eBay Pricing: Finding the Sweet Spot

Has this ever happened to you? You barely listed an item and in just a few short minutes or hours — it sells. You kick yourself as you realize you probably listed the item for a price that was too low. Or maybe you listed the item at what you thought was a reasonable price, but then it just sits. And sits. And sits. Cobwebs form, and you swear you just saw tumbleweed roll through your living room. Yep, you priced the item too high and no one is interested.

Finding the pricing “sweet spot” for an item is no easy task. Price it too high and it won’t sell. Price it too low and you feel like you’ve just given it away. Some sellers compensate for this by constantly adjusting their prices. This can backfire because if you raise the price and and a potential buyer has already seen it at the lower price, they may be deterred from a purchase. On the other hand, if you start high and gradually lower the price, your buyer may put off purchasing because they’re hoping the price will go lower.



Ultimately, pricing an item is not an exact science. There is a formula you can use (we’ll get to that in a moment), but if you take a stab in the dark and hope for the best, you’ll probably end up disappointed. Here are a few things you can do that can help.


Pick a price point and stick to it. Most brick and mortar stores do this, and here is where the formula kicks in. First, decide what percentage of profit you want to make on the item or items you sell. As an example, let’s say you want to make 20% on your item. You then take the price you paid, add your estimated marketplace and PayPal fees, and multiply that by 1.2, and you have the price for your item. Keep in mind that if you offer free shipping, you need to add it into your purchase price too.


Research “Completed Listings” of similar items on eBay. This gives you the going rate for what buyers will currently pay for your item. You can even narrow it down to display only “Sold Listings.” You can also use completed listings to get an idea of how many of the same item were listed. If you see there are a lot of sellers with the same unsold item, it can help you evaluate whether the item is worth listing at all.


Use the “What’s It Worth” feature on eBay. This neat little tool has a habit of appearing and disappearing when you are listing, so I suggest Bookmarking this link for easy access: http://cgi5.ebay.com/ws/eBayISAPI.dll?SellHub3. This tool, which is powered by Terapeak, is free — but has very limited information. If possible, you might want to pay for a subscription to Terapeak since it lets you quickly look at the buying trends for items as well as the selling performance for other sellers who are selling similar items. Since time is money when you’re listing, I find this to be an invaluable tool and well worth the cost.


This guest post was contributed by Kat Simpson. Kat is a trusted eCommerce author, speaker, educator, and entrepreneur. Kat Simpson has been a successful eCommerce merchant for over 10 years; is an eBay Education Specialist and Gold Level PowerSeller, as well as a successful Amazon merchant. Currently Kat is the hosts the popular weekly eCommerce Podcast That Kat Radio and an active Facebook Group ThatKat.

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