Pricing Your Products On Ebay

Competing on price on EBay is a sure way to disaster. Sellers who employ this strategy will find themselves at best working for nothing and at worse losing money. The eBay market place is full of different types of sellers who are all employing different strategies to achieve their specific goals. There is, for example the big players. These are guys who own large businesses and will use eBay to dump stock on. They may not be bothered about making a profit they just want rid of their stock so they’ll sell it at a low price.
You also have the big players who use eBay to attract customers to their websites. They will sell products below the market value knowing that once they hook a buyer they will then up sell other products to make a profit.
You also have people selling personal items that they no longer want, or unwanted gifts so they will sell these for a low price and of course you will have people selling products illegally, copies etc. For a new seller to enter this market place and try to compete on price is business suicide.
I write from experience as well as thorough reviews and experiments. In my early days of trading, I did try to compete on price and I paid the price for that folly. I run an online arts store www.artscraftsandhobbies.co.uk and I have my own eBay store Arts, crafts & Hobbies. A part of my inventory consists of painting instruction DVDs. When I first started trading, I started on eBay and I priced the DVDs low at £10.00 each. Now art instruction DVDs are quiet expensive, they retail for between £18.00 up to £60.00. I had a supplier who provided me them at a good price.
As I said, I originally priced them at £10.00, which didn’t leave me much of a margin but I was naïve,and as you know we all have to pay to learn. After engaging in quiet a lot of studying and experimenting, I saw that price increases didn’t affect my sales at all. So, I took the decision to raise my prices substantially. For example, I increased the price of my DVDs from £10.00 to £14.99.
Now this is a substantial increase but in reality, it’s around what I should have charged originally. My reasoning was simple I would have to take a huge hit on sales to actually lose revenue, I worked out it would have to be something around a 35% drop. If sales did drop by that amount then I would be still earning the same income level from less work. Sounded like a good deal to me.
Now here’s the strange thing. My sales in the first month of the price increase went up. I sold more DVDs that month than any previous month since I had started trading. And they have remained steady. I also sell plenty of products in my store that other sellers sell cheaper.
I do not try to compete on price. When I add a new product to my store I don’t even look at what others may be selling it for, I’m not interested. I price the product using my own system, which takes into account eBay and PayPal fees and gives me my profit margin. I’m not doing this to make eBay rich or to give things away. I’m doing this to build up an income for me and my family. I want rewarding for the work I put into my business otherwise it’s pointless.
So if you’re thinking about entering the eBay marketplace don’t get fixated on the prices others are charging for their products. Take your cost price and add eBay and PayPal fees then add your profit margin and that’s your selling price. Be professional and focused. People don’t just buy on price and you probably don’t want to do business with those who do. Other factors come into play like how well you have listed your item, feedback and trust. Experiment a little and see what happens.
Keep Trading

Paul

Multiple EBay Accounts

Having a number of different eBay accounts is a good idea and allows you more flexibility in selling. Many of the top eBay sellers operate multiple accounts. The idea behind it is simple, it allows you to use one account to specialize in a certain niche where your shop can become recognized as selling to that niche and repeat customers will come to you.

You can then use another account to sell general items that would dilute your brand name if you put them through your niche shop. For example, if I sold dinky toy cars from my niche shop. Toy car collectors would visit to check my items. I could brand myself as an authority in this niche.

After a while, people would start to trust me and come to my shop for their cars. If I then started to add unrelated items, like camping equipment, MP3s and other products. I would lose my branding as a toy car specialist; I would become more of a general seller. Toy car enthusiasts would desert my shop because I would have diluted my brand. They would no longer see me as an authority.

The way round this is to have separate accounts. If I did sell toy cars, I would have a shop specifically for that product and stick with it. Looking to build up credibility as an authority on this subject. Once you gain that credibility, you are guaranteed repeat custom to your shop.

I also want to keep my options open however, and have the flexibility to sell general items. If I see a local auction that’s selling items I think I can sell on eBay to build up some cash, I want to be able to do that. Without damaging my toy car shop. The way is to just open another account on eBay. Use this account for general selling and the other account for niche selling. You get the best of both worlds.

Once you’ve got yourself some experience on eBay then opening another account is a good idea to give you more selling flexibility and build that pension money quicker.

Ebay Traffic Falling

EBay traffic is falling fast. According to Ina Steiner from auction bytes, eBay traffic declined by 32% from a year ago and 40% compared to four years ago. I’ve seen a massive drop in sales from my own store and I’m not alone.

