An eBay item listing is a beautiful thing. It magically combines
the best of free markets with a sense of competition and excitement
that almost guarantees you'll get a fair price--perhaps even a
generous price--for the product you're selling.
But the magic starts long before the first bid is placed. In
fact, in most eBay sales, it is the seller who is the
magician--deftly mixing various pricing strategies and tools to
ensure that the most buyers bid the highest price they can.
How you conjure the best prices, of course, depends on what
you're selling. So here are a few tricks for items of all
prices--from $10,000 tractors to 10-cent postcards.
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Getting Top Dollar for Luxury
Goods
Many people mistakenly believe that eBay is only for small,
mass-market items. In fact, there are successful sellers in the
luxury goods market as well. Take Ricky Serbin (eBay User ID:
ricysue) of San Francisco, for example. Serbin left a successful
career in the fashion industry to sell designer garments and
accessories on eBay.
You might not think that one seller could move very many
designer garments and handbags priced at over $1,000 each, but
you'd be wrong. Serbin is a Platinum PowerSeller, selling more
than $25,000 worth of designer apparel and accessories on eBay
every month. "I was lead designer of a large jewelry firm in
the fashion industry, but I quit my job just two weeks after
starting on eBay," he says.
Serbin is part of a hot eBay market for upscale apparel.
According to eBay's own statistics, brand names like Coach,
Gucci and Louis Vuitton are the top search terms in the apparel
category. In fact, a rare luxury handbag recently sold on eBay for
$59,000.
With such wild variations in price, the risks are high--but
potential rewards are higher. "I'm willing to pay $1,000
for something to triple my money," says Serbin. "It is a
gamble, but I take the risk." And indeed, most of Serbin's
pricing strategy centers on making money by reducing the chances of
losing money.
To minimize the risk of not selling the item at all, Serbin
under-prices some pieces. "If I get it for a great price, I
try to pass it on at a great price," he says. Most of his
items sell for 60 percent to 80 percent less than the comparable
retail price--but they sell fast. "Probably 40 percent of my
items sell within 12 hours at a Buy It Now price," he says.
And that keeps him in business with a locked-in profit.
Buy It Now--an option for buyers to purchase an item at a price
set by the seller without bidding--is perfect for high-priced
items, says Ben Hanna, eBay's senior manager for business and
industrial categories. Hanna coaches sellers of high-priced items
to use both the Buy It Now feature and a new option called
"Best Offer." The new feature is getting a lot of use at
the high end of the market. "We've had a lot of demand for
this," says Hanna. "It lets bidders make an offer. If I
have a tractor and want $10,000 for it, I could check 'Accept
Best Offers' during the listing process. The listing shows a
'Submit Best Offer' link and it allows me to negotiate
directly with each potential buyer."
Although managing best offers is not part of Serbin's
current strategy, he always uses a Buy It Now price to capture
those buyers who are purchasing on an impulse or who want an item
right away.
Serbin's other pricing secret is to be accommodating to
buyers from around the world. "Thirty percent of my business
is international--South Korea, Japan, Australia, Morocco and the
Far East," he says. Those customers tend to be willing to pay
higher prices for goods that are relatively scarce in their home
markets. They are also loyal, says Serbin: About 50 percent of his
overseas customers come back for repeat purchases.
Managing the Middle
Market
Well below the price of a couture dress or a custom-made designer
handbag is the vast market for midpriced items, such as the
consumer electronics sold by Jennifer Canty's company, Dyscern
(eBay User ID: dyscern).
Canty, 33, started her Great Falls, Virginia-based business on
eBay to spend more time at home with her family. She admits now
that the idea may have backfired: Her business has evolved to
Titanium PowerSeller status, with over $150,000 a month in sales
and 14 employees. Every bit of Dyscern's revenue is made from
selling consumer electronics like iPods and Palm Pilots. The
company sells 300 to 400 units each week at prices ranging from $30
to about $300.
There's a consistently strong demand for iPods, says Canty.
And that makes finding a buyer a pretty sure bet. But from the
buyer's perspective, one iPod looks pretty much like the next,
so an auction-style listing with a low starting price can create
buyer excitement.
"We do everything at auction," admits Canty. "We
found that we could get higher prices if we just let the market
decide the price." She's not kidding. Every one of
Dyscern's listings starts at just one penny, and on average,
Dyscern's own testing shows that they earn about 10 to 20
percent more from that format than any other.
"I've never had to sell an iPod for a penny," she
laughs. "After a three-day listing, pretty much everything
ends up as it should."
This very simple approach to selling has several benefits for
Dyscern, one being that the company never has to relist a product
that doesn't close. "For a long time, there were just
three of us," says Canty, "so we had to keep it simple.
The beauty of eBay is it's a natural marketplace."
Canty's other strategies include offering international
shipping and listing a few items to close every hour of the day.
That way, she explains, unsuccessful bidders on one item can skip
directly to the next, building a strong momentum for all her
listings. Dyscern's listings are all three days long, which
Canty feels helps her meet the expectations of bidders who want
immediate results.
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