So you’ve got beautiful photos, great products, and still, sales are stale! Maybe it’s your pricing. Today, I’ll cover marketplace pricing strategies which are common today.
Splitting the Difference Pricing Method
- How it works: Using historical data (completed listings), calculate the average price of historical sales.
- Pros: Easy, lots of data to work with.
- Cons: Doesn’t account for changes in the marketplaces, supply, demand, etc.
A Penny Under Pricing Model (one of my favorites)
- How it Works: Look at historical data. Has the item sold frequently? What is the cheapest option which has sold and that becomes the base of our penny under method. Take the cheapest price, consider shipping, and take 1 penny off.
- Pros: All other things even, very likely to get the sale as you’re the cheapest option, you appear first based on price sorting, etc.
- Cons: May not leave you the margin you want.
Bases Covered Pricing Model
- How it Works: When we don’t have historical data (completed listings) to use to figure out the best price, we’ll run an auction which lists the item at the absolute lowest amount which you’ll take. If it doesn’t sell, re-list as the same lowest price and and OBO. Reduce from there as needed.
- Pros: Cover your costs, assess the market demand
- Cons: May take some time to sell.