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