Q&A about selling on eBay - Pricing and more

Below is the text of an e-mail we received that has questions many others may have, so here you go! (personal identifying information of sender has been removed)

Questions

Hello, 
I grew up (long ago)shopping at yard sales and flea markets but I am new to learning how to make money selling on ebay. Right now I have about 60+ items listed (daily adding more) and not making many sales. Here are a few questions that I hope you could talk about regarding pricing, etc.
How do you go about knowing what to price your merchandise for when prices can vary greatly? how long do you wait before lowering the price? Which items work best auction style? If you don't have many sells yet,you don't need an ebay store, correct?
How much inventory will I have to have before I start seeing consistent sells? Should I bypass items that will only net $5 and look for high return merchandise only? When things aren't selling is it because its overpriced? At this point, Every penny counts right now so I have VERY little money to put into inventory and not see a return on the money for a very long time. Thanks for any information.

Answers

Note - all these are our opinions based on our own experience. There are lots of different ways of succeeding on eBay and other online venues. This is just how we do it.

Thanks for contacting us! I checked out your store including completed listings and items described in feedback. What I have learned over the years is that eBay buyers are EXTREMELY brand driven. When I started selling clothing, I visited a local thrift outlet where everything is $2 or less to get my feet wet. I usually went on the $0.50 per item day, and loaded down with alot of men's golf shirts and women's nice career clothing. Most of it I ended up giving away... I can help you strategize if I have a better understanding of where you are looking to get inventory. Where we live, there are garage sales year-round, and we used to shop garage sales exclusively, but have been doing almost all thrift store purchases for years. However, we live near a large city, and most of the thrift stores are concentrated near cities. If you have access to thrift stores, that would be my recommendation. I can help you route plan if you just let me know your zip. 
Regarding clothing - selling clothing is somewhat different than other things. It tends to stick around MUCH longer than non-clothing. When I have access to very inexpensive clothing (like the thrift outlets, some garage sales, or the weigh-n-pay outlets), I will sometimes buy clothing I wouldn't buy at the regular thrift stores, but overall, I try to stick to the higher-end stuff, because clothing takes a lot longer to list to make the sale with the pics and measuring. I have some really nice clothing I've had super cheap for a loooooong time. I'm about to lot it up just to get rid of it. 

If you are looking to make quick money, I recommend staying away from clothing unless you know high-end brands. It was a huge learning curve for me, as I have bought my own clothes in thrift stores for years, never looking at labels. I can definitely give you some clothing tips, but it is not the way to make quick money in most cases. I'll forgo the clothing tips for now, but please let me know if you would like more :-)

Prices tend to vary greatly but mostly on clothing and can be due to a variety of factors. I picked a random listing to investigate - the ZXXXXX jacket. Based on the completed and sold listings, I wouldn't expect that to sell for more than about $20. In determining prices I always check the completed listings, but first and foremost to determine if I am going to buy something. For example... Ferragamo shoes are a high-end brand, and I used to buy nearly every pair I found. Some pairs (Vara bow style) are great money, but most are not (women's.... men's there are more styles that are desirable). I found a pair of Ferragamo pumps earlier today... beige/nude with a signature bit. I search for Ferragamo, then check completed, pre-owned, heels (classics, pumps), beige and get this.... http://www.ebay.com/sch/Heels-/55793/i.html?_from=R40&LH_ItemCondition=3000&%252C%2520Classics&LH_Complete=1&_nkw=ferragamo&_dcat=55793&Color=Beige&rt=nc. There are 574 completed listings.... now I will check Sold, and there are 184 http://www.ebay.com/sch/Heels-/55793/i.html?_from=R40&LH_ItemCondition=3000&Pumps%252C%2520Classics&_dcat=55793&Color=Beige&_nkw=ferragamo&LH_Complete=1&LH_Sold=1&rt=nc&_trksid=p2045573.m1684. The prices vary by style, so I look for the closest style. They looked like they would not be selling for more than maybe $20 or 30 if at all, and so I did not buy them for $7. There is a lot to say about clothing... brands, styles, nuances. 

Mainly... I would say your stuff isn't selling because it's not what people look for on eBay. Anything that isn't in high demand (determined by reviewing completed listings), would need to be priced very competitively to sell. I don't generally buy for the collectibles category either, because it's also a slow market and there are many variables. 

In my opinion, the buying strategy is more important than the selling strategy. It will not make much of a difference in your sales if you have 60 or 160 items if they are not the things people are looking for. 

Do you have a smartphone? This will save you money, time and trouble. I look almost everything up before I buy it. This keeps me from needing a giant storage space or having to manage a large, stale inventory. 

Our target profit margin is usually 4-10 times our inventory cost (the lower end for clothing and higher priced items). We take advantage of sales and frequent buyer programs to save a lot of money, but often the stuff we buy is newly put out and not yet on sale, so purchase depends on the asking price and expected selling price. 

We try to stick to bigger-bang items. I usually look for clothing I can sell $40+ (and often end up selling for around $20 if it sits too long), and other items generally a minimum of $40 too. But I won't pass up an item I can get for $3 or less that I can almost guarantee will sell for $20 or more (e.g. water filters). Most of our non-clothing items sell the first or second time around, and we auction almost all of those. This is due to how we buy things rather than how we sell them. 

The types of things we buy tend to have a small range of selling price - thus, it's easy to determine about how much we are going to make. Leave enough room for bids. I price clothing that is not in high demand toward the higher end of the "acceptable" range of prices (being determined by cost of item and average resale value) for an auction starting price, because there is sooooo much more clothing on eBay than the other stuff - less visible. If it does not sell after the first or second auction, I re-investigate the recent sale prices and choose a target price. I only use Best Offer if I am being extra hopeful about my price. Most of the time people send ridiculous low-ball offers. I don't recall anyone ever accepting a counteroffer I sent, but it may have happened once. 

One strategy that works for clothes is to list with a fixed price and then put them on sale. It not only increases visibility, but seems to produce more of a desire in the buyer to get a deal (note: this is a clothing specific strategy). Determine what price you feel is reasonable for the stuff you have (sometimes you just have to try to break even - not what we aim for but better than nothing), the sale percentage you want to have (I've never gone higher than 20-30% off), and then price the item so that the sale price gives you what you want. I have sold things for twice as much as I had the starting auction price. A lot of the slowness with clothing is volume.

Your listings look great - I see that you include many item specifics and measurements - that helps a lot. You keep it very clean and simple in appearance and wording, which I prefer as a seller and a buyer.

Take advantage of a free trial to the members area! It can take up to 24 hours to add so it's listed as one-day, but i can keep an eye out this evening and get you added quickly to take advantage of as close to 48 hours as possible. It will give you an idea of what kinds of things we sell most and for how much... TONS of stuff. Basically what to buy. i can tell you what we paid for things. Ask anything! 

An eBay store may have some advantages. You can plug in some numbers on the link below and it will give you cost estimates for various store plans. As your numbers change, check back and see if the advantages have shifted. 

Should I get a store? Click here for eBay Store Fees Illustrator!