The whole world is getting into the e-commerce game, and eBay has a significant share of that market. With approximately more than 300 million active users worldwide, eBay offers plenty of opportunities for sellers to grow their business and make money. But all these opportunities come with tedious tasks.
If you are a new seller, it's a must to upload high-quality photos and clear and detailed product descriptions. On top of it, you must offer competitive pricing to attract as many customers as possible.
The price of an item is one of the critical factors buyers determine whenever shopping online. Though, eBay pricing is a tricky subject to discuss. Many sellers think that if they list their item for $0.99, they will get more buyers and make more money than if they priced it at $1.00.
How you price your items on eBay can make or break your success. But don't worry! We'll help you figure out the best pricing strategy for your listings and other things to consider to help your listing stand out.
Why Your eBay Pricing Matters
It's always important to think about your price when listing an item on eBay. Pricing is not just a question of what someone will pay for the product but also how well it will sell. If you list an item at too high a price, buyers might skip over it and go to one priced lower. On the other hand, if you set your prices too low, people may be less likely to buy because they expect the item to have lower quality.
Setting the price of your item just right helps get the attention of potential customers and increases the likelihood of their purchase. But for new sellers, how can you ensure your prices are profitable enough? For starters, you can do some research to see similar listings with your product to figure out how you can compete with your competitor's price.
Aside from it, we also listed other factors you can consider and other pricing strategies you can do in setting the price of your items correctly.
Factors to Consider in Setting eBay Selling Prices
Many factors affect the pricing of an eBay listing. eBay is home to over 1.6 Billion live listings. From accessories to luxury goods, you can find almost anything here. If you are new to selling and are still determining your selling prices, here are the five factors you must consider in setting your eBay selling prices.
eBay Selling Fees
The first thing you must consider is eBay's selling fees. Listing on eBay is free, but only for a certain number of listings. As a seller, you must be well aware of how much it costs to sell on eBay. Their basic fee structure is composed of the insertion fee and the final value fees.
The Insertion Fee
If you are one of those casual eBay sellers with less than 250 listings, you don't need to pay the insertion fee. Listings are free, and you will only get charged when you sell an item. This fee is only charged to sellers with more than 250 listings per month.
In comparison, power sellers or those sellers who list more than 250 listings per month need to pay a $0.35 insertion fee per listing. If you are one of those sellers with many items in their closet to sell, you might as well consider the insertion fee to your final costing price.
Final Value Fees
These are the fees calculated based on the amount of your sale. This includes the cost of the item, shipping, sales tax, and other applicable fees. The calculation of the final value fees also depends on the product category of your sold item.
In most categories, 12.9% of sales up to $7500 are charged per item. Plus, 2.35% on the portion of sales over $7500 and a $0.30 per order fee. Understanding the basic structure of fees for selling on eBay helps you set the price right without losing any money.
After understanding eBay selling fees, it's time to decide who pays for the shipping. Would you like to offer discounted or free shipping to your buyers, or are you letting them pay for the shipping fee?
Deciding who pays for the shipping fee lets you determine the price of your items correctly. If you are selling premium or high-value items, it's better to offer free shipping to speed up the buying decision of the undecided customers. Often, buyers are easily persuaded when they see a good deal or free shipping.
Otherwise, you can still offer competitive shipping costs if you are not willing to offer free shipping. Here are some helpful tips for deciding how much you should put on your shipping fees.
- Check how much other sellers are charging for similar items. Try to research each courier's fee and try to compare its fees.
- You may consider adding the shipping fee to your item's final price, then offer free shipping.
- Always base your estimated shipping fee using the shipping calculators from various carriers.
- Decide if you want to offer international shipping or just within the US.
- You may consider putting a fixed shipping rate for all your buyers if shipping locally. You may also use calculated shipping and accordingly charge the buyers based on their location.
Condition of the Item
One key factor in considering the selling price of your item is its actual condition. Are you planning to sell used items? Is it used but still in good condition? Or are you selling new products? Lower prices are typically associated with used items and higher prices for new or like-new items.
Determine which one you are planning to sell. If you plan to sell gently-used designer items, try to research their market price first. If it is a limited edition, you can list it as an auction type, or if you already have a price in mind, list it with a fixed price.
Remember that you must not take a loss from the item you are selling. If you are still not decided on the price you are willing to put on your item– better not to sell it yet. As a seller, we want to make the most out of our items.
eBay allows sellers to choose their pricing strategy. There are two listing formats available on eBay. The Auction-type and the "Buy it Now" or the fixed price listing. We'll break it down for you to better understand how this format works.
Auction-type listings are often used to sell highly-anticipated, high-demand, or limited edition items. Examples of these are rare sneakers, high-end streetwear, and other collectibles usually sold out from its physical stores.
One of the advantages of having an auction-type listing is that the market determines the sale price. When setting an auction-type listing, select your "reserve price" or the minimum price you are willing to sell your product.
You may start with a low price and wait for buyers to begin bidding. When the bidding ends, yet you still did not get the reserve price, you may re-list it again with a lower reserve price– or maybe it's not the right time to sell it yet.
Another option you can choose if you plan to sell your items quickly is by using the Fixed Price Approach. This way, you no longer have to wait for buyers' bids and give a chance to buyers who would like to buy the item at its listed price.
Fixed price listings are the "Buy it Now" prices you often see on a listing. If you are already familiar with the market price of your product, you may consider this approach. If not, better do quick research before entering your fixed price amount.
For slow-moving items or items that you want to de-clutter immediately, you can include a "Best offer" option. This feature allows buyers to submit an "offer price" on the amount they're willing to pay for your product.
If you receive a price lower than you are willing to sell your items, you may make a counteroffer. State the amount you are ready to sell your item or negotiate with the customer until you agree to its final sale price.
