How to Choose the Right eBay Pricing Strategy
Before we get into how to price eBay items, we want to make clear that this is not a cookie cutter, “one size fits all” strategy.
What works for one person’s business may not work for someone else.
It’s important for each business to test and try their own strategies to find out what works best for them.
That being said, we wanted to share our experience with learning how to price eBay items.
In the beginning…
We’ve been selling on eBay for over 10 years, but we didn’t start seriously trying to do it full time until a few years ago.
We watched a lot of webinars, read blogs, followed “eBay gurus” and tried to get advice from as many people as possible.
So, with all the information we got, we developed our own pricing strategy. We got rid of anything that wouldn’t make us at least $5 profit. This may not seem like big money to some people, but we were tired of wasting our time on piddly items that barely made any money at all.
We learned to think about prices as we were picking so we stopped buying things that we knew we couldn’t profit at least $5.
By doing this, we actually got to the point where our average profit was around $10.
We were targeting the customer that didn’t mind spending $24.99 on a used shirt. We wanted the people who were frugal enough to buy used, but were willing to pay good money too.
But there was a catch:
In our area, it is really hard to find stuff that will give us the profit we want. So while our profit was around $10 per item, we couldn’t get enough items to make enough money.
Time to Rethink the Strategy
We decided that something had to change. We were tired of only selling 30-40 items per month (which is certainly not enough to make a full time job out of).
So we re-examined our strategy and decided to go with the “turn and burn” strategy.
This means we will price the item on the low end of what is currently listed, hope to sell it fast, and reinvest that profit into more items. Eventually this would turn into a snowball effect and we would sell more and make more money.
Yes, it really hurt to put clothes that we originally priced at $19.99 all the way down to $6.99.
It was hard, BUT, since we started using this strategy we have sold twice as many items! Our profit obviously hasn’t doubled, but since we are able to sell more items we have seen some steady increases in profit.
However, now we can find a lot more items to fill our inventory. We dont have to get huge brand names, we can get so of the lower names we would never even consider before.
[Tweet “This gives us more items to list, which means more items to sell!”]
We also stopped offering free shipping. Since we decided to lower our prices so much, there was no way we could offer free shipping anymore. We decided to offer flat rate shipping prices on anything that could go in a padded flat rate Priority envelope or that could go first class (which is a majority of our items). Everything else is calculated.
Now we are targeting a completely different class of people: the ones who are looking for the best deal on eBay (which is a lot of people!).
What is Your Experience with Pricing eBay Items?
Again, just because this is what’s working for us, doesn’t mean it will work for you.
A lot of your strategy will depend on the types of items you sell, the current market for those items, your financial goals, etc.
That being said, we would love to hear about your pricing strategies and what is working for you!