Much of my success on eBay was the early lesson that I learned while selling my DVD and CD collection. It was by chance that I realized the successful process. If you are looking to sell on eBay and expect to receive high returns immediately, you are more likely to get discouraged if no one puts a bid on your items. And why is that? You may be pricing your items too high for the common eBay user. Most of the people that log on to eBay are expecting bargain prices and therefore, they are bound to look for “great prices” or “great buys” while browsing through items. When I started, I didn’t care if my CD or DVD sold for a dollar. I just wanted to get rid of them. I listed all of the items with a starting bid of .01 cent. That got a lot of attention and my items received more bids than the same CD or DVD with a starting price higher than a penny.

At the end of every auction, I would sell most, if not all of the items I listed. On average, I still made money from it although it wasn’t huge. I was glad to rid of the clutter in my home and made some income at the same time. Since then, I knew that I could start low and expect to receive more visitors. There are also exceptions of course. As I became more familiar with the process, I knew that there are items that I wouldn’t sell for less than the amount I believe it is worth. In these cases, I would put a low starting bid but in effect, add a “reserve price”. A “Reserve” is one way to keep the item if the “desired” price you want to sell it for is not met. There is a fee associated to a reserve price but if your reserve price is met by the bidder, the fee you paid for will be refunded to you.

Example:

Salvador Dali Painting purchased at $90.00 USD.

I will list it this way.

Starting bid: .01 with a Reserve Price: $90.00 USD.

You may choose not to reveal the reserve price to buyers but if they do ask, it is your choice to disclose it.

Bidder A bids for $30.00 USD

The price will be set to $30.00 USD but it is noted that the reserve price hasn’t been met and therefore, the item is still not sold to the highest bidder.

Bidder B bids for $49.99 USD

The price will be set to $49.99 USD outbidding the first bidder but it is still noted that the reserve price hasn’t been met and therefore, the item is still not sold to the highest bidder.

Bidder C bids for $99.99 USD

Since your reserve is at $90.00 USD, bidder C would have met the reserve price and outbid all bidders and the current price will be set to $90.00 USD. Why $90.00 and not $99.99? Because Bidder C is the last bidder. If someone bids higher than $99.99 USD, the price will go to the highest bidder. Yet, until $99.99 is surpassed, Bidder C will remain the highest bidder and could win the item.

When pricing an item, it is good to cover all your costs as if you already sold the item. Things to consider are:

• Listing Fee
• Final Value Fee
• Packing and Shipping Costs
• Paypal Fees
• Your time in handling the transaction

Listing Fee - This is the fee charged to the seller to list an item. The amount depends on the value of the starting price. (i.e. 0.99 cents to 4.99 USD starting price may cost you .20 cents. 5.00 to 9.99 USD starting price may cost you .50 cents)

Final Value Fee - This is the fee charged to the seller when the item sells. There is a certain percentage charged on the amount your item has sold for. This is only applicable if your item sells otherwise, no fees are charged.

Packing and Shipping Costs - We all know that packing supplies and shipping has a cost. I usually save on shipping supplies by keeping the same packaging my inventory came in on. I buy artwork from auctions and when they ship it to me, it is usually packaged in tube rolls. There is no reason why I should throw the packaging away. I keep it and use it to re-ship the item once it is sold. In this way, I don’t charge a higher shipping fee to any of my customers because it literally didn’t cost me anything.

Paypal Fees - Nothing is free in this world. Paypal, as the financial arm of eBay, charges a percentage of the price paid to you using their service as well. There is a range of rates listed on their site and you should really research and find out the cost so you can cover it.

Your time in handling the transaction - I have had some heated exchanges with buyers at times, telling me that my shipping and handling costs should not be a profit stream. My argument has always been, I take the time to pack and ship the goods. I use my car to go to the post office, I spend time falling in line and whatever else. I don’t charge shipping and handling just because I like it, it is associated with the time I spent handling the package. It is a cost and I am simply covering it.

Once you’ve covered the basics - you are free to choose whether you would list your items at .01 starting price with or without a reserve. My experience has taught me that starting the price low is the best way to run your business. At times where I don’t want to lose money on a deal, I usually start the bidding price at the price I bought the merchandise for. If someone bids on it at the last minute, I lost nothing.

We will be talking about “Handling fraud and disputes.” on our Part 5 of our Ebay and Paypal series.

Until then…

Gobble Gobble!

Pro Gobbler

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