Drop Shipping is a process whereby a seller takes an order and payment from a customer for an item and then raises an order for that item with a supplier (the drop shipper), who delivers the item direct to the customer.

The seller retains the difference between the price he sold the item to the customer for and the price he paid to the drop shipper. The drop shipper can sell the item at a discount as the hard work to make the sale is done by the seller and they can sell in large volumes. The seller usually pays a membership fee to the drop shipper.

Many eBay sellers use drop shipping as they do not have to buy inventory up front that may not sell. If the auction ends without a bidder, they do not have the item left over. There is risk involved as the drop shipper may not have the item in stock and the seller will have a customer who will be expecting an item. The seller should also make sure that the drop shipper is reliable and trustworthy as any issues will reflect on them in the customer’s eyes.