Stats and Trends. Pricing your Items

I make no apology for bringing this subject up again because so few sellers ‘get it.'

The topic is pricing your items.

The reason I've included this topic in the ‘stats and trends' section is because my suspicions about eBay buyers was confirmed by independent research conducted by Nielsen / Net Ratings.

I confess that when I first started selling on eBay I believed that the number one reason people used it was to find the cheapest price. However, my viewpoint changed when I started to ask my customers why they bought from me. Hardly ever did they mention ‘getting the lowest price' as the main reason for buying from me.

Since then, my long held belief has been that price is not the most important factor in causing most people to use eBay. I knew from personal experience that other factors such as availability, service, quick delivery and discovering unique items were higher priorities for many people.

When I saw the Nielsen survey I felt somewhat vindicated because it confirmed my own research, but on a much larger scale.

If only more sellers realized this crucial piece of information, they could save, and even grow their currently dying eBay businesses. You see, positioning yourself as the lowest price provider only leads to disaster. Why? It leads into a downward spiral of competing against others who have the same short-sighted mentality.

You might be thinking, what about WalMart? Their model is to be the lowest price provider and they're doing reasonably well, aren't they? True, but it's still too early to tell whether they'll be around for a long time. Before them, K-Mart was the king of low price and look at what happened to them. Before that it was Sears. WalMart have enormous buying power, more so than any other retailer, so they might just make it, only time will tell. But you're not in the same position as them with enormous buying power, so please trust me when I tell you that you DO NOT want to have lowest price as your main benefit.

I've observed that the reason why lowest price is featured by many eBay sellers is because that's how they buy. They themselves look for the lowest price. Unfortunately, they are wrong to believe that's how everyone is.

Personally, I hardly ever look for lowest price unless it's a commodity item, an identical item that's readily available from numerous stores, where the only difference between sellers is price. But even then, that's rarely the case. Usually there are other factors that make the argument to buy from one seller over another despite them not being cheaper.

I'll give you a specific example. Because I travel a lot, whenever I fly I ALWAYS choose a direct flight rather than a connecting flight, even though the latter might save me hundreds of dollars. To me, the pain of having to waste at least several hours at another airport AND add to the risk of my bags not being transferred onto the second flight is not worth that much money. I'm more than willing to pay a premium so that I don't have to go through that. And in my market, Salt Lake City, that usually means having to fly Delta, so I end up using Delta even though I far prefer other airlines like American Airlines or JetBlue. If AA or JetBlue fly direct, I'll choose them even if they're more expensive.

Then there's also the matter of airmiles. Many travelers will choose the airline they have the most points with rather than the cheapest provider, because they want more airmiles.

Can you see how price is way down the list of priorities? I'll give you another example.

What about when you go on vacation? I'm absolutely sure that you usually spend more money than you intended to. Rarely do you think about how much something costs in that relaxed environment. That's one reason why tourism income in popular resorts is so huge. Many retailers charge more than the going rate because they know most people will pay it.

When you take the kids to Disneyland and you arrive at the front gate to see that the daily ticket price is $67, you might well take a big gulp but you still pay it, don't you? You're not going to deprive the kids of the experience, even though it's probably far more than you had expected to pay.

Just as price is a non-issue in these examples, it's a non issue for many people when shopping on eBay.

As I mentioned earlier, there are plenty of customers who are happy to pay a premium for great customer service, faster delivery, instant availability, opportunity to buy a collectible, rare or otherwise unique item.

I sincerely hope you grasp this point, even if you are one of those people who buy mainly based on price. Just know that you are not everyone! And if you currently sell items that tend to attract price shoppers, then change what you are selling. You'll be more profitable, and you'll spend less time dealing with customer service issues. It's been my experience and that of all my mastermind group members that buyers who seek the lowest price also demand more than the customer who is happy to pay a premium. You might think it would be the other way around, but it's not. Years of testing this have proven that customers who have money to spend at the drop of a hat are easier to deal with, and less demanding.

Get ‘low price' out of your head and start making a lot more money!

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