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5 Reasons Why I Closed my eBay Dropshipping Store after 2 Years

24th August 2018 By martinos74 Leave a Comment

After almost exactly 2 years I finally closed my eBay dropshipping store last month so I thought it my be useful to share my thoughts on this sideline hustle and give you some of the reasons behind this closure.

How my Process Evolved over Time

I originally started by using the freelistings that eBay gave me to list my products with a 30 day auction. I added all of my products manually, so this meant that my overheads were really low. The problem with this was that it took a long time to add all of these products and also I had no tracking in place, which meant I often had orders that I couldn’t fulfil as they were out of stock or their prices had changed.

Most recently my process had changed completely so that I had my Philipino listers adding all of my products to my own branded store, which was integrated with SKUgrid tracking, which automatically updated prices and removed out of stock items. This meant that the amount of time I needed to invest was significantly less, but my monthly overheads were a lot higher.

This might sound like a good position to be in and the automated business model is what a lot of digitial entrepreneurs are seeking to achieve, but why wasn’t this working for me?

1 – Hassle

I think the number one reason for me was the amount of hassle I got from different orders. Remember, any time you get to deal with the general public, they are generally going to be a royal pain in the arse. Even if I wasn’t touching the products at all, this was still certainly the case with eBay dropshipping.

Returns

One of the biggest risks with this business model was returns, because the buyers are so protected by eBay and Paypal, that they can return pretty much anything and you will need to accept it. The problem is that as an intermediary, it won’t be as easy for you to return a product to your supplier as it is for an eBay customer to return it to you, which leaves you completely exposed.

This is particularly the case for any overseas Global Shipping Programme orders that you do. Lets take a recent example I had where a customer bought a cat flap with a magnetic chip detector and this was sent to Hong Kong. They reported that the item didn’t work correctly, so I had to facilitate a return for them. My supplier wouldn’t pay the cost of the return from Hong Kong, so I had to pay this myself.

Always On

Another major drawback with this business model, is that you are tied to your computer if you want to take this seriously. This means that at least once per day you will need to check into your eBay account to process orders, deal with customer service issues and generally check what’s going on. This will be fine for a lot of people but if you’re looking for a more passive stream of income where you can travel the world as well, this is a big drawback.

2 – Mistakes

In my store I had nearly 5000 products in the end, most of which were listed by other people manually, so there are always going to be mistakes and sometimes these mistakes can be costly.

The biggest example of this for me happened about a couple of months ago, where I listed a fish tank filter. One day I woke up and found that I had sold over 30 of these. These orders had been integrated with SKUgrid so the pricing should have been correct but I checked the orders and everything looked fine. I then sent out a total of about 50 of these orders over the weekend, and finally realised why everyone was buying them…..

My original listing was for a filter which costs about £199, however, at my supplier this had sold out, so my software automatically took the price of one of it’s variations, which was the replacement filter pads, and priced these at £19.99… Unfortunately, all of my buyers thought they were getting the £199 filtration system for a bargain price and consequently meant that I had a major returns and customer service nightmare on my hands.

The next 2 weeks were absolutely terrible as I had to negotiate 50 returns with my supplier and all of the customers, and try not to get bad feedback at the same time!!! Amazingly, I only got about 4 negative feedbacks in the end and also received some really positive feedback as well, but this took a lot of work and also lost me a fair bit of money as well.

3 – Return on Investment

The other key reason for me giving this up was it just wasn’t giving me a good enough return for the amount of time that I was spending on it.

Even though I really limited how much time I was spending on it each month, the overall fees that I was being charged made it very difficult for me to make a big profit.

At a minimum each month I was paying £89 for an eBay shop, and extra 9p for every listing created over my 1500 free listings and £19.99 for the SKUgrid software, and my listers were being paid 20c for every listing they created.

On top of this every sale you made eBay would take 13% and Paypal would take between 3 – 4%.

This meant that for most of my products, I would only make a 10% margin and would need to sell around £2000 worth of products before I even broke even. I also need to add a 40% tax rate on top of this, making this pretty much unviable.

I had thought about expanding this more and using more automated software to list products, but the main issue with this is that as a UK seller if you sell more than £80k worth of products you then need to become VAT registered and pay an additional wedge of tax.

As I’m now a freelance Project Manager I think this would have also applied to my contract income as well, which would be a massive no-go!!!

4 – eBay Fraud

The final hammer for me that made me think “Sod this for a game of soldiers”, was when I almost lost £1500 on a single transaction.

