eBay - Start Low or Start High, Which Will Make The People Buy?

You place an item for sale on eBay. Next decision -- do I price it really low, to attract interest? But in that case I risk getting a very low price in the end. So do I price it high? But then I run the risk that I won't attract enough (any) bidders.

In their book Yes! 50 Scientifically Proven Ways to Be Persuasive, authors Cialdini, Goldstein and Martin make the case for how to price most effectively with "proven way" #21. Based on the work of a behavorial scientist, they believe that starting an item with a lower price will ultimately lead to a higher selling price, on average, for three reasons:

1. Lower prices encourage maximum participation from bidders early in the process.
2. The early increase in traffic (in both # of bids and bidders) created by a low price acts as "social proof" for new potential bidders.
3. Bidders for items with low start prices tend to spend more time reviewing and tweaking their bids over the course of the auction, and the further they go, the more they've "invested" in the process, which further makes them more likely to continue.

One caveat: since social proof is the driving motivator in this scenario, if an item only attracts a few bidders (rather than many), the low price strategy can backfire and result in a lower selling price in the end.

So you need a product that's in demand if you want to set your price low -- the let the bidding ensue!