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How To Sell On eBay: Pricing Strategy

Many new eBay sellers make one of two mistakes: either they overprice items to an unsellable extreme; or they lose money on every transaction by setting low starting prices with no restrictions.

In this lesson, I am going to go over which pricing strategies to use and when if you are using a ten-day auction setup.

Strategy #1

If you are listing a popular item that you are confident will sell for a high price, one strategy you can use is the ten-day, one cent starting price, no reserve auction. This is the best way to start a bidding war: pull in bidders early with a low starting price and no reserve and give them ten days and two weekends to battle it out.

Depending on the profit-margin of the item and the quality and number of your competitors, you may want to consider using listing upgrades, such as bold, highlight, and feature listing options to ensure your auction sticks out of the crowd.

Please note that I do not recommend this strategy for beginners. This is extremely high risk if you do not know how to take the risk out of it - and this is not something I can teach you. You must determine this by assessing your own personal inventory with tests.

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 ten-day auctions.

You still wont use a reserve with this strategy. But instead of setting the start price low to encourage a bidding war, you are going to set your start price to your ideal selling price - and then couple it with a buy it now price that is slightly higher.

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 ten days sooner if she uses the BIN option to order it then, rather than waiting for the auction clock to tick down.

The strategy I described above is very safe. I use it for the majority of my auctions and I always get positive results. At worst, it will take me 3-4 weeks to sell an item, but I wont ever lose money. I just adjust the price to compensate for additional fees.

Strategy #3

Another effective way to use a ten-day setting is in conjunction with dutch auctions--or auctions that sell a number of the same item. Ten-day auctions will give you the longest amount of time to move the highest amount of products.

You may also want to feature ten-day dutch auctions, depending on what items you are selling. If you're selling information products and rely on the quantity of sales for profit, this wont be effective; but if you're selling a number of expensive, high profit-margin items, featuring your auction is probably a good idea.

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If none of these strategies works for you, you should consider the following two things: 1) the price other eBay businesses sell your product for. If someone else IS selling your product, there is a reason for it - and it's probably the price. If you cannot afford to sell at a reasonable price, you need to find a new source to buy from. And if your product's price is reasonable, then 2) you need to redesign your auction and find new ways of pulling in targeted traffic.

http://www.workathomerightnow.net/eBay.html - Written by Isaiah Hull, author of "How to Profit on eBay In Seven Days Without Spending A Single Penny." For a limited time only you can get a pre-publication copy of his book for ONE-FOURTH the post-publication price!

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