How I Make Money On eBay Part Five

Whats The Price

First time here?/ Check Out It Out From The Start How I Make Money On eBay Part One

This is where you can make or break your business... over priced your item will not sell... under priced you may lose business as people see your item as cheap...

To give you an example, I sell my flags not as the lowest price, and I am not the highest price... but I am much closer to the highest then the lowest... I found this to be the sweet spot with some work...

When I started I wanted to be as close to the lowest price if not the lowest price on ebay... the reason was simple, I was willing to start my business based on my customer service... If I had great customer service I would have customers for life... I believe I do have customers for life, i get many emails telling me they are back for the third forth or more times to purchase from me...

When selling on eBay your feedback is everything... So where do you start to figure out the price for your item... let me try to explain how I did it...

A few short months ago, you could charge a shipping fee and not pay an eBay seller fee, not sure what that is check out How I make Money On eBay part Four

So I guessed estimated a selling rate of 1 sale for every 5 auctions I listed... the average price of a flag was 7 bucks... so that means my listing fee is 25 cents each... so it would cost me 1.25 in listing fees... paypal fees would be about 50 cents.... shipping would be 1.26 shipping supplies 20 cents... cost of the flag was 2.15 and eBays seller fee would be about 70 cents... so I get 7.00 and I have to pay 6.06 in fees and cost... so I would make 94 cents not much profit huh?? so I looked at the math...

Hmmm if I change my pricing from free shipping to 99 cents plus a 6.01 shipping & handling fee I would save 75 cents... I would make a return on my investment of almost 65%... I could live with that... volume was my target...

So thats how I priced my items on eBay... 99 cents with a shipping fee... I even listed how and why I used a shipping fee... figuring that would save my feedback... the sales came in... I ended up right around 1 in 8 auctions for sales, if I listed 80 auctions I sold 10 items... which was not a living, but an extra income to start...

eBay Sale Secrets

Negative Feed Back Times 8

I never really had a problem with my feedback, until I had a guy buy 8 flags from auction... his shipping fee was almost 45 dollars... Well he left me 8 negatives... I had gone from a steady stream of sales to a business on the brink of closing because of one buyer...

Looking back those 8 negatives were my wake up call... I had to be careful with the shipping and handling fees that I charged... Yes I still have shipping and handling fees, sometimes it is to save the customer money...

If you charge a shipping and handling dont expect to be 100% positive feedback... People will never understand how business works, they just think if your price is 99 cents, then that is what they should pay... they dont see that the 99 cents plus the 6.01 shipping is still much lower then the guy selling the same flag for 8.50 with free shipping... So know right now if you have a shipping fee, you will have negative feedback...


Pitfalls To Watchout For In Pricing

Well the biggest pitfall I see sellers making is charging just one penny to much... Thats right a penny can break your bankroll quickly...let me show you how...

You write an eBook... you figure okay a fair price is 10 bucks on eBay... You make a beautiful ad, list it on eBay and have a starting price of 10 bucks... it takes you 10 listings to make one sale... since it is an eBook cost are very low right??

WRONG... because you listed it at 10 bucks instead of 9.99 you will pay and extra 2.50 in listing fees... see eBay charges 25 cents to list an item from 1.00 to 9.99 they charge 50 cents for items from 10 dollars to 24.99 see the problem... an EXTRA 2.50 in fees... now you list 1000 over the month... 250 bucks in lost profit...

The next thing is taking extras for listings... you have to be very careful, the fees for gallery plus, bold, and all that can get to be quite high espically when you figure it will take you mopre then one or two listings to sell your product...

There is no real rocket science to pricing your item... to this day I have 4 or 5 different pricing strategies for the same product. just dont list it 1000 times until I have test ited it fully to see if I will make a return on my investment... make a mistake with one listing it will cost you a couple of dollars... make the same mistake because you list the same mistake 1000 times well you could be talking the price of a car in fees...

I pay eBay well over 1000 dollars a month in fees, I have been for over 2 years now... but I will also tell you I have a very profitable business because of those fees, once I learned how to price my items with the fees it would cost me to sell the items...

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