Setting Prices for eBay Items
In many cases, there will be other sellers selling the same or a similar item to yours on eBay. How do you decide what price to sell your items for? Here are some ideas to help you decide.
Check the Competition
One of the easiest ways to find a good selling price is by searching for the item on eBay. Look at what others are selling (or not selling!) the item for. You can tick the box on the left of the page to search only completed items, this will give you an idea of what items sold for, or if they didn't sell at all. Don't think that you have to be the cheapest to compete. eBay themselves do seem to have a 'cheapest is best' mentality, but this is sometimes described as a 'race to the bottom' with sellers making little or no profit, or sometimes even a loss. Don't over-price the item either as this can put buyers off. Try to get an average price and go for somewhere in the middle, not too cheap, not too expensive. Buyers will often pay a little more for good service, a solid returns policy, good packaging and fast dispatch. There is also a danger that if you price your item too cheaply that buyers might think it's poor quality or fake.
How Much Did You Pay?
An important factor in setting your price is how much you paid for it. Many retailers work on a simple principle of adding the vat, then doubling the purchase price to get the resale value, and this works for some. Don't presume that your competitors paid the same as you, even if you use the same supplier, because many suppliers offer special discounts for high volume buyers and/or long standing customers. If you can't afford to sell it a price that doesn't make a decent profit, then don't. Decide what you can sell it for, and stick to it where possible, don't get involved in a price war. As above, you can compete in other ways than just price, don't aim to be the cheapest, aim to be the best. Try to introduce the concept of value in your listing description, not just the price. For example rather than being the 'cheapest on eBay' why not push the quality of the item? Use phrases that will sell the product, highlight the durability of the item or the build quality. It's better to pay a bit more for a product that will last longer than a similar cheap item, and you can get this message across to potential buyers by having good quality descriptions.
If you have a new item, and there aren't many other sellers selling the same thing, and you have more than one to sell and can't decide what to sell it for, you could try selling one on auction first to get an idea of how much it will sell for. There's an element of risk if you start the auction too low, but if it's an in-demand item, you might be surprised.
Your prices can be fairly flexible depending on demand, and should be reviewed regularly. Is an item selling out all the time? You could try increasing the price a little to increase your profit. Has it stopped selling because someone is undercutting you? You could drop your price to compete, or you could sit on your stock until the competitor has run out. Has the item been featured on television recently? You can bet demand will shoot through the roof and increase the value of the item. Is it a seasonal item? For example if you're selling fans, people generally won't want them much in the colder months, so you could drop your prices, then put them up again when the weather turns hot and fans are in high demand once more.
Remember Your Costs
Many new eBay sellers make the mistake of thinking that if they buy an item for £5 and sell it for £10, they make £5 profit. Unfortunately it's not quite so simple. It's important to remember the other costs that can and will eat into your profits. There are eBay listing fees and final value fees, plus PayPal fees that will affect your profit margin. As a rough guide, factor in around 15% of the selling price for eBay and PayPal fees. Don't forget that any packaging, stationery and other materials used all have a cost and this needs to be considered when deciding how much to price your eBay items at. If you're a business seller, you are also liable for income tax on any profits you make. If you use your car to do the post office run, this is another expense to consider when working out how much to charge for an item.
In summary, do your research, keep an eye on demand, and remember to include all your overheads when working out how to set your eBay prices. If something you sell is not profitable, see if you can increase the price or reduce your costs. If you can't, then stop selling it and spend your time and money on something more productive and profitable. For help in reducing your eBay and PayPal fees, read our article Save Money on eBay and PayPal Fees.