Most new sellers don't realize how crucial pricing is when it comes to eBay auctions. Many don't even realize that pricing needs to be done. eBay is an auction site after all! But eBay auctions are not quite the same as the auctions you go to in the 'real' world. In fact, quite a bit of effort goes into estimating and fixing prices.
Essentially, there are just three prices that can be set for an eBay auction: the 'buy it now' price, the 'reserve' price, and the 'starting bid' price. Of these three, the starting bid price is the only one that is required for an eBay auction. The reserve price and the 'buy it now' price are an option.
The 'starting bid' price is relatively simple. Never set it more than $50 or so, no matter what your item is actually worth. This low opening price will get bidders to your auction. Setting low 'starting bid' prices creates the demand for a 'reserve' price.
A 'reserve' price is the very lowest price that you would like to get for your item. You may sell the item lower than the 'reserve' price, but you will not be asked to. In other words, if you set your 'reserve' price at $100, and your 'winning' bid is only $50, you do not have to sell the item to the 'winning' bidder. You can close the auction without any negative feedback or repercussions.
Set your 'reserve' price at the absolute rock-bottom price you are willing to sell your item for. Keep what the item is worth, as well as what it cost you in mind. The 'buy it now' option will let you to set a price, and buyers can buy the item instantly, without bidding, for that set price.
This option can be utilised for any type of item, and it should be set to equal your reserve, give or take a few dollars. This option is ideal if you have multiple identical items to sell in the auction. Shipping has a price, and possible buyers take this into consideration when they are looking at an auction. If you can see your way clear to give free shipping, you will find that visitors are placing more bids.
Ensure that your potential buyers realize that you are offering free shipping! Prior to setting any prices, you need to establish what the item is actually worth. The value of the item in different markets may be quite high. However, you are selling on ebay, and it is a different world altogether! Search out the price that similar items sold for on eBay auctions before setting any prices. If it is a collectable, or a high ticket item, have the item evaluated to ensure that you aren't going to lose money!.
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