Over the past 6 months, I had over 30 occasions where buyers had bought high value products (£500+) from me, and then I found out either from eBay, from the buyer contacting me or from me contacting the buyer, that they had their eBay account hacked and these were not valid transactions.

This was extremely frustrating because when I had real orders for high value products, I had to contact the account owners to validate they had really ordered the product, which caused a delay in me dispatching the products and in a few cases led to me getting bad feedback.

Worst of all was the case where someone purchased a coffee machine from me for £1500. I bought this from my supplier for just over £1k and sent it to the address that was provided on the Paypal payment receipt.

The order was dispatched successfully and signed for from my suppliers courier. A few weeks later I received a Paypal dispute case opened up against me, saying that the buyer’s account had been hacked and they had not received the product.

I sent in the proof of delivery to both eBay and Paypal and had to wait 70 days, before I got a message from Paypal saying that the case had been closed in favour of the buyer!!!

I couldn’t believe this and contacted Paypal, showing that I clearly had proof of delivery, but they told me this had been decided by the buyers bank, so there was little they could do but dispute the claim. To be honest I really thought I’d lost this money as I was stuck between eBay, Paypal and a bank, none of whom was likely to take any responsibility for this.

I disputed the case and amazingly a month later this was closed in my favour and my money was returned to me.

This had been quite stressful and to be quite honest, I really couldn’t be arsed with this anymore.

5 – SKUGrid Customer Service

The final nail in the coffin for my eBay store came a few days later when I realised that SKUgrid was automatically changing the listings for 2 of my suppliers (Over 1000 listings) to be out of stock.

I contacted SKUgrid who told me there had been an issue with the feed, and they had no idea when this would be resolved so I would have to update my listings manually until that time!!!

As you can imagine this raised my blood pressure even further and I didn’t want to risk either a heart attack or throwing my computer out of the window so just decided to close my store instead!!!

Any Regrets?

I have a lot on my plate already with affiliate websites, Merch by Amazon and my Low Hanging System mugs, that I can honestly say I don’t miss this extra hassle.

It was a shame that I’d built up so many listings and had good feedback on my account, but it always felt a little bit that I was only a second away from disaster.

Most of the time I interacted with customers or opened my emails it would be something negative, and this can be mentally tiring.

Would I Do the Same Thing Again?

I still think that eBay dropshipping is a great way to get into making money online and for very little up front costs, you can earn your first digital dollars. This is an amazing feeling and will surely lead you on to bigger and better things.

I’ve also learned a tonne about the types of products that sell well, how to market products, retail arbitrage and using eBay in general, so for this alone it has been completely worth it.

How Much Money Did I Make in 2 Years eBay Dropshipping?

This was definitely no goldmine, and it also took a lot of work, love and attention to set up and run, but over the course of 2 years I probably made about £5-6k after tax.

If this was your only focus online, I still think that you could build this up to be a proper business, but you would need to spend a lot more time on it.

Realistically, I’d recommend following someone like Jonathan Lieu who now uses Hydralister to list all of his products and fully focuses on eBay dropshipping. If you are constantly testing different products, then sooner or later you’ll have a good set of products and suppliers that you can rely on and build up your business from, however, I think I’ve got other fish to fry at the moment, that hopefully won’t be as stressful!

February Stress : The Stress of Starting an Online Business

1st March 2017 By martinos74 Leave a Comment

February told me that building up a business on your own can be an extremely stressful thing to do!

You might think that being able to work on your own, in your own time, from wherever you want would be the dream lifestyle, however, there are always downsides, which can have many faces:

SELF DOUBT

Of course there are plenty of case studies out there of people earning heaps of money from online work, successful blogs, dropshipping empires and various ways to make money, but the truth is, unless they were really lucky, they’ve actually put a lot of work into it…. there really is no golden ticket!

When things aren’t going as smoothly as you’d like then you start to think whether you’re doing the right thing. You’ll probably find that most people who you know won’t really understand what you are doing so you can only turn to your digital friends and experiences from others.

The important thing to do is to keep going until you’ve really exhausted all avenues.

Join a mastermind group for support, reach out to Facebook groups and online communities and you’ll generally find a helping hand to point you in the right direction and give you the encouragement you need.

KNOCK BACKS

I was intending to go down to a 4 day week this year, however, my lovely bosses have told me I can’t do this just yet.

Whilst I kind of understand as it’s a busy time at the moment, there will always be some kind of reason not to do this, so it’s really infuriating and that extra day to focus on my business would really be beneficial.

Again, don’t let these things beat you and try to find a way around obstacles instead of blocking you.

