Probably the most difficult items to price correctly are one-of-a-kind collectibles or very low-priced items. And when you have a low-priced collectible, you've got a real predicament.
That's the challenge faced by Gail Hubbuch, 59, who sells historic postcards. Hubbuch (eBay User ID: snowhub) started several years ago from her Columbia, Kentucky, home with an inventory of more than 100,000 postcards, for which she paid an average of just 26 cents each.
"I've sold postcards to the Guggenheim, the Smithsonian, and several historical societies," she says. But pricing is still more art than science for Hubbuch. "My main selling strategy is to make money on obscure places that no longer exist. I never know what the price will be--it has to do with people's emotional attachments to those places," says Hubbuch.
It's that emotion that drove one of her postcards--a picture of a small-town gymnasium--to a final selling price of $263. "I've sold many cards for over $100," says Hubbuch. But she concedes that most go for about $7, and many in her collection will probably never sell.
With more than 700 coins, 300 stamps, 15 Pez dispensers and 9,675 other collectible items sold every hour, according to eBay statistics, eBay is the perfect market for collectibles. Nonetheless, it takes a keen marketer to optimize profits on low-priced items.
John McDonald, eBay's director of Home & Garden, recognizes the unique challenge that sellers like Hubbuch face. "You're trying to make this a great value to a buyer," says McDonald. "If it's a low-priced item, how can you make the whole price they're paying a great value? At a low average selling price, you want quantity."
McDonald says the answer to both value and volume lies in offering attractive shipping rates. "When you get down to low-priced items, you're balancing shipping costs vs. selling price," he points out. "For example, people are selling cabinet pulls for 99 cents, but the shipping is typically $4 to $6. You want to make it obvious that you want buyers to bundle and buy a lot of units."
Pricing for Value
Whether you're selling postcards or Prada, the right pricing strategy will attract new buyers and maximize profits. The key in all situations is value--that magical mix of right price, right time and right place. With a little practice and experimentation, you can start making the eBay magic work for you.
To Reserve or Not to
Like many sophisticated eBay sellers, Ann Wood (eBay User ID: willow-wear) strives to get the highest price while paying the lowest fees to eBay. As a Gold PowerSeller, Wood has experimented with reserve pricing, but finds it counterproductive. Adding a Reserve Price prevents an item from selling at anything less than the minimum price you set, but costs about 1 percent of the Reserve Price.
"Unless you have a reserve, an item can sell for less than you're willing to sell it for," she explains. "But I don't like to use a reserve--it really racks up my fees. Reserves also dissuade people from bidding."
eBay also notes that on average, items with no reserve typically sell for more than those with reserves.
Although Wood admits that reserve pricing is the norm in some markets, such as antiques, she prefers instead to simply set a reasonable opening bid. "My general guideline, when I'm not certain what it'll go up to, is to start the item at a price I'll be happy to get even with just one bid," she says. That simple strategy guarantees she'll get a fair price with the minimum fee.
How to Find Prices From Completed
"Pricing starts with research," says Ann Wood (eBay User ID: willow-wear). When she's listing an item, she lets the market tell her what it's worth. "I look at active item listings first, then at recently completed sales," she says.
To find out how much similar items have sold for in the past, try this simple search procedure:
- Sign in--this information is available only to registered users.
- Click on the "Advanced Search" link at the top right of most eBay pages.
- Enter keywords for the item in the box on the search form.
- Check the "Completed Listings Only" box in the "Advanced Search" form.
- Add any other criteria, and click the "Search" button.
David Worrell is Entrepreneur magazine's "Raising Money" columnist.