eBay Pricing Strategies
There are many ways to price your items on eBay to make money. Not all strategies will work for every type of product. This article strives to describe the various pricing methods that are available...
There are many ways to price your items on eBay to make money. Not all strategies will work for every type of product. This article strives to describe the various pricing methods that are available for eBay.
Low Starting Price: Items that are popular generally do better price wise if they start out at a low bid price. By popular items, this means iPods, name brand clothing, digital cameras, etc. By starting at a lower bid price, the item's final sell value will be driven higher because there are more bidders vying for the item. By starting out with a low starting price, you will also save money on listing fees. For expensive items that are not popular or are specialized, this might not work. You might not get enough bids to even reach your cost and you may lose money. A possible solution is to place a Reserve Price on the auction. A Reserve Price is the minimum price you are willing to accept for the item. You set a reserve and then start the auction at a low price. Bids will be posted, but if the bid is below the reserve price, they will be notified in their bid confirmation. New bidders will not see a notice about a reserve price unless they bid under the reserve price. They will see the current bid price, however.
Cost-Based Starting Price: This is just starting your auction at your cost of the items you are selling. This way you won't lose money if you don't have a lot of bids. The disadvantage to selling at cost is the higher listing fees and you will not attract as many bidders.
Buy-It-Now Pricing: The Buy it Now price is the lowest price you are willing to take for the item during the auction. After the first bid is placed, the Buy It Now price will disappear. This is a good way to turn over inventory quickly and allow you to grow your business. Buy It Now seems to work best when you list in conjunction with cost based pricing. If you start too low, you will attract bidders quickly but lose your Buy It Now(BIN) price. Because the main advantage of BIN is faster inventory turn over, it is best to set your BIN price at an average level, not the high end. This will encourage more impulse buyers and more sales. Another way to encourage buyers to use BIN is to offer an incentive for them to use BIN, such as free shipping.
Second Chance Offer: A few years ago, eBay offered a feature called the Second Chance Offer(SCO). It was designed to allow the second highest bidder a chance to buy at their losing bid in the event the winning bidder did not pay. It was very successful and was modified so that sellers could offer an under bidder a chance to buy at their bid price if you have more than one identical item to sell. Simply put, from one auction you can make multiple sales and more money. The best thing is you do not have to pay any additional listing fees even though you will pay the final value fee.
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ABOUT THE AUTHOR
Allen Owen is an enthusiastic home business entrepreneur and engineer. Have a look at his eBay tips e-zine: http://www.thedigitalresevoir.com