothing makes me madder than paying the high selling prices on eBay and getting a shipment from The Prime. I leave feedback referring to the every single time!

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So you blame sellers and maybe also eBay because YOU didn't shop around and ended up paying more than you needed to?

This seems to be a consistent theme among those that complain about arbitrage type sales, it's not the dropshipping it's that you paid more.

That is bad BUYING not bad selling.

[lacemaker3]

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@moo*cow*corner wrote:
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There are some form of arbitrage that are perfectly fine with ebay. There are thousands of sellers who haunt their local B&Ms for overstocks, closeouts, loss leaders and the like. Plus if an item is just hot, hot, hot they get their hands on whatever they can snag at retail to resell at a profit.

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This isn't really arbitrage, if I'm understanding you correctly. Buying at a B&M and then reselling, is not buying & selling *simultaneously*, which is the key point with arbitrage. What you described, is buying (first) and then reselling (after). That is not considered arbitrage. Some people call it flipping, which is a better term if you want a specific term to describe this. I would consider this (flipping) difficult, but definitely not against policy because the item is in the seller's inventory when it is listed. The main risk is for the seller, not being able to get their money back when the item sells, especially if it doesn't sell right away.

Arbitrage is a word that comes from investing jargon, which has been co-opted by some sellers. Originally, it referred to buying and selling currency, or stock options, or something like that (not physical items) *at the same time* to take advantage of a price difference. Retail Arbitrage, as the {almost}-scammers do it, involves selling an item, and then purchasing one *at a lower price* and having it shipped to the buyer. They rarely even see the items, because they are usually shipped directly to the buyer, and technically they are buying the item after they have sold it (not *simultaneously*, or *at the same time*). This is against eBay policy as I quoted in an earlier post.