I have noticed lately on forums and blog posts that there has been a lot of discussion about pricing of items.
Some people are asking for pricing strategies for various sites, some on shipping and handling, and some on what to do if the shipping is more than the price of the actual item.
It is a very complex issue and the solution is different for every