Long-time sellers or not, eBay users like you, may be wondering how auctions work on the giant e-commerce site and if it is better than fixed pricing. After all, the main goal here is to maintain profit growth.
Now, both formats have their benefits and disadvantages. It all boils down to what you are selling and how you will use the format to its maximum potential.
Identify the best format for you.
First, you have to determine what type of item you want to sell. You can categorize your items into essentials and non-essentials. The former can include basic household items such as living room furnishings, kitchen utensils, bath towels, batteries, and the like. These items are almost always needed right away, and buyers can immediately get their hands on them.
They are the opposite of non-essentials which cover antique home decor, vintage furniture, designer pieces, and similar. This means buyers don’t need to have them right now for their personal or home use. They can wait for a while until these get delivered to their residence.
Determining your item helps you know whether you will sell them as “Buy It Now” or BIN or have them up for auction. Most items under the latter category are special ones worth bidding for. Examples are vintage decor or limited edition designer bags. Rather than selling them for a fixed price, you can have interested buyers name their prices. This gives you more chances of earning more for a valued item.
How do auctions work?
Let’s say you have categorized your items, and you have a one-of-a-kind, Mid-Century Modern wooden table that you want to sell. In the interior design world, this style is popular these days. Naturally, you would want to sell this type of furniture at a high price.
Rather than listing it at a fixed price, why not put it up for an auction? After all, the demand for it is high. Buyers are interested in having trendy furniture in their home that can go timeless in a few years.
eBay auction-style listing works like any other physical auction. A seller names their starting price, and buyers keep bidding for it. The listing or auction can go on for exactly 1, 3, 5, 7, or 10 days. After it ends, the one who bids the highest wins. They pay for the item and then have it delivered to their residence.
There are two (2) ways to join an auction. One is to stay on the eBay website and keep track of the auction in real-time or live. This means the buyer keeps bidding while watching the selling price go high because of other potential buyers.
The other way is to do Automatic Bidding. The buyer sets the maximum price they are willing to pay, and eBay will take care of the rest. The platform bids in increments on the buyer’s behalf to keep them on the lead while keeping in mind their maximum price. Take note that increments increase as the selling price increases.
As a seller, you have control over the bidders. You can set up buyer requirements where you specify criteria for factors such as excluding certain locations for your item deliveries, mode of payment, and whether you allow an eBay user with poor feedback to join. For the last one, you can opt to block them, so they cannot join any of your future auctions and never come across your account again.
When a buyer makes a mistake, say they initially wanted to bid for $340 but placed $34, they can retract it. They also have the option to do so if you, the seller, significantly changed the item’s description. This includes suddenly revealing that the item or product has flaws (scratches, hairline cracks, chipped, etc.). This is why you should always be honest and thorough with describing items on your listing.
Sellers can also cancel a bid for the following reasons: a buyer requests it, so the item is no longer available, or you made a mistake on its listing, and when you think a bidder is a fraud.
You can cancel the bid here. Enter the item’s number, the bidder’s username, and the reason for the cancellation. As long as it’s valid, there wouldn’t be any charges against you.
Setting the Price
In any auction, the seller has to name the minimum cost for which they are willing to sell the item. On eBay, this is called “reserve price,” which is shown only when met. This means it is automatically private or hidden from potential bidders. However, you have the option to reveal it in the product description or tell it to a potential buyer who messaged you.
Having a “reserve price” protects you from selling your item short or less than what it is worth. This is recommended, especially when you are uncertain of the item’s true value.
The best practice is to research the market first. Look up listings of items similar to yours from other eBay users and other e-commerce sites. This helps you give a general idea of how low or high your item can be sold. You should also check how much it was sold for at the time of its release. For instance, if you auction a Gucci Ophidia camera bag, research how it initially cost. In this way, you can gauge your “reserve price” or starting price for it.
You may also opt to use eBay’s tool “Terapeak,” which gives you data-driven insights to help you sell, at what price, and when to sell it.
To add a “reserve price,” simply go to your item’s listing, click “more actions,” and then “reserve.” Enter your price, then select “continue.” You can change this after, but only when any bidder hasn’t met it and if there are still 12 hours left before your auction ends.
Second Chance Offers
A seller or a buyer can do this when the “reserve price” hasn’t been met, the winning bidder didn’t pay, or when there are more similar items available.
As a seller, you can make a Second Chance Offer to a non-winning bidder such that they will get the item at the last price they bid for. But first, make sure to cancel the initial transaction with the winner.