Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Wed Feb 22 2012 23:02:07

eBay Sellers Use Amazon Prime to Drop Ship in Retail Arbitrage

By: Ina Steiner

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How do you run an ecommerce business with no inventory and zero shipping costs? Try retail arbitrage.

Thursday's EcommerceBytes Newflash explains how some sellers are going beyond drop-shipping to piggy-back onto Amazon's Prime shipping program. When orders come in on eBay, sellers order the items on Amazon and use their Prime account to send it as a "gift" to the eBay buyer, thereby paying no shipping fees. And by offering free, fast shipping on eBay, they earn high marks on shipping DSRs.

This poses a problem for their competitors who choose not to violate Prime's terms and conditions, however, since it's tough to compete with sellers who are offering free 2-day shipping at zero cost.

It's interesting to note that at one point, there was a chronic problem on eBay in which some sellers offered low selling prices and high shipping and handling costs. To discourage the practice, eBay put caps on shipping costs in certain categories and now charges a commission fee on the total selling price, including S&H.

These days, eBay is pressuring sellers not simply to bring their S&H costs into alignment, but it is nearly forcing sellers to offer free, fast shipping. In that environment, it's not surprising sellers are looking for ways to do that without breaking the bank.

According to Chris Green of FBAPower, using Amazon.com as a drop-shipper is not unusual. And Amazon encourages sellers to use its multi-channel fulfillment service.

But when it comes to drop-shipping using Prime to subsidize shipping, it's hard to know how eBay and Amazon really feel about the practice. But it's pretty obvious how traditional eBay sellers must feel. One eBay seller who wrote me about the issue said these sellers probably have the process fully automated with software, and said they likely "sit in their recliners all day watching the money roll in."




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Perminate Link for eBay Sellers Use Amazon Prime to Drop Ship in Retail Arbitrage   eBay Sellers Use Amazon Prime to Drop Ship in Retail Arbitrage

This user has validated their user name. by: Philip Cohen
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Wed Feb 22 23:41:06 2012

But, what a shame they still have to pay eBay a FVF.

Still, maybe they can find a way around that too as they should at least be able to do any return business with those buyers directly via Amazon.

Won’t that make eBay’s chief headless turkey happy …

eBay / PayPal / Donahoe: Dead Men Walking

Perminate Link for eBay Sellers Use Amazon Prime to Drop Ship in Retail Arbitrage   eBay Sellers Use Amazon Prime to Drop Ship in Retail Arbitrage

by: Ebay's Slow Death This user has validated their user name.

Thu Feb 23 03:03:06 2012


So Ebay has finally become Amazon!

Yup! That should really make Donahoe happy!

Perminate Link for eBay Sellers Use Amazon Prime to Drop Ship in Retail Arbitrage   eBay Sellers Use Amazon Prime to Drop Ship in Retail Arbitrage

This user has validated their user name. by: Pete

Thu Feb 23 12:15:33 2012

This is so short-sighted on eBay's part. Think about it. I'm a buyer on eBay, I order from this loser and two days later I receive an Amazon package with my DVD. Human nature tells me to go and check the price on Amazon, and when I find out that I could have bought the very same item 25% cheaper there, why would I trust an eBay seller again?

Nice job eBay. That's really going to encourage return business.

Perminate Link for eBay Sellers Use Amazon Prime to Drop Ship in Retail Arbitrage   eBay Sellers Use Amazon Prime to Drop Ship in Retail Arbitrage

by: Tired of eBay's Bullsh*t This user has validated their user name.

Thu Feb 23 14:24:58 2012

BOTH eBay and Amazon DID THIS TO THEMSELVES (in the race to the bottom, the bottom being "free" shipping).

Serves 'em right, both of them.

In business, Might Makes Right. Amazon can negotiate much lower shipping cost with UPS etc than can a small seller. And eBay pushes around its sellers with it fetish for free shipping.

But, of course, shipping is never free.

And, I for one am happy to see both these behemoths (well, if not fall on their petard) at least suffer a minor bruise.

