Ebay Auction Pricing Strategies
December 17, 2007
In this article, I am going to go over which pricing strategies that I have had the most success with when using your typical 7 day auction. If your goal is to make serious money online then these strategies are a must read.
Popular Product Strategy #1
If you are listing a popular item that you are confident will sell for a good price then it has been shown that using a 7 day strategy and starting the auction at 99 cents or less will draw the most interest and therefore the most bids. The more bidders that you draw then the higher your final price is likely to be.
This method will attract a lot of interest early on and a lot of people will be tempted to place a bid or put it in their watched items. The more interest you can generate in your product the better.
Ebay is swamped with sellers and many are likely selling the same “widget” that you are selling….so yours at 99 cents vs. theirs at 20 dollars seems like a no brainer. It takes courage on your part but it will pay off but ONLY on items that are fast moving and popular.
I have experimented with the various listing upgrades and special features such as bold facing, highlighting etc and have not measured a noticeable difference in the selling price. My Ebay store sells the same things over and over again so a measurable price increase would show itself. In my opinion the only one who makes any more money with these features is Ebay.
Please note that I do not recommend this strategy for beginners. You will be sorely disappointed if you list your 100 dollar item for 99 cents only to watch it sell for a couple of dollars. You must know how popular your product is and what kind of average selling price it draws on Ebay. I wrote an article on a Research Tool called Terapeak that you can reference and best of all they are offering a free trial. The software is INVALUABLE if you expect to draw the highest prices for your products.
Terapeak will allow you to become an expert much faster than trial and error and it is likely to be cheaper in the long run.
Play it Safe Strategy #2
Now, if you are new to Ebay or want to list an item with undetermined popularity, you can use a safer, but potentially as profitable bidding strategy for your auctions.
Instead of starting your auction at a very low price to encourage a bidding war, you are going to set your start price to the minimum selling price that you accept for your item. One strategy is to price it at what you would take for it but then add a Buy It Now price that is 20% higher or so in order to attract those buyers who must have it right now.
This will put pressure on the buyer to buy it now instead of watching. If she waits, she gains absolutely nothing–and she risks someone else bidding (and ruining the low BIN price) or just snatching it with the BIN option.
In addition, knowing that she will lose nothing anyway, she will realize that she can get the item up to 7 days sooner if she uses the BIN option to order it then, rather than waiting for the auction clock to tick down.
This strategy is relatively safe as you won’t ever sell for less than you can live with, however I can tell you from experience that you will not get the most you can get for your items over the long run.
Turn Buyers Off Strategy #3
Reserve price auctions. I would only use this in a few rare cases….large items such as an automobile or real estate would be good candidates maybe but it is a well documented fact that Reserve auctions turn off buyers. They don’t like playing that game and it takes some of the excitement out of the auction. One only has to watch the latest Ebay “Victorious” campaigns to understand that the way to really drive the price on your item is to get a LOT of people fighting over it. Reserve prices typically won’t do that. Your experience may vary but I NEVER use these anymore.
If none of these strategies work for you then you may have to examine other aspects of your Ebay empire. Are your acquisition costs in line with your competitors? If widget A is selling all over Ebay for 10 dollars, and your cost for the widget is 8.00 then you will be sorely disappointed with your profit margin. Chances are that these other sellers can acquire the product for a much lower price.
If you consistently find yourself priced out of the market I would consider trying either of the two following sources to acquire products. Doba is a dropshipper with a no brainer free trial offer and Worldwide Brands also has a no risk guarantee. These sites will NOT guarantee you to be competitive on Ebay however if you combine Terapeak with these dropshippers you will know what to list and what not to list.
It works for me and thousands of others to make money online with Ebay….so why not You?
