eBay Pricing strategy - By Sunil Tanna

When you first begin to sell on eBay, you probably will not immediately realize just how important pricing is. In fact, many new eBay sellers don't even realize that "pricing" needs to be done at all! What happens is if you over focus on the auction process at eBay, and how to attract bidders, you can easily forget that pricing plays a very important role in the site.

When you sell an item through an eBay auction, there are really are three (and only three) prices that you need to think about:

1. The "buy it now" price.

2. The reserve price.

3. The starting bid price.

The first two of these three are in fact optional, and the starting bid price is the only one that is required in order to initiate an eBay auction.

As far as the starting bid price is concerned, the key thing to remember is that you want to attract bidders. Lots of bidders. Because the more bidders you have, the higher the final selling price is likely to be. Thus, it's usually a good idea to set this price to a low value - $50 is a good upper limit, no matter what your item is really worth.

The most important price, especially since you have a low starting bid, is the reserve price. The reserve price is the absolute lowest price that you want to get for your item, and is your guarantee that you will never be required to sell your items at a loss. eBay does give you the option to sell the item below the reserve price, but it will never require you to do so. In fact, if the highest bid is lower than your reserve price, there are absolutely no negative consequences whatsoever from deciding not to sell item.

Furthermore, what can happen if you have no reserve price, is that scammers can use two eBay accounts in collusion to get your item for much less than the real-value: The first account bids very low, the second immediately bids high to deter other potential bidders, and then immediately before the end of the auction, the high bid is cancelled or withdrawn. However, setting a reserve price, will protect you from this particular eBay scam.

The last price to consider is the "buy it now price". If you choose to enable this feature, visitors to your auction will see a "buy it now" option that will allow them to buy immediately, without bidding, at your chosen price. You can use this feature for any type of item, but it tends to be most useful if you are selling multiple identical items, or items that you are drop shipping.

One final thing to remember is that hipping has a price, and potential buyers will take this into consideration when they are looking at your auctions. Your item description should therefore should make clear any shipping costs associated with your item. If you become an eBay regular, you might want also experiment with offering free shipping - you could be surprised at how many extra bids this can trigger.

Of course the prerequisite to choose the right prices to sell at, is knowing what your item is worth, or, at the very least, what it cost you. For recent purchases, or items that you are drop shipping, you probably already have a very clear idea. On the other hand, for highly unique items, collectables, and high ticket items, their value may not be so clear: for these types of things, it's probably best to seek a professional valuation before you list them on eBay.

For more auction articles and product reviews, please visit http://www.guide2auctions.com/