- Tired of eBay's Bullsh*t

Perminate Link for eBay Sellers Use Amazon Prime to Drop Ship in Retail Arbitrage   eBay Sellers Use Amazon Prime to Drop Ship in Retail Arbitrage

by: evilldave This user has validated their user name.

Thu Feb 23 16:25:26 2012

Been shipping some amazon orders for ebay customers for years, it works when amazon is less expensive than your local inventory.
Everyone wins in this scenario. Amazon gets more free advertising, Amazon makes a profit on the sale,  ebay customer gets the product quickly, ebay seller satisfies his customer, and gets points for using his credit card to purchase.
Amazon does discourage the practice, as they are losing a few points on the free 2-day shipping.
Neither amazon or ebay should complain, as it is free market capitalism. As long as the seller is on top of the stock and availability, everyone should be happy here.

Perminate Link for eBay Sellers Use Amazon Prime to Drop Ship in Retail Arbitrage   eBay Sellers Use Amazon Prime to Drop Ship in Retail Arbitrage

by: Tired of eBay's Bullsh*t This user has validated their user name.

Thu Feb 23 16:45:23 2012

@ evilldave, everyone should be happy here.

Well, more power to you!

But, I don't think eBay all that happy with branding loss.

And, Amazon probably loses a little on each Prime shipment, but likely calculates its $80/year fee to cover that AVERAGE consumer loss. Of course, if you use Prime as a commercial, drop shipping 1000's per year, that likely blows Amazon's calculation of Prime.

Then again ... you could be right, since both eBay and Amazon make money on your sales.

NEXT UP, maybe eBay wil get into the selling biz, after all, since there is no inventory or seller-risk, or fulfillment etc ... why not eBay just kill off all those annoying complaining folks (its sellers), and just convert eBay into one giant drop-shipper, piggybacked off of Amazon.

So glad I sell much harder to stock and ship antiques...

- Tired of eBay's Bullsh*t

Perminate Link for eBay Sellers Use Amazon Prime to Drop Ship in Retail Arbitrage   eBay Sellers Use Amazon Prime to Drop Ship in Retail Arbitrage

by: tb This user has validated their user name.

Fri Feb 24 01:19:10 2012

Wow, what an interesting trick! Still, if I were an EBay buyer and got an order with Amazon packaging and an Amazon packing slip, I'd be pissed. I'm surprised buyers are not trashing the sellers DSRs.

Perminate Link for eBay Sellers Use Amazon Prime to Drop Ship in Retail Arbitrage   eBay Sellers Use Amazon Prime to Drop Ship in Retail Arbitrage

by: tb This user has validated their user name.

Fri Feb 24 01:24:00 2012

Another thing that just occurred to me. As someone that sells on Amazon, E-Bay, I use those two sites to try and get future orders on my own e-commerce site. It's incredibly difficult to do. I could GLUE a giant piece of paper on the product that says "IF YOU BOUGHT THIS AT OUR SITE, IT WOULD HAVE BEEN 20% CHEAPER", and still they continue to repeat on Ebazon. The point is that I wonder how many people would even notice their item came in an Amazon box. Buyers are dumb.

Perminate Link for eBay Sellers Use Amazon Prime to Drop Ship in Retail Arbitrage   eBay Sellers Use Amazon Prime to Drop Ship in Retail Arbitrage

by: 2l82w8 This user has validated their user name.

Fri Feb 24 02:55:17 2012

For me, the saddest thing about this article has nothing to do with eBay or Amazon.  Read the comments.  See what's missing.  Almost no one is noting that this practice is ETHICALLY WRONG.  It doesn't matter if it works or not.  

When you signed up for Amazon Prime, you agreed NOT to do this (by accepting their Terms of Service).  Breaking your word is just WRONG ~ whether you give it to Amazon or to your next door neighbor.  And if that's not enough for you, then your problems are far bigger than eBay's practices or Amazon's leverage.  

Come on, folks.  Even in this day, right and wrong still matter.  And they matter far more than some drop-shipping scheme.

