by Johnnie D Williams

Created on: March 13, 2011   Last Updated: November 10, 2011

Deciding how much to sell and item for is a dilemma that is easy to solve. You really do not want to set your prices too high and discourage sales or too low and end out giving your item away. So what is the best way to set pricing on eBay? Follow these tips and you will stay in profit. One of the money hidden search functions of eBay allows you to search for the “completed” sale price of an item. It is very useful tool indeed.

Research the market completed listings

Check by entering your search as normal, then check the completed listings only button on the left hand side. This very handy search tool will produce a list of similar items and indicate the final sale price. You can also look at bid history, giving you an idea of how the auction started in terms of pricing. It will show you the complete bid history. You can then of course see the start price.

If an item is very popular, listing it as an auction with a small initial start price will help create a bidding war. If it is not a popular item consider “Buy-It-Now” as an alternative. It may not sell immediately but when it does you will have made back your listing fees. This strategy of using BIN is important as it will prevent you selling for a loss.

Gross profit margins are a fundamental to business.

To understand how to use a gross profit margin to create and analyse your sales it is necessary to do some math,

Once you have brought your items to sell on eBay you need to make a profit by selling your item with a profit margin. Take 10 pairs of shoes for an example they have cost you £50.00 so they have cost you £5.00 a pair. For this Item you need a 40% margin to support yourself. So you need to divide £5.00 by 100% (which gives £0.05) and multiply this number by 40% (£0.05 x 40 = £2). This figure is added to the initial purchased cost, so you must sell the shoes for £7.00 to make a gross profit margin of 40%. Use BIN to create this price. Gross profit margin is ideal to give you an accurate price you must sell your item for.

Cover yourself

By starting the bidding at the cost of the item you bought you are covering your costs to some extent. If the item cost you £8.99 then start the auction at £9.99. If it is not a hot-seller then you will make most of your money back minus the fees.

Careful with the listing fees eBay uk example

Be careful of listing an item for £30.00 as the listing fees are higher than if you list at £29.99. For example to list a pair of new jeans on eBay for £30.00, you pay a £1 listing fee. Alternatively list at £29.99 and it only costs you £0.50, a saving of £0.50.

Competitors

Remember eBay is a competitive market and you should be aware of how your competitors are pricing their items. Research how much they list their item for and be prepared to list at a slightly lower price, or offer free-shipping as an incentive for your buyers. Buyers always like little incentives to help them decide the best item to purchase.

Setting your pricing is a fundamental element of eBay. Nobody wants to sell an item for a loss otherwise it becomes a demoralising experience. Remember the basics of how to set your price accordingly and you will see your profits remain healthy and steady throughout your selling experiences.

Learn more about this author, Johnnie D Williams.
Click here to send this author comments or questions.