Tuesday, October 26, 2010

Why 99 Cent Auctions Don't Work on eBay Anymore

Years ago, when eBay first started, the only listing type was auctions. Now we have fixed price, store inventory, best offer, and second chance offers. Buyers are not forced into participating in an auction if they want to buy an item.

The old philosophy used to be, “Start the listing at 99 cents, get the bidders involved, and watch your price sky rocket.” This does not happen much anymore. And I am doing damage control with many clients who follow this outdated advice.

Here is why 99 cent auctions don’t work effectively anymore:

1. There are many other ways to buy items on eBay. Auctions aren’t the only choice.

2. Buyers don’t want to wait for an auction to end so they will buy from your competitors who offer the item at a fixed price and they “but it now.” If you aren’t offering fixed price to appeal to these “in a hurry” buyers, your competition does, and buyers will gravitate to your competitors. Furthermore, Amazon continues to grow and all items on Amazon are "buy it now." If a buyer can't find it on eBay at a fixed price, they will go to Amazon.

3. As a result of #1 and #2, there are fewer bidders in the bidding pool to drive up the price of auctions.

4. Consequently, your item does not get very many bids, and sells at a lower price than you would like.

5. More sellers are using research software to determine the listing type that brings the highest average price. Many times, fixed price listings bring a higher price so sellers use the fixed price listing instead of an auction.

The solutions:

1.Use Terapeak to determine the listing type that brings the highest average price.

2. If Terapeak says to use an auction, start the bidding at your rock-bottom price. Even if you only get one bid, you will get the price you wanted.

3. 99 cent auctions can work in some situations if a seller is very familiar with how a product performs over a period of time, or if you have a hot item such as the hot holiday toy or concert tickets limited in number. This is not a strategy for beginners. Wait until you have more experience with a product before using the 99 cent strategy.

For more discontinued item you can sell on eBay for profit, check out my latest Hot List.

Know when to sell on eBay
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