Perminate Link for eBay Sellers Use Amazon Prime to Drop Ship in Retail Arbitrage   eBay Sellers Use Amazon Prime to Drop Ship in Retail Arbitrage

This user has validated their user name. by: Philip Cohen

Fri Feb 24 02:56:21 2012

Then there is the strange situation where I recently bought a DVD from Moviemars via eBay, and the same DVD was actually more expensive from Moviemars' own website ...

Perminate Link for eBay Sellers Use Amazon Prime to Drop Ship in Retail Arbitrage   eBay Sellers Use Amazon Prime to Drop Ship in Retail Arbitrage

by: Tiffee Jasso This user has validated their user name.

Fri Feb 24 07:25:33 2012

This is very interesting. If Amazon is shipping Ebay orders and taking the credit for themselves, than Amazon's sales' numbers are grossly inflated and Ebay's sales numbers are grossly reduced. For as you state the OP sale's were in the thousands for just one month and that is only one seller. I love it that Free Shipping is costing both Amazon and Ebay dollars. I have always wondered who was donating Free Shipping for the big sellers. Now we know.  

Perminate Link for eBay Sellers Use Amazon Prime to Drop Ship in Retail Arbitrage   eBay Sellers Use Amazon Prime to Drop Ship in Retail Arbitrage

by: judyoz This user has validated their user name.
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Sun Feb 26 19:29:57 2012

I'm surprised that this is a new idea for some people.

UK & Australian dropshippers have been using this method of retail arbitrage on eBayAU for years using the Book Depository as their 'supplier'. Don't they do that in the US also?

I don't think it's right, and of course once a customer gets one parcel from the Book Depository with the invoice showing the real purchase price, they won't be buying via eBay in future.  

Perminate Link for eBay Sellers Use Amazon Prime to Drop Ship in Retail Arbitrage   eBay Sellers Use Amazon Prime to Drop Ship in Retail Arbitrage

by: roberts204 This user has validated their user name.

Thu Mar 8 10:55:32 2012

In addition, when Amazon ships the order the ebay seller purchased on Amazon, the packing slip will contain Amazon return instructions.  If the recipient returns the item as per the instructions in the box, it is the seller that will be credited, not the recipient, and it be a awhile, if at all until the seller realizes it was returned, and that he has to refund the original buyer.

Perminate Link for eBay Sellers Use Amazon Prime to Drop Ship in Retail Arbitrage   eBay Sellers Use Amazon Prime to Drop Ship in Retail Arbitrage

by: seewhatimselling This user has validated their user name.

Tue Mar 20 11:28:46 2012

Somehow, this seems a little 'underhanded' to me. I understand the reasoning- as far as the seller goes, to buy low on Amazon and resell high on Ebay- Naturally, profit is the name of the game.

I'm not really 'sure' how this can work when using calculated 'shipping' on an item, being drop-shipped from Amazon, since it is the Ebayer's address (not the Amazon seller's) that is being used to 'calculate' the shipping cost?

Another problem I can see arising from this practice...would be the shock to the buyer- when they see that the Ebay item they purchased- from a buyer in Indiana- arrives from an AMAZON seller in California? There's a wave of deception there.

Also- there is the fact that some buyers (for whatever reason) are NOT happy with Amazon- and refuse to shop that site- preferring Ebay...what must they think when they realize they DID, unknowingly, purchase from Amazon?

I think this would be a bit more above-board, if the Ebay seller just out-and-out MADE their purchase from Amazon (having it shipped to their own home) and THEN proceeds to sell the item on Ebay.

I know if I purchase something from an Ebay seller- and it comes to me from a different state- and different seller than who I purchased it from- it's going to be returned....  

Perminate Link for eBay Sellers Use Amazon Prime to Drop Ship in Retail Arbitrage   eBay Sellers Use Amazon Prime to Drop Ship in Retail Arbitrage

by: RealFreeMarket This user has validated their user name.

Mon Feb 4 00:11:29 2013

"This is so short-sighted on eBay's part. Think about it. I'm a buyer on eBay, I order from this loser and two days later I receive an Amazon package with my DVD. Human nature tells me to go and check the price on Amazon, and when I find out that I could have bought the very same item 25% cheaper there, why would I trust an eBay seller again?

