How We Started an eBay Dropshipping Business with No Money

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Some of you may already be familiar with our background story and how we made millions in sales with our eBay dropshipping business.

Over the past few months, I’ve been much more involved in the customer service and had a chance to talk to more and more CrazyLister users. Because of that, I realized that many of you are new to selling on eBay.

Types of eBay dropshipping businesses

I would categorize the new eBay sellers into the following groups:

  • New sellers – Never sold nor bought anything on eBay before
  • Occasional sellers – Were used to buying on eBay and one day decided to sell some of your unused junk
  • Part-time sellers – saw that there’s a real opportunity to start a business and make at least a part-time living.
  • Entrepreneurs – Some simply have the “entrepreneurial bug” and this is not their first rodeo in starting a business, but they are new to eBay selling.
  • Established sellers – Some (not many) are established businesses with millions in turnover (already sell on a number of competing platforms, have physical stores etc.)

The thing about being new at anything is that you face a set of difficulties you’re not familiar with, and each of those can be enough to discourage you from moving forward. It can break you, make you quit…it’s nothing to be ashamed of.

At some point we almost abandoned selling on eBay despite being familiar with all the obstacles and overcoming most of them.

starting an ebay dropshipping business is hard, walt disney quote

starting an ebay dropshipping business is hard, walt disney quote

Why Share our struggles?

I decided to share our early days in our eBay dropshipping business in detail in this post. I hope that it will serve as some inspiration and help you move forward, despite all the obstacles, and despite the fact that starting a new business (or expanding it into new channels such as eBay) is HARD.

Even the great Mohammed Ali, who competed in one of the most demanding sports and is considered the best of all time in it, admitted how much he hated the routine of his job:

muhammad ali on working hard to succeed

muhammad ali on working hard to succeed

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How we started an eBay Dropshipping Business with ZERO cash

Victor and myself (Crazylister’s CEO and co-founder) had the entrepreneurial bug from an early age.
Like many people, we didn’t see our life goals come true by working 9-to-5, getting our monthly paycheck and helping some other folks make shitloads of money.
If they could do it, why couldn’t we?!

So, we had aspirations to start our own business, the only problem was that starting a business usually involves investing money into it upfront, so before you see the first dime of revenue, you’re already neck deep in debts.
In our first attempt at starting our own business, we poured in our life savings (it wasn’t much since we were about 20 at the time and had maybe $2000 in savings) and lost most of the money.

A few years later, as the internet evolved and new industries arose, we realized that there was a real opportunity to start a business without investing a lot of money upfront, and if it failed…the only thing we would have “lost” would be time.
When Victor came up with the idea to sell on eBay, I had absolutely no money. I was living with my parents and could barely afford an occasional beer at the pub (if you want to stop drinking, not having money is a good practice).
I was excited about the idea of an eBay dropshipping business but I had to be sure that we could do it with an initial capital investment of…well….$0 cash.

The basic idea of an eBay dropshipping business is the fact that it’s almost “free” to start. I put free in brackets because it’s still an immense time investment and you have to be ready to make this sort of sacrifice. There are always other alternative things to do with your time that may be more worth the money.

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The Actual 7 Steps we Took to start eBay dropshipping

So let’s take a deeper look at how we did it and how we saved money on processes we could have easily paid for by investing our time instead (and by being broke…):

#1: Setting up the eBay/PayPal accounts

Both platforms make it easy to setup an account by not charging anything, so that was pretty straight forward.
eBay does have their upsell options, like a store subscription, but as a new seller, I would avoid paying for a store subscription. There is nothing wrong with using individual listings to sell.
If you’re listing hundreds of items from the get go, then it’s worth considering a store to save on eBay seller fees, you can use eBay’s fee illustrator to understand when it’s most economical.

#2: Finding the best things to sell on eBay

One of the two most important tasks you will spend your time on. For some eBay sellers, finding the best things to sell on eBay is the holy grail (I personally think that finding reliable suppliers is more important).
Today, there are numerous softwares that can help you with this process, but they are all paid solutions.
Paid solutions existed 10 years ago too, but we didn’t have the money to pay for them, so, at first, we literally spent days manually going through thousands of eBay listings and looking for signs that a product was selling well.

