Small Business Basics Part 2; Product Price
Setting a Produce Price
First thing to think about is; What does the item actually sell for?
You can get an idea of the selling price for a used or new item on ebay.
Go and search an item, once you see the result of the search look
on the left side of the screen and you will see “Sold” click that.
Now your are looking at what the items have actually sold for on ebay.
This will be wildly varying but you need to get a feel for the average
selling price. The more you do this the better you’ll get at figuring
a proper selling price.
Making a Post
When I post an item online I usually start with the higher end pricing.
On ebay I always use the “Fixed” process not “Auction”. Sometimes I
will check “Make an offer” box but usually not at first.
If an item doesn’t sell in 1 or 2 months then I’ll reduce the price and
then check “Make an offer” box. I’m not too worried about sitting on an item for
awhile because I bought the item with my cash. I don’t use credit for inventory
so there are no cost to me for just sitting on it, consider it money in the bank
but maybe making more interest. After I have lowered the price for awhile and
the item still doesn’t sell then my thoughts are get my money back and reinvest
into something that sells faster. I usually can get the money I’ve spent back,
seldom do I have to take a lost but it has happened!
It is important that you don’t tie your money up too long.
It’s better to get back less and reinvest into something else.
Some don’t agree with this next idea but that is for you to decide.
Sell for less profit but maybe selling an item more often might be better.
I would rather make a dollar every month than wait a year to make a few dollars.
I call that the Walmart plan; pile it high, sell it cheap and keep moving.
Who has more money and bigger market share then Walmart, their doing something right.
Also consider McDonald’s marketing strategy. You can buy a hamburger everywhere
for $10 and you’ll get fries too. But what company sells more hamburgers then
McDonald’s? It’s for you to decide how you want to run your company.
I have friends that have a totally different approach to sell. They put a high
price on the item and then wait. They say waiting doesn’t matter because you already
own the inventory it doesn’t cost anything to wait. You can use your time doing
something else while you wait. They do make sales and each sale makes more
money with less work on their part. They could be right also, you decide.
I buy remote controls for about $1.00 sometimes more sometimes less but never
more that $3.00. I’ll sell these remotes from $5.00 to $20.00 with most selling
around $9 dollars. That is a very nice return on my money. All I have to do is clean
and tested it, take pictures, decide on a price then list it on the internet.
When the remote sells I put it into a bubble mailer and ship it for around
$3.00 which the customer pays for. Always know your shipping cost before listing
an item. Small things ship cheaper from USPS while larger heavy items usually
ship cheaper using FedEx or UPS. Another consideration is the distance an item
is going. A heavy item going somewhere in the same state will still ship
cheaper using USPS.