For example, this refusal has meant that I am now forcing myself to take an hour’s lunch break to work on my projects, and am not doing any extra hours than needed at work, which frees up some more of my time!

Mistakes

Yes, we all make mistakes in one shape or another and personally when this happens it really pisses me off, makes me feel stupid and also rather angry!

However, a change of mindset is the best thing that is needed here. Give yourself a break and remember that you’re never going to get things right at the first attempt.

What you are actually doing is learning through your mistakes and learning on the job, rather than having someone to give you a guided education.

Making mistakes is actually one of the best things that you can do – as long as you learn from them and implement changes to stop the same mistake happening again.

Overwhelmed

Ever feel like the whole world is on your shoulders and you’re just surrounded by a multitude of problems all fighting for your attention? Well, you won’t be alone.

The more stressed you get, the more all of the little problems decide to jump out and have a surprise party in your head, until there’s just so much going on that your poor little brain can’t cope any more.

In these situations, if you’re in front of your computer then just walk away.

Get outside in the fresh air. Go for a run. Even better stop work altogether for a day or go away for the weekend and come back refreshed.

You’ll find that with a fresh pair of eyes and clearer mindset, how, miraculously, all of those problems that you thought you had, aren’t actually that bad.

The key is trying to keep a level head and tackle those problems one by one so that the whole situation becomes manageable again.

February’s eBAY Focus

This month I paid special attention to building out my eBay store further and completed the following things:

Opened an eBay store
Added a theme to my eBay store
Started using Hydralister to list items
Changed my listings to GTC from 30 day listings
Worked with my Bangladeshi freelancer to increase the listings in my store to over 650

So, what was the net result of all of these efforts?

My sales have plummeted to next to nothing. This is really worrying as I was expecting to be able to organically grow my sales based on the number of listings that I have created.

However, I’m not going to panic yet and put this down to a few reasons:

Jan/Feb is always a slow time for online sales
I added a large number of one type of product to the store, which doesn’t look like a good choice
I added too many high price items to my store. Ideally I think I should only list items between £30 – £100
My Bangladeshi assistant’s listing were particularly poorly formatted
Changing from 30 day to GTC listings may have an initial downturn on results

My plan is to go back to basics in March and focus on creating quality listings instead of quantity. I’m currently looking for a new experienced eBay lister on Upwork and when I find the right person I’ll get them to add a maximum of 10 listings a day so I can check them, provide feedback and have full control on what is happening…. Onwards and Upwards!

eToro SUCKS

The other thing I did this month is close down my eToro account. After a year of having the account open, they decided to take away my £1000 joining bonus (which can’t be withdrawn until you do a certain amount of trades).

I think over the year I’ve actually lost a small amount of money in my eToro account and the thing that irritates me the most is that the % gains that they report for the traders on the platform are usually different to the actual returns that you get back if you start to follow a trader.

Their support told me it is because if a trader adds or removes funds to their account, then this isn’t automatically replicated in your copy trading account, which skews the figures.

To be honest, I didn’t spend too much time looking at this recently and a lot of it was over and above my knowledge level that it felt a little bit like a gamble, so I closed my account.

Maybe if you know what you’re doing then you could make some money from it, but it just felt too much like guesswork to me.

March On

So, March is here, the Cheltenham Festival is just around the corner, spring is coming and hopefully we’ve almost seen the back of winter, so there’s plenty to look forward to!

I’m going to keep faith with the eBay dropshipping technique, will start to build out one of my niche site’s content soon and I’ve just bought some training materials to get into Betfair Sportstrading, which will hopefully be a further future income stream that I can tap into!

However, remember…. Beware the Ides of March!

January Update

28th January 2017 By martinos74 2 Comments

It’s been a busy few weeks with the festive season and lots of things to focus on so I wanted to give a bit of an update on where I’ve got to with my plans to become a digital nomad and develop passive income streams.

I’ve got so many projects ongoing at the moment that it’s really hard to focus on one thing and dedicate the time that I need to these projects so I’ve decided to focus on one main thing in the short term, and put my other projects on hold for the moment.

The idea that I want to dedicate more of my time to moving forward is:

eBay Dropshipping

If you’re not sure what this then you can read all about it in this article that I wrote recently or you can go and check out David Wu’s course on Udemy

Over the last couple of months I’ve made the following progress:

– Built out my store to have 500+ products listed

– Switched to a business account and set up an actual eBay store

– Hired an experienced eBay lister on Upwork

– Added my products to SKUgrid.com (an automatic price/stock tracker)

– Investigated the use of Hydraliser (an semi-automated eBay listing tool)

The great thing about this business model is the more products that I add to the store, the more profits I make and when you get to a certain threshold you can hand this over to a VA to fully automate the process. I completed David Vu’s VA Training course, which shows you the easy steps to do this.