Indicators for best things to sell
  1. How many products are there in a specific category – to understand the competition intensity.
  2. How many “GREEN” listings we see in the sold items section (a green listing meant that the item was sold, while a red listing was an unsold item, but today it’s just in black) – for each sold listing, we looked who the seller was to understand how many sellers were actually selling, or if there were a few sellers who ruled the market.
    completed listings on ebay that sold

    Completed listings in eBay, easy to discover what sells better

  3. Looking at products in a specific price range that would provide us a good profit margin – at first, we were looking for products that were sold for at least $40 to have a potential profit of $4-8 per product. Later we decided that we wanted a higher profit per product, so we looked for anything between $100-250 (recommend reading our detailed post about what to sell on eBay).

After a few weeks of hard manual work, we decided that a software would save us a lot of time so we hacked our way through this by finding a non-paid version of HammerTap. HammerTap was (still exists) a research tool that scanned eBay and helped us do all of the above automatically (discover products in niche categories, see how many sellers there were in each category, which products had less competition, products in specific price ranges and so on)
It was the Terapeak of the world, before Terapeak came along….and I loved it! I used to spend hours upon hours, digging through almost every category (I still spend many days on this, but I used to go through A LOT more items).

hammertap tool to discover ebay products to sell

hammertap tool to discover ebay products to sell

#3: Sourcing for dropship suppliers

This is the other most important task we spent a ridiculous amount of time on. I’ve written before how we sourced awesome suppliers and even dedicated a Youtube tutorial to finding reliable suppliers through eBay search.
As about finding products, there are paid solutions, but in the case of dropship suppliers, I tend not to trust all the paid solutions for obvious reasons.

Once we found the products we wanted to sell on eBay, we googled the product. Then, instead of looking at the first page results, we went straight to the results on page 3 and on.
Why the hell did we do it?! Aren’t the best results on the first page?!

Our mindset was the following: we were looking for the small-medium businesses who were hungry to grow their business and were more likely to cooperate with two young, inexperienced guys from the other side of the world.
These businesses often won’t show up in the first page results because they don’t have the money to pay for expensive SEO services or spend a lot on advertising to show on first page results.
AND IT WORKED! Yes, we spent many hours on this, but it was worth it (As Theodore Roosevelt said: “Nothing in the world is worth having or worth doing unless it means effort, pain, difficulty”)!

example of a dropship supplier site

example of a dropship supplier site we found

#4: International Communication

Since all our suppliers were located in different countries, we had to set up some communication methods that didn’t cost us money (international phone calls were super expensive 10 years ago!).
Luckily, VOIP (voice over IP) already existed, so we used services like Skype.
Today, there are TONS of popular solutions to speak with people on the other side of the world for free (Viber, Whatsapp, Google hangouts etc.) and every person that has some online business uses one of them.

#5: Office Space

Don’t spend money on an office before you know you have a real business and that you actually need to hire employees! For the first couple of years, we simply worked from home (yes sometimes even in underwear / pajamas).

As long as I had a chair, a desk and an internet connection, I was totally fine with working from home. Committing to an office, even for a 1-year contract, before you absolutely MUST is a waste of money. We only moved to an office when we had to take our first employee and, even then, he worked from my parents’ home for about a month.

You have to remember that an office bears quite a few additional expenses, such as insurance, bills (electricity, water, cleaning), safety measures (alarm, cameras..), property tax, etc.

#6: Setting up a legal entity

this is also one of those things you have to wait for a while until you go and spend money on it.

The first months of a new business are a time of great uncertainty. If you see that you’re still in business after 3-4 months and believe that you will be doing this on a bigger scale in the foreseeable future, then you should definitely setup a legal entity and handle the accounting by the book.

#7: Designing eBay listings

we couldn’t afford to pay graphic designers because they were very expensive (still are today…) so we taught ourselves some html instead (CrazyLister didn’t exist back then) and looked at tons of eBay listings from our competitors for inspiration.
We then implemented the best ideas in our own eBay listings.
It was a long process, during which we learned the ins and outs or, as we like to call it, “the art and science” behind the best practices of selling on eBay, and it helped us gain a very deep understanding of what elements persuade buyers to purchase, which led us creating the perfect eBay listing.
As you know by now, this later helped us win multiple eBay awards for excellence in sales and laid the seeds for what would later become Crazylister – the world’s leading solution for creating eBay templates easily and quickly, with over 100,000 users as of today.

Over to you – let’s do this!

For all the new eBay sellers – I hope this list will help you get started on your own eBay dropshipping business without spending money.
For those who are less new – I’m sure there are more ways to save money in the early days, I love reading your comments and replies, so I’d be more than happy if you shared some of your tips in the comments section below to enrich our community.

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