Price It Right
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Entrepreneur: What are the best strategies for pricing an item to yield the highest selling price?
Jamie Iannone: Starting an auction-style listing at a low selling price ($1 or less) actually gives you the best chance of selling the item and getting the best price. That's because a lot of buyers are interested in finding and bidding on items where there is a low starting price and a chance of getting a bargain. These listings generally have more bidding activity.
Entrepreneur: Why is that?
Iannone: Because it's much easier for a buyer to make a $1 bid early on and get involved with an item--to start a deeper association with it--than if they were just watching it. The deeper the association, the more committed a buyer is to winning it.
Entrepreneur: What are the pros and cons of a Reserve Price--setting a minimum price below which an item won't sell?
Iannone: In general, you should only use a Reserve Price if you're concerned about getting a specific amount of money. The downside of using Reserve is that it's harder to generate the same amount of bidding activity on a Reserve Price listing because bidders know they can be the high bidder and still not win the item if it's below the Reserve, which can discourage buyers from bidding. Plus, there is an additional fee to set a Reserve. To avoid that fee but still ensure a high enough selling price, some people simply set their starting price higher. But then you generally have less bidding activity.
Entrepreneur: What steps should new sellers take before setting a price?
Iannone: You need to have a good product description, make sure you take really good photos, and do some research to find out what amounts similar products are starting at and selling for before deciding on your starting price.
Entrepreneur: What kinds of research tools are available to assist sellers?
Iannone: One tool is a Completed Listings search, which allows a user to see what items have sold for recently--they can sort by price or by date, and it is free of charge. Another option is a two-day Fast Pass to eBay's Marketplace Research for just $2.99, which gives a longer-term, more detailed look at buying behavior for an item.
Entrepreneur: What is eBay Express, and how can it help sell an item?
Iannone: eBay Express is designed for convenience-oriented buyers who want a new item immediately, rather than going through the broader search and bidding process. Sellers with at least a 100 selling feedback rating and a 98 percent positive rating automatically have their qualified items included on eBay Express, which is a separate website, at www.express.ebay.com. The same selling fees apply, but you get additional exposure for no incremental fees, making your items available to a larger percentage of buyers.
Entrepreneur: Do you have any other recommendations for sellers to help improve their eBay results?
Iannone: There's a great resource within the "Sell Your Item" form. When you preview your listing, you will be provided with recommendations for improving your listing. But in general, I recommend starting with something you know well or that is easy to sell. Then price it low to begin with to generate buyer interest and bidding activity. Starting low gives you the greatest chance for success. You should also write a good, detailed description of your item and include quality photos.