To be honest the guy that I have found in Bangladesh can list lots of products really quickly, but his attention to detail is terrible and he isn’t very good at optimisation of titles. Still, at 30c per product listing I shouldn’t expect too much.

My store has been going for 6 months now and have 100% feedback with over 100 items now. I haven’t tracked my earnings that well but I think I’ve probably made about £1000 so far over these 6 months.

My plan now, is to really build out the store as much as possible. I will probably upgrade the store to the next level so that listings only cost me 4p in eBay fees.

I’m going to give Hydralister a try out and then expand my store to 1500 items fairly quickly and then have a bit of a pause to gauge how much additional work this will cause me ie customer enquiries, returns etc.

I’m only making about 15% of the sale price on each item, however, if you are selling 10 items a day, that quickly adds up to a decent side income, and definitely something that could sustain you whilst travelling.

Niche Websites

Trying to build out 3 websites (including this one) is just unfeasible from a time perspective. I’m going to keep this one going, but I’m going to leave the other Service based website alone for a while. It’s only got 10 articles on the site, and I have a great plan how I can build this out in the future, but for now I’m leaving it well alone.

The other website that I bought from Human Proof Designs is now live. To be honest they’ve done a good job of setting up the base level content and site, however, there is a lot of work to do to get it up to the standard that I would like. Again, I’ve developed a great content plan for this site, and can’t wait to get building it out in the future. I think for this site in the Sports Niche, I may even try to automate the whole content creation process in the future and use it as a test site.

For www.mylifestyledream.com I have lots of ideas for content again, but I’m just struggling for time. I’ve added some affiliate links for Oddsmonkey, which are bringing in a few bucks each month, but nothing huge at the moment. In the long term matched betting and betting related products look like something worth promoting and fit well with my blog at the moment.

Matched Betting

I’m still regularly matched betting, which continues to bring in a decent side income and the best thing about this is that all earnings are tax free!!!

My latest favourite thing to do is place No Lay Accumulators. This is a technique where the Oddsmonkey software finds matches for you that have a good chance of coming in. The theory is that you don’t need to lay these bets, and over a longer period of time you will profit from these accumulators.

Over the past 3 months I’ve placed over 65 Accas, and have made £850 from this. Well, it seems to be working at the moment and as it only takes a couple of minutes per Acca, so this is a great use of time.

On top of this I managed to get a payout of £200 from an extra place race where I dutched the whole field using this technique

Through the Oddsmonkey forum I’ve also found a unique way to ensure that you can extract a minimum of 80% (ADD LINK) from each bet using doubles and triples.

On the downside I finally lost my Bet365 account and even worse, they stake restricted me, which means I can’t even use the Eachway matcher on this account any more!!! I think it was because on one Saturday I placed bets on every race of their Channel 4/1 offer, and ended up winning a couple of races.

I’m itching to start learning about Betfair trading as another potential revenue stream that doesn’t rely on having accounts with the scumbag bookies, but am putting this on the backburner again as this requires a huge amount of time to get your head into.

If you’re not sure exactly what matched betting is about then you’ll find most of the answers in my Guide for Beginners

The 4 Day Working Week is here

So, you’re probably bored of me bleating on about not having enough time, so I’ve decided to do something about this and have requested that I go down to a 4 day working week, so I can focus on setting up these other revenue streams and start to build my business up with more gusto.

Upsizing

The final change that I’ve decided to do is to sell my flat and try to upsize. Now, according to all the advice in the best seller ‘Rich Dad, Poor Dad’, a property is a liability and not an asset as it is constantly costing you money.

However, in this case I slightly disagree. My plan is to upscale to a 2 bedroom flat and take on a bigger mortgage in this period of ridiculously low interest rates, which I will lock in for 5 – 10 years. I plan to be travelling for 3 – 6 months of every year and whilst I am away will be renting out my property. The bigger the place, the bigger the mortgage I need, but the bigger the rental income and profit I will be making, which in my mind, makes this an asset as well!

So, exciting times are ahead, and I’m hoping this extra time is really going to set me on my way and accelerate the growth of these businesses over the next few months, so I can finally quit my job in September and head off into the sunshine!!!

Anyway, enough about me, what about you? If you’ve been killing it online recently, or are having issues getting started then we’d be keen to here from you in the comments below. What are you doing to make money online in 2017?