Wednesday, March 16, 2016

In Praise of Auction Selling on eBay

I’ve always liked auction selling, more so than listing products fixed price and there are several reasons why. 

For one thing, auction is a great way to determine the value of an item you haven’t sold before and which no one else has offered recently on eBay.  That being the case you can’t do an advanced search for recent listings for similar items to see how much they fetched.  So you run an auction and let bidders say how much your product is worth. 

Another good use of auctions is to generate a bidding frenzy between two or more people placing bids much higher than they originally intended, not merely to win the product but to stop someone else having it.  Yes, it does happen, and no, I don’t know why.

Then there’s a reason that has more to do with fast turnover of goods and never having to pre-test or guess selling prices or dispose of stock at a loss.  This technique works contrary to the way most sellers source and list products on eBay, typically by buying in bulk at wholesale discounts and using a fixed price multiple product eBay listing.  Some sellers do but most sellers don’t test prices by performing several different priced offers before running long-term promotions.  And that sometimes means sellers lose out on potentially higher prices and bigger profit margins for their products.

The better way is to obtain one unit of product, on the high street if necessary, then you run an auction with a starting price matching the lowest profit you need to make after all acquisition and selling costs.  Run a ten day auction to optimise viewer and bidder numbers. 

One of three main things will happen:

(i)  No one bids and the product goes unsold.  You can check your listings for mistakes and oversights which when corrected might generate bids and sales.  If none exist you will probably drop the product and use it yourself or sell it off at a loss.

(ii)  Only one person bids and you make a tiny profit, suggesting the product is unlikely to be a regular seller. You’ll probably do another few test runs just to be sure.

(iii)  Lots of bids ensue, some much higher than your minimum acceptable profit price.  So you send the first product to your winning bidder and you submit Second Chance Offers to some or all unsuccessful bidders whose bid achieves your minimum acceptable profit.  When Second Chance Offers are accepted you obtain sufficient stock to fulfil orders, plus another couple of units to relist the product on eBay.  Use the same starting price as before and see how many bidders emerge and how far prices go.  As before, fulfil your winning bidder’s order and submit Second Chance Offers.  Rinse and repeat one more time.

After the third auction you’ll have a good idea if your product is a likely long-term regular seller, as well as knowing what the majority of people are prepared to pay for it and what level of inventory to carry without overstocking or running out of product and delaying delivery. 

From thereon you can use multiple product fixed price listings based on the optimum price from your combined auction listings, both cutting your eBay listing fees and allowing your listings to develop a sales history to help them rank higher in eBay search returns.

Learn more about Second Chance Offers at:

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