Is dropshipping allowed on eBay?

Yes, BUT only if you fulfill orders directly from a wholesale supplier. Dropshipping from another retailer (like Amazon or Walmart) is explicitly banned and will get your account flagged.

What are eBay's selling fees?

For most categories, eBay charges a Final Value Fee of 13.25% on the total sale amount (including tax and shipping) plus $0.30 per order.

Why do eBay dropshippers lose money?

Most fail because of returns. If you have a 10% margin and a 10% return rate, you are losing money because you still pay for shipping and often cannot return the item to your supplier.

Is eBay Dropshipping Dead in 2025? Profitability Guide

Ten years ago, eBay dropshipping was the "Wild West." You could copy a listing from Amazon, paste it onto eBay for $5 more, and make effortless money.

In 2025, that strategy is a fast track to getting banned.

Does that mean eBay dropshipping is dead? No. But it has evolved from a "lazy hustle" into a serious logistics business.

In this guide, we will analyze the updated fee structures, the strict "Retail Arbitrage" policies, and the only sustainable way to build a profitable eBay business today.

The Policy Shift: What Gets You Banned

Before we talk about profit, we must talk about survival. eBay explicitly updated their dropshipping policy.

Strictly Prohibited: "Drop shipping, where you fulfill orders directly from a wholesale supplier, is allowed. However, listing an item on eBay and then purchasing the item from another retailer or marketplace that ships directly to your customer is not allowed."

Translation:

Allowed: Buying from AliExpress, CJ Dropshipping, or a wholesale distributor.
Banned (Retail Arbitrage): Buying from Amazon Prime, Walmart.com, or Home Depot and shipping to the customer.

If you do the banned method, eBay will "flag" your account. Your listings will be hidden from search results (Shadowban), and your sales will drop to zero overnight.

The Math: Fees vs. Thin Margins

The biggest killer of eBay dropshipping isn't policy—it's math. eBay has one of the highest fee structures in e-commerce.

1. Final Value Fee (FVF)

eBay takes 13.25% of the total sale amount for most categories.
Crucial Detail: This percentage applies to the Price + Shipping + Sales Tax.

Example:
Item Price: $20.00
Sales Tax (paid by buyer): $2.00
Total: $22.00
eBay Fee: 13.25% of $22.00 = $2.92 (Not $2.65!)

2. Insertion & Order Fees

You pay $0.30 per order fixed fee. Plus, insertion fees if you list more than 250 items a month.

3. Promoted Listings (The New Necessity)

Because eBay is flooded with dropshippers, organic visibility is low. To get sales, you often need to use "Promoted Listings Standard," paying an extra 2% to 10% ad fee.

The Profit Calculation

Let's see if a typical dropshipping product makes money.

Line Item	Amount
Selling Price	$30.00
Product Cost (COGS)	-$18.00
eBay Fees (13.25% + $0.30)	-$4.28
Promoted Ad (5%)	-$1.50
Net Profit	$6.22 (20% Margin)

$6.22 looks okay. But wait—what happens if the customer returns it?

You lose the outbound shipping ($5) and the return shipping ($5). Total loss: $10.
It takes two profitable sales just to pay for one return.

The "Item Not Received" (INR) Risk

This is unique to dropshipping from China.

eBay buyers expect Amazon-speed shipping. If you ship from AliExpress and it takes 3 weeks:

The buyer opens an "Item Not Received" case.
eBay forces you to refund them.
The item arrives at their house 3 days later.
The buyer keeps the item AND the money.

This happens constantly. It is the #1 reason dropshippers quit.

How to Succeed: The High-Ticket Strategy

The "sell cheap junk" model is dead. The profit per unit ($2-$5) is too low to cover the risks.

The winners in 2025 are selling High-Ticket Items ($200+).

Example: Car Parts, Industrial Equipment, Furniture.
Math: Sell for $300. Buy for $200. Profit $50 after fees.

When you make $50 per sale, you can afford to pay for faster shipping. You can afford to handle a return. The margin of safety is higher.

Sourcing: The "Home Wholesaler" Approach

Instead of AliExpress, successful sellers use Domestic Wholesale Suppliers.

Find a US/UK based supplier of a niche product (e.g., "Solar Pool Heaters").
Open a wholesale account.
List their catalog on eBay.
When it sells, the supplier ships from the US warehouse in 2-3 days.

This complies with eBay's policy (it is wholesale) and keeps customers happy (fast shipping).

FAQ

Can I use software like AutoDS?

Yes, automation helps with stock monitoring. However, be careful with "Auto-Ordering" from Amazon. eBay tracks tracking numbers. If you upload a tracking number that starts with "TBA" (Amazon Logistics), you will be flagged instantly.

Is it better to have an eBay Store subscription?

If you sell more than 50 items a month, yes. The subscription ($21.95/mo) lowers your Final Value Fees in many categories (e.g., from 13.25% to 12.35%). That 1% savings adds up fast.

What categories are best for dropshipping?

Avoid Electronics (too many scams/returns) and Clothing (sizing issues). Look for "Boring" categories: Business & Industrial, Home & Garden, and Auto Parts.

Conclusion

eBay dropshipping is not a "Get Rich Quick" scheme anymore. It is a grind of fee optimization and supplier management.

If you attempt the lazy "Amazon to eBay" arbitrage, you will fail. But if you build relationships with domestic wholesalers and focus on high-ticket items, eBay offers a massive audience of buyers who are ready to spend.

Action Step: Open the calculator. Input a $50 selling price. Toggle the "eBay" platform. See exactly how much that 13.25% fee hurts your bottom line before you list a single item.

Is Dropshipping on eBay Still Profitable? A Real Breakdown for 2025