Setting the right price is very important.
I like setting a price that’s low enough to get some interested initial bidding going, but not so low that it won’t get up to the price I think the item can really sell for. So how do you know what the final selling price will be? You don’t. But you can get a good idea by searching eBay for completed auctions of similar items. eBay keeps most auctions on file for 30 days, so if anything similar has sold in that period of time, you can find it from eBay’s advanced search page.
At the least, you want to be sure you’re not setting the starting bid higher than the similar items’ final selling price. If you do a search for completed auctions and find that Star Wars DVDs have been selling between $4 and $6, don’t put a $10 starting price on the Star Wars DVD you want to sell. Ignore precedence and you won’t get any bids. Instead, gauge the previous final selling prices and place your starting price at about a quarter of that level. (That would be a buck or so for our Star Wars example.)
Of course, you can always go the reserve price auction routein which you get to set a low initial price and a high selling floor. In our Star Wars example, that might mean starting bidding at a penny (very attractive to potential bidders), but setting a reserve price of $4 or so. But when you run a reserve price auction, you run a very real risk of scaring away a lot of viable bidders. If you want to run that risk, fine; reserve auctions do let you get bidding started at a very attractive level, while protecting you if bids don’t rise to the price you’re looking for.
Don’t waste your time searching auctions still in progress. Because so much bidding takes place in the last hour of the auction (that’s sniping, remember?), a mid-auction price is likely to bear no relation to the final pricewhich you can find by searching completed auctions.
…But Don’t Set It So Low That It’s Not Believable
In some instances you need to worry about setting the starting price too low. If you set too low a minimum bid for your item, some potential bidders might think that something is wrong. (It’s the old “if it’s too good to be true, it probably is.”) Although you might assume that bidding will take the price up into reasonable levels, too low a starting price can make your item look too cheap or otherwise flawed. If you start getting a lot of emails asking why you’ve set the price so low, you should have set a higher price.
Make Sure You Recover Your Costs…
Another factor in setting the starting price is what the item actually cost you. Now, if you’re just selling some junk you found in the attic, this isn’t a big concern. But if you’re selling a large volume of items for profit, you don’t want to sell too many items below what you paid for them. Many sellers like to set their starting price at their item costso if the item cost you $5, you set the minimum bid (or reserve price) at $5, and see what happens from there.
Make Sure You Can Live with a Single Bid
What happens if you set the starting price at $5 and you get only one bidat $5? Even if you thought the item was worth twice that, you can’t back out now; you have to honor all bids in your auction, even if there’s only one of them. You can’t email the bidder and say, sorry, I really can’t afford to sell it for this price. If you listed it, you agreed to sell it for any price at or above your minimum. It’s a binding contract. So if the bidding is low, you’d better get comfortable with itit’s too late to change your mind now!