Nice job eBay. That's really going to encourage return business."

Why would you be angry at the seller because YOU didn't due your due diligence and check the price on Amazon first. This is ingenuity. It's not like there is no work to it. You have to stay on top of price changes, product availability, order processing and communicating with buyers.

People are looking for ways to put food in their children's   stomach's in an economy with nearly 20% unemployment and barley any jobs being created. If anyone has a problem with this model, maybe you should move to a communist country where every facet of life is dictated.

The bottom line is that Amazon and eBay are both making tens of millions of dollars from this model and they should do more to help those employing the method.

I find it ironic that people worry about someone making $3 to $8 profit per sales from this model yet say nay a word about the hundreds of trillions worth of fraud bankers perpetrated worldwide through derivatives and dumped on American tax payers and if you think I'm exaggerating, why don't you go to Google and type in the search box "Bank of America Dumps $75 Trillion In Derivatives On Taxpayers" and that is just one institution out of around 10 that have each done so.

You don't have a problem when your 401k manager buys a stock for $8 and sells it for $20 do you? In fact you'd be pissed if he bought low and sold for lower than he bought it now wouldn't you?

Bottom line is this, don't get  upset at someone who is a bit more astute than you are. There are much bigger things to worry about in this world than someone who is arbitraging to earn a living.            

Perminate Link for eBay Sellers Use Amazon Prime to Drop Ship in Retail Arbitrage   eBay Sellers Use Amazon Prime to Drop Ship in Retail Arbitrage

by: RC This user has validated their user name.

Tue Feb 26 16:18:55 2013

You make it sound like this person is making a killing on every sale, check out some of shoppingspreellc's completed items.

For example, an Everybody Loves Raymond complete set she sold for 197.14 sells for amazon on 179.93 = OMG 17.21 PROFIT?

Not quite.. in the DVD category, Ebay fees are 6.50 + 5% of the remaining sale price. Paypal Fees are 2.9% + .30 and the ebay listing fee is .5 cents.

Put that all together, and the fees total 19.87406

Subtract that from the amazon selling price of 197.14 and you have yourself 177.26594 which is (ok ill estimate) 2.60 bucks less than the amazon price of 179.93..

So she lost money?

Not to mention the THOUSANNNDDDSSS of unsold items she has that cost .5 cents to list.

So before you all quit your day job you might want to put a little more thought into it.

Perminate Link for eBay Sellers Use Amazon Prime to Drop Ship in Retail Arbitrage   eBay Sellers Use Amazon Prime to Drop Ship in Retail Arbitrage

by: RC This user has validated their user name.

Tue Feb 26 16:25:29 2013

OH YEA FORGOT SALES TAX TOO BRO

Perminate Link for eBay Sellers Use Amazon Prime to Drop Ship in Retail Arbitrage   eBay Sellers Use Amazon Prime to Drop Ship in Retail Arbitrage

by: Benhovel This user has validated their user name.
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Wed Apr 17 17:39:28 2013

I did amazon, eBay arbitrage for a while and did well.  One thing that I found helped was ordering items for amazon's in a different country to get items even cheaper.  I used a price comparison tool called www.huge-river.com and often found it better value to buy from Amazon France or Amazon Germnay and delivered to the UK if the ASIN is the same then the item is the same! many electrical items come with multinational plugs same ASIN and it will work in your country, bonus.

Perminate Link for eBay Sellers Use Amazon Prime to Drop Ship in Retail Arbitrage   eBay Sellers Use Amazon Prime to Drop Ship in Retail Arbitrage

by: Benhovel This user has validated their user name.
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Wed Apr 17 17:44:00 2013

Thought I would give you all a working link after a epic fail in my last post!  

Perminate Link for eBay Sellers Use Amazon Prime to Drop Ship in Retail Arbitrage   eBay Sellers Use Amazon Prime to Drop Ship in Retail Arbitrage

by: d84rrv This user has validated their user name.
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Sat Jul 13 15:46:22 2013

Beware when doing this amazon's prices change constantly, here is some graph examples,



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