posted on January 5, 2007 05:57:34 AM new
On the fee hike thread is a good discussion concerning pricing. Since price is a key buying criterion and an important part of your strategy (especially in relation to image and other intangibles), let's discuss our pricing.
In industry I used to look for the space between the elephants toes. Meaning, I would see what the big guys priced, look for markets they found unprofitable to serve (due to their overhead) and price in line with the giants. I would see competitors come and go because they confused low pricing strategy with a low cost strategy.
On eBay it is an interesting challenge. Price is still important to image as is shown by one of my competitors, Period Paper. This company (who, by the way, have won two eBay awards) entered the ad market via a HIGH PRICE strategy and substantiated the strategy by creating a beautiful web site and a phony certifying agency for their ads. Basically the man who started Period Paper also owns the domain that grades and certifies the authenticity of his ad. I have seen him sell a 1936 Fortune magazine ad for $35 that was available for .99cents.
One of the favors this company did was raise the high end price thus making it available to many of us. My very rare ads are priced in the $35 to $20 range and sell. However, to justify raising all my prices, I had to move one line of my ads out of the store. Historically, these ads sell very well, but at $4.50 to $8.
So, we opened a bare bones store for these items, of which we have multiples and priced them accordingly. We also took a page from the FLUFFY manual and raised shipping. Paper is light enough that we can combined shipping (el shipping combino okayo in fluffy speak). We emailed everyone who buys those items and moved them to the new store. We have listed 1910-1919 and have 40 more years to go. That shop is making money. No vendio, no services except ebay and paypal.
So, sorry for the long diatribe here, but, question is: pricing. What is good for you and any tips for others?
posted on January 5, 2007 08:07:42 AM new
Also ebay stores may be phased out to bring back the magic of auction.
Also shippping fee may be included in computing FVF.
posted on January 5, 2007 10:31:50 AM new
The day they (Feebay) include the shipping for FVF cost, is the day I walk away and never look back. But if the selling prices and sell through rate was to increase 100 fold then I might say that is ok. But not the way it stands at present.
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posted on January 5, 2007 11:32:43 AM new
Ebay could use one rate to compute FVF for the item and another rate to compute FVF for shipping of that item.
If you have an item at 99 cents and shipping of 35 dollars,what are you selling>Phone book??
posted on January 5, 2007 03:37:35 PM new
I think you have hit the nail on the head, that pricing, while important, is not necessarily the most important element in the marketing mix. You will always have the price-conscious buyer who makes buying decisions based on price alone (and they seem to gravitate to eBay for some reason), but then you also have those who buy on other reasons - service, image, prestige, perceived benefits, limited quantities, etc. Cater to those folks and you can command a higher price.
I find it interesting that you have chosen to separate your stores based on price and "prestige." Is the profit margin higher or lower than the ads in the lower-priced line?
I have found that I have some lines in bedding that are consistent sellers, but everyone carries them so price has to reflect that and be reasonably close to what everyone else charges. But I also try to find items that not everyone else has or that have a higher price point. I have separated stores by niche, but had not thought about separating out by price point.
posted on January 5, 2007 08:01:14 PM new
One of the things I learned from my first sales jobs (working for an intuitive brilliant mentor) was the need to find the "sweet price" - items priced too low or high don't sell well. He experimented with prices locally before he took them national.
posted on January 6, 2007 06:04:28 AM new
Profit margins!
I don't aim for a particular profit margin, magazines (as mingo notes below)and trade journals have hundreds of ads. You may get the product for anything from $0 (had my neice give me her grandfather's medical library...fun opium and heroin ads from 1900-1924) to $100 (great Fox Film Salesman Book).
Instead, I try to get a ROI (return on investment) from each magazine/book. On my cheaper site, I can harvest $500 - $600 worth of ads from a $50 book (bound volume of journals or magazines).
From that book, I know that certain companies: Harley Davidson, Graybar, Toledo Steel will easily bring $9.99 in my store or at auction, a single ad may bring up to $54 (1920's era Harley ad with GA state Police).
On my eBay Vintage Ads site, my hottest selling areas are autos, soda pop and theatre. Again, knowing your illustrators, brands, etc. will help in pricing and location: store vs core (with or without BIN).
Knowing who collects what allowed me to put ads in core that brought over $100: Johnny Farrell golfer in Palm Beach suit ad; Squeeze Soda Ads (very rare and hard to find from the 1940's) and Useppa Fl ads (a couple of buyers in Fl bid each other up when I have an ad they don't have).
I married my wife for her looks, but Not the one she gives me lately! 