A Professional Guide to Two-Step Dropshipping
The two-step dropshipping method is an alternative way to ship eBay orders by receiving items first before sending them to the buyer. This guide explains how this method can help you manage sales tax, improve your account health, and save yourself a headache.
Running your business well means choosing the best way to ship every order. Most sellers ship directly from Amazon to the buyer to save time. However, the two-step method involves shipping the item from Amazon to your own address or a warehouse first. Once you receive the item, you then forward it to the buyer using a new shipping label. While this adds an extra step to your work, it offers specific benefits for tax savings and account safety.
Using the two-step method can solve several common issues that sellers face when shipping directly from Amazon to buyers.
Tracking Accuracy: When you ship to yourself first, you do not need to use tools like TrackTaco to hide Amazon tracking numbers. You will create a fresh shipping label when you send the item from your address to the buyer. This ensures the tracking data in eBay matches your business location perfectly.
Sales Tax Savings: This method can save you money if you have a resale certificate in your home state. For example, if you live in a state like New Jersey with a 6.625% tax rate, you avoid paying that tax on the item coming to you from Amazon. This keeps more profit in your pocket for every order you process.
Packaging Control: Shipping to yourself first allows you to remove Amazon branding or boxes if you choose. While most buyers do not mind supplier packaging, having the option to use your own boxes can help you maintain a more professional appearance.
While the two-step method has benefits, it also requires more time and money than shipping directly from Amazon.
Extra Shipping Fees: When you ship directly from Amazon to a buyer, the shipping is free (if you have prime). With the two-step method, you must pay for the second shipping label to get the item from your house to the buyer. You must calculate this cost to ensure your profit margins stay high.
Fulfillment Speed: Sending an item through two different shipping legs takes more time. This extra "hop" can slow down your delivery speed. To run your business the best way, you must make sure your eBay handling times are set correctly so buyers do not get frustrated.
Manual Labor: This method requires more work. You must receive the package from Amazon, print a new label, and drop the item off at a carrier like USPS or UPS. This takes time away from other tasks like listing new products or researching inventory.