What is drop shipping?

Dropshipping is a method in which you as the seller do not keep the products in your inventory, instead you work with a supplier who sends the products directly to your buyers.

Your profit comes from the price difference between the payment you receive from the buyer and the amount you paid to your supplier.

An example:

You sell cameras on eBay for $400

A customer from USA (John) buys a camera from you

You contact your supplier in the UK and provide him the shipping details of John.

You pay your supplier $300 and he ships it to John.

Your gross margin is $400–300=$100

Of course $100 is not your net profit since you have to pay:

EBay fees

Paypal fees

Take into account additional costs: utilities, bookkeeping, risk of fraud/return