Auction Business Frank Ross on 14 Oct 2006 06:56 pm
99 Cent Listings on eBay
If you sell products on eBay, and use core listings (core listings as opposed to eBay store listings), how do you choose a starting price?
Let’s say for example, you’re selling a product that costs you $180 and you have determined through research that it will sell anywhere between $200 and $250. You’ve determined that your break-even point is about $195 given eBay’s final value fee, PayPal fees, and misc. Do you start the listing at $200 to ensure the that you get at least some profit out of the product or do you start the listing much lower? What about starting the listing at 99 cents?
The benefit to starting listings at 99 cents is the savings in the eBay insertion fee. In our example, it would cost 3.60 to start the listing at $200, but would only cost 20 cents to start the listing at 99 cents. That difference of $3.40 may not sound like a lot, but if you’re selling loads of those items, that difference adds up quickly. You can see eBay’s core listing fee table on their fee page (link here).
The downside to the listing something at 99 cents is the risk that the item will not sell for your target $200 or even your breakeven of $195 (as in above example). This is where your research comes in. If you have researched the product thoroughly and / or have tested listing the product until you’re confident of the ending price, then it only makes sense to start the bidding at 99 cents. if you’re not confident of the ending price, then perhaps a higher starting price is in order.
But it’s a well known fact (and even eBay will tell you this) that lower starting prices generate more bidding interest in your product. Conversely, higher starting prices will deter some bidders from your listing.
An alternate way to approach this is to use a 99 cent starting price with a reserve price of $200 in (referring to above example). Perhaps that’s another blog post, but either way, 99 cent listings can save you lots of money in the long run for the items you sell.
– Frank Ross