Lastly, your sales must have enough margin to allocate for advertising and promotions. Remember that the competition on eBay is high due to its large market. Consider utilizing the eBay promotions manager if you want your listing to stand out.
eBay lets you customize discounts, coupons, and deals to encourage buyers to spend more from your shop. This also helps improve your store's visibility and move your inventory faster. You can set up your eBay promotions in three simple steps:
- Access the promotions manager in the Marketing tab under Seller Hub
- Customize and choose which offer you would like to provide to your buyers.
- Launch your eBay promotions. Set an end date for the campaign you started, then click "launch" to create your promotions.
Make your listing stands out and attract more potential customers with these different types of promotions:
- Order Size Discount - The type of discount that incentivizes buyers when they spend more in your store. (i.e., Buy 1 Get one sneaker at 50% off)
- Markdown Sale Events - The type of discount where you create a markdown on products under their categories (i.e., Save up to 20% on spring collection)
- Shipping Discounts - The type where you offer free or reduced-price shipping fees to your buyers when they spend more. (i.e., Free shipping for orders over $59)
- Coded Coupons - The type of discount you create and share your codes that buyers can apply before checkout. (i.e., Thanks for your purchase! Use code "Welcomeback5" to get $5 off your next order.)
- Volume Pricing - The type of offer that incentivizes your buyers when they buy more quantities or in bundles by setting a minimum order quantity. (i.e., Save 10% when you buy three women's apparel.)
A rule of thumb for new sellers when setting a price is to always add up to 30% of the minimum amount you are willing to sell your product. For example, you are eager to sell a sweater for $10. Better priced them at $15, then offer free shipping. In this way, you no longer have to shell out extra money to pay for the shipping.
Providing allocation for your promotions also protects your margin if you want to offer deals and discounts to your buyers. Plus, having a slash-off attracts more shoppers as they think they are getting the best deal out for their money.
Do's and Don't in Setting an eBay Pricing
Setting your price is one of the most complex and tricky processes to understand. We listed some of the best practices new sellers can follow to help them set up their eBay selling prices effectively and adequately as well as things to avoid when deciding on their listing price. Here are the Dos and Don'ts in setting an effective eBay pricing.
DO: Consider building your prices with shipping or the discount you're willing to offer
One of the power sellers' best practices when setting their prices and offering discounts or free shipping is adding the amount to their final pricing. For example, you are willing to sell a used but good condition sneakers for $25. You may list it for a fixed price of $28 and offer free shipping. Or you may bundle it up together with your other sneakers and offer a volume pricing wherein if they buy two sneakers, they will get an additional 10% off.
DON’T: Price your item lower than you are willing to sell it to beat your competitors
Most new sellers price their items lower than their competition in hopes of selling them faster. However, many shoppers are very doubtful of this strategy. Low price items are often associated with low or poor quality, and many customers no longer fall for that. Many consumers nowadays would prefer to pay higher than to receive low-quality items.
Plus, a low-priced item also means low profits for you. Considering other factors, such as eBay's final value fee of up to 12% in most categories. You may take home none or even shell out some money instead of making sales.
DO: Make a spreadsheet and include all your expenses in your eBay pricing.
More than just looking at your profit, you must also consider the total amount of your expenses for your product. Make a spreadsheet and enter all other relevant expenditures you spend for your item. Include the product cost, cost of your packaging, shipping rates, time spent, and your markup.
Remember that more than the actual cost of the item, you also spend time and money before it gets to your customers. Always include this in your final sale price to make sure you're not losing money.
DON’T: Set your final sale price based on estimation
Calculating, taking notes of your expenses, and adding it all together can be a headache for most sellers. Plus, you must also consider other charges from selling on eBay. You may be considering just making assumptions or estimations on your final sale price with all these factors.
No matter how hard it may seem. Try not to base your final sale price on estimation. You may unknowingly lose more money than you think, and you will not be able to monitor how much profit you are making. You may do quick research whenever you are unsure of the amount or use available pricing tools to help you automate your eBay pricing.
DO: Only accept "offer" you are comfortable with
New sellers often get excited when they receive offers from customers interested in buying their items. But some buyers are low-balling sellers and ask for unreasonable demands such as free shipping or free items.
Remember that it is okay to decline an offer from your buyer. Try to negotiate it to the amount you are comfortable with until you both agree on the final price. If not, simply decline and communicate to other interested buyers.
DON’T: Only consider one pricing strategy
New sellers may only stick to or consider one pricing strategy than explore other methods that may work for their shop. Remember that testing out different pricing strategies can help identify the amount your audience is willing to pay.
You may include the "Best offer" option to encourage buyers interested in your item to know how much they are willing to spend. This can also help identify the consistent price consumers are willing to pay for a product that you can consider as your selling price.
Sell More with OneShop
Setting your price right on eBay isn't an exact science. But with enough knowledge and understanding, you can set up the right price your customers would love, and your wallet will thank you.
Fair pricing is important to eBay. OneShop knows how valuable it is for sellers to set their prices right on eBay and make the most out of their items. While there is really no correct formula for setting how high or low you want to price your item, having the proper understanding and strategy is the key to selling some of your valuable items to make more money.
One of which is cross-listing. At OneShop, you can quickly draft a list and cross-list it to eBay and other sites OneShop supports to improve its visibility, connect to more potential customers, and make more money.
Plus, our app community lets you learn some of the best practices other sellers do to price their items right– not just on eBay but on other marketplaces too. Our growing community helps sellers connect and learn tips and tricks to help you manage your pricing right, so you don't have to worry about setting your prices next time.
Try it yourself, register for free, and try our exclusive tools free for 7-days with no commitment and credit card information required! See the difference OneShop makes for your reselling business. Visit https://tools.oneshop.com/ to learn more.