If you have spent any amount of time on the web looking for an eBay supplier, odds are you have seen the terms Drop Shipper and Wholesaler mentioned more times than you can possibly count, and there is a good chance these terms may have been used at the same time.

While many suppliers will lead you to believe that a Drop Shipper and A Wholesaler are one in the same, the methods actually vary greatly from one another.

What is a Drop Shipper:

A Drop Shipper is a company that maintains the inventory for any given product as well as handles the shipping of the item once the product sells. The way it works is you list an item from the drop shippers inventory on eBay and if the item sells, you must then go back to the drop shipper site to purchase the item at your cost, as well as notify the drop shipper of who the item is to be shipped to. The difference between what your item sold for, including shipping and handling, and what the item cost from the drop shipper, plus their cost for your shipping is your profit.

While this method allows you to sell a wide range of items, including large, bulky items, I personally found that it had its disadvantages as inventory changes so quickly that you run the risk of selling an item to a buyer that is no longer available from your drop shipper.

Also, it is advised that you mention in your listings that your items are drop shipped, but in my experience, very few buyers know exactly what this term means, which seems to scare people off from bidding on your item. You can always leave this information out, as I have noticed that most PowerSellers seem to do, which will not have a negative impact, unless the item proves to be unavailable.

I personally do not like this method as it puts your feedback score in the hands of a third party. You are putting your faith and trust in the fact that the item they ship is what is described, without being able to validate it for yourself. With most buyers being quick to leave negative feedback first and ask questions later, which can have a huge negative impact on the success of your business.

Wholesalers:

With this method, you locate a wholesale supplier that offers affordable rates on a lot, pallet or truckload of items you are interested in selling. You pay for the items and shipping charges and the items are sent directly to your door.

I actually prefer this method, as it actually gives me a chance to touch the items I am selling so I can note any defects found in my listing. The only disadvantage I find with this method is making sure you have enough room to store your inventory.

While a pallets worth of clothing may not sound like much, you may find yourself a bit overwhelmed when it comes to finding a home for all the items when they arrive at your door.

Also, many wholesalers only offer items by the pallet and most commonly by the truckload, which can be quite difficult for the eBay seller who is just starting out to find room for. While the potential for profit is huge, these larger loads also come with their own costs. Some sites offer smaller lots for a few hundred dollars, while others offer truckloads that can cost you tens of thousands of dollars which can be a daunting amount to fork over when you are just getting started.