A quick look around the eBay forums tells the same story. Storeowners are complaining about falling sales and less customer visitors. Complaints to eBay are met with the usual “nothing’s changed” response.

Things are changing though. There’s no doubt that traffic is falling fast. How much of this is due to the current economic situation and how much is due to the changes eBay has been implementing over the last few years is unclear.  There’s no doubt that the trend is downwards, and it’s also certain that the ever rising costs of selling on eBay is driving sellers away.

Ebay seems to want to attract the big retailers to the site at the expense of smaller sellers. The constant rule changes are forcing many small sellers off the site, these combined with the high cost of selling on eBay are making it more difficult for small sellers to survive on the auction site.

It takes time and effort to sell on eBay, if the returns are low then more and more small sellers will leave the site.  Personally, if I stop reaching my profit margins I’ll be one of them.

There’s no need to despair, eBay is just one avenue to use to make a second income online, there’s plenty of other ways. Don’t forget Amazon is a growing marketplace and direct marketing is a proven technique.

As eBay continues on its downward slide, it’s important that online sellers look for other venues to sell on. Don’t put all your eggs on eBay, on present trends they’ll get scrambled.

Well it’s a wet Sunday here in Leeds, I think I’ll go for a pint.

Cheers

How To Combat The Asian Sellers On Ebay

Sellers from Asia are everywhere on EBay. Selling in every category for prices that are much lower than UK sellers can source products for. For example, I’ve seen sellers from Hong Kong selling products for £15.00 that I can’t source for £20.00. If you’re new to EBay, you can look at these prices and become disheartened, believing you can’t compete. Don’t despair.

You have many advantages in your favour. First, forget about trying to competing on price. You cannot. Nor should you even try. I’ve seen guys in business forums bragging that they make £5.00 on a hundred pound sale. I wouldn’t even bother. It’s not worth the effort, such a low profit margin is not a viable business model, it’s more like a hobby that pays some pocket money.

The objective of a business is to make a decent profit for the effort you expend. 5% in my book is not a decent profit. I like to look for at least 30% upwards. So how can you compete against the Asian sellers?

It’s easy really. The sellers from Hong Kong will be charging very high shipping costs. They might be charging £12.00 for example for a product you can ship for £2.00 that adds £10.00 to the cost of their product.

You can also wipe the floor with them for speed of delivery. Shipping from Hong Kong can be slow and unreliable. You, on the other hand, can get your item delivered the next day by Royal Mail first class.

There’s also the possibility of buyers buying from Hong Kong of being hit with a VAT bill. And there’s the added problems of returning the product if it is faulty.

You can offer your customers something they will be willing to pay for: security. If you are selling in a market where there are many sellers from Hong Kong make it clear in your listing that you are a British seller.

Emphasise the quick and safe delivery and the ease of access to you should anything go wrong. Make a point of stating that there is no additional cost associated with buying from you. The price you see is the price you pay.

All these things will negate the cheaper priced product from Hong Kong and ensure you maintain your profit margin.

Never try to compete on price on EBay or you won’t be able to create a viable business model. It’s not only the Asian sellers who sell cheap. You also have companies who are dumping stock, companies who use products as loss leaders, to get people to their websites, where they will up sell to them. And of course, you have some people who just don’t know what they are doing and sell too cheap to make a realistic profit.

You’re on EBay to make money so avoid getting into a price war. Set your margin and stick to it. Most buyers don’t just buy on price; they also want reliability and security.

7 Reasons Why You Should open An Ebay Shop

No serious business can exist without a shop to display its goods. Ebay is the same. If you want to become a serious ebay seller with a recurring income then opening a basic store is a must. Here’s seven reasons why opening an ebay store is essential to grow your business..

1. Gives you instant credibility by having a regular web presence.

2. Allows you to list hundreds of products for customers to browse.

3. allows you to automate the repetitive tasks associated with online selling. This will save you lots of time to devote to more productive areas of your business.

4. Allows you to market more effectively

5. allows you to build relationships with your customers and guarntee repeat sales.

6. Get free reports about your sales. This is crucial to see what’s happening in your business. You need to get access to what’s happening so you can make informed decisions and formulate stratergies to grow your business.As your business grows and your inventory and activity increases, you need all the help you can get.

7.Gives you more exposure. Ebay reports that people who open a store receive a 25% increase in sales within 3 months. You are guarnteed more exposure by having your products permanently online for potential customers to view any time of the day.

A shop will prove you are serious about starting a business. It will be a committment to yourself that you are not just an occasional ebay seller but a professional trader. If you haven’t already done so, take the next step and open a shop.

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