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Hey, Scavengers!
So, I think I’ve been doing this all wrong. I thought I was listing high, but I was looking at Ryanne and Jay’s store (sorry for snooping!) and noticed something that I also had. Here’s the sold listings for the items:
https://www.ebay.com/sch/i.html?_from=R40&_nkw=zook+dutch&_sacat=0&rt=nc&LH_Sold=1&LH_Complete=1
I was going to price mine at $14.99 because that seemed to be about the middle of the road for solds, but theirs is a good amount more than that, while still being on sale.
Should I be aiming for the highest price that something has sold on ebay for my listing price? How do you gauge how high to list high? I have make offer on everything over $20 and I religiously send offers out. Just wondering if I’m cutting myself short.
Thanks!
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We have talked about pricing strategies here on SL before. You may try a search to see if you can find those threads. Some older members had very good pricing strategies to share.
Ours in a nutshell for vintage [over 20 years old], more eclectic type stuff, not everyday commodity items.
Yes, go high. We take the highest comp we can find from 3 or 4 price sources. We believe if someone else sold it for that amount in the last 2 to 3 years, we believe we too can get at least the same amount. So we take that amount then multiply it times 1.60. So if an item sold 16 months ago at $50, we take $50 x 1.60 and list it at $80.
Now here is the strategy which several us have discussed through the years including Jay. That is “Perceived Value, Perceived Bargain, Perceived deal, Perceived having won”
Now we are constantly running flash sales at 7 to 15 day intervals depending on start time, day of the week or seasonal holiday time. So in essence our items are basically almost always on Sale.
So, now take the $80 listed item and it will within 24 hours of listing show the Red Cross Out line over the Original List Price and Show a 25% Off Sale Price of $60. Then now take another 5% Off because we use Promoted Listings at 5% so now that item is down to $57. Now take another 10% Off because we also will tender “Offers” which we cap around 10% to 15% under the Showing Sale price so now the item may be poised to Sell at $51.30 to $48.45.
So now that item sells for just about at what the original highest priced Item sold for, which is right where we wanted it to be in the first place.
BUT THE BUYER is proudly sitting there with a “Perceived value of buying at a discount=FALSE], Ebay showed the buyer how much he saved with the Sale in the listing, a False Perceived Savings, we recoup our 5% promoted listing fee [comes right out of the buyers pocket but he doesn’t know it, Then he MAKES AN OFFER TO US or WE SEND AN OFFER TO HIM [doesn’t matter which] and we or he accepts [again doesn’t matter], then the BUYER IS SO PROUD because he is the WINNER of a “Fake Challenge” and we end up right where we wanted to be in the first place. The buyer gets a trip through the land of falsehoods of thinking he got a deal, caught a Sale just at the right time, bargained us down through shrew lower price offers, he walks away very proud and we smile all the way to the bank.
If an item has set for a long time, months or year, we will often times as JandR do, take even lower offers but not by much. Being the slower dime advocates, there is a buyer for everything at some point and time. But even another 5 to 15% is BUILT INTO the price.
Then when we offer REE SHIPPING all of the above applies… It is “Shipping Included’ so we take the shipping cost [Say $15 for the item] and add it ON TOP of that $60 [so now $75] covering costs out to ZONE 6 zip codes, then let the item price go through all of the same levels of discount, still ending up in the same final sale price of about $45 to $50, again right where we want to be in the first place, but with the benefit of the Buyer “THINKING” he got “FREE SHIPPING” to Boot.
Now yes, the Ebay FVF, store costs, and all of the expenses come into play at the end, but that gets into NET PROFITS which is why we bump up the Selling prices so high.
To end, this does exactly what Stephen is saying, this keeps everyone from being engaged in a race to the bottom. We are actually increasing the overall market place value of the market for the item. We are actually helping all sellers to increase their profits IF they will adopt the “RACE TO SEE WHO CAN SELL AN ITEM FOR THE MOST” instead of for the least.
Value added either “Real or Perceived” is the race we want to win, striving to be the one who sold for the highest price.
And don’t forget that your net profit is to be found in two places. One is in what you pay for the item and two is in the spread from that purchase point to the point of final Sale Price. Buy for a $1.00 and sell for $100 not buy for $75 and sell for $100. Always be listing sure, but always be trying to drive the actual cost of your inventory down.
My wife Susan worked for Pfizer Corp. years ago when they owned Coty Cosmetics. The cost of a packaged tube of Lipstick that hung on a Kiosk in a store was $6.50 per package. The lipstick costs to make was $.01 per unit, the metal or plastic twist tube holder was $08 and the blister package and printing ran she said about the same per unit. So, item unit cost of $.17 per item and sold at $6.50 or approx 38 times the cost to produce.
The problem we see online, especially Ebay is there are so many newbies and those not knowing their gross and net numbers and getting fooled by other lower priced items by those who think buy for $1 and sell for $1.50 then others see those in the comps and think they should compete. OR, that many times those comps are for items that were listed as Auctions and sold for the low starting price. We never include anything sold on an auction in our searches for comps sold.
Hope this helps in giving those mulling over pricing methodologies something to maybe think about. Not saying to follow us, we just believe in buy low sell high, use our brains and not our backs, sell less items thus less to pull-pack and ship BUT YET MAKE MORE MONEY by following our own process.
mike at MDC Concepts, Inc. MDC Galleries, Collins Creek Collections and SmartParts Small Equipment Supplies
The team: Susan, Lisa, Christie, Karen, Kim and Michael
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Mike thank you for your well written and detailed post. I plan to experiment with you formula. I tend to price high myself, and think my higher price “pulls up” the price on lower priced listings. I have not measured this or documented it, It is just my gut feeling.
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Yes, I agree. Thank was what I was trying to say in the “wall of next” reply. If many quick listers or newbies are looking to see what things are “LISTED AT”, then my higher pricing before a Sale is placed would hopefully make them think to price higher also.
mike – mdcgfa
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For that item in particular I would keep the price just below the average. Only <span class=”BOLD”>114</span> sold in 90 days and there’s 193 active listings. If you have infinite storage room, then you could price high, but buyers will still be sweeping up the cheaper listings and new ones will take their place. The real question is whether you want to make $25 months/years/decades from now, or $15-ish in the next few weeks/months?
But that’s just my opinion as someone who doesn’t sell antiques or anything like them.
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Aahh.. Indy Sales. The Fast Nickle Approach as Jay calls it.
Yes indeed and agree. I looked on worth point and only one has sold for over $40 by itself. It seems like it is more of a souvenir type item. 333 Sold ones and the ones that seem to match these design styles all under 45 down to $10.
Yes when there are many, many currently listed items then unfortunately you are in the “soup mix”. That mix includes sellers who have pricing methods all over the place. We usually look up most of our items prior to purchase at an auction preview or during the walk through at estate sales. We don’t do many yard sales because we don’t find many $50 to $100 dollar and up items. At least for the the amount of yard sales we have to go to.
We currently have 1,185 items and 632 are all priced over $50. We bought into Jay’s statement years ago of trying to find higher dollar items so we could work less. I am almost 72 years old, been doing this since 2002 on another account and my wife is 69 and just gotten over a whole year of cancer chemo and radiation treatments so she can’t help me much. So it’s me and helpers so we really need to have more expensive items and handle less inventory.
mike – mdc galleries
Collins Creek Collections
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Thanks everyone, especiall Mike!
I am way underselling myself. I used the zook example because it was the exact same thing I had so it made sense, but most of my items have less competition, which helps with the asking price.
Right now I only promote 2%. I’d love to promote at 5% and raise prices.
1.60x makes a lot of sense. Thanks Mike for the breakdown.
Looks like I’ll be upping all my prices tonight!
Lauren
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My “system” has a lot of feel in it but basically I look for comps in terapeak over the past year, go somewhere near the highest sold price (if my condition is worse I might knock it down 10%, if it is a hard to find item I might go up 10-30% over). I list it without make offer. After 2 weeks, if something hasn’t sold and I can send an offer on it, I will, usually around 15% off. After a month or more, I send out 20-25% off offers whenever I can.
Every so often I’ll go and bulk add “make offer” to items that are more than $20 that have been in my store for a month or more. As a result, at any given moment about 60% of my store is on make offer (20% new items aren’t, 20% cheap items aren’t).
That’s my method….
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Just an update to this- I am in the middle of upping all my prices. I’m going for 1.25% the highest BIN for the last year, accounting for a 20% off sale at all times and 5% promoted. I started last night and didn’t have any sales this morning, but kept working on it (I’m in the “G” listings now, working alphabetically) and just had some prints sell for $27 after having them listed for $15 literally two hours ago. Woohoo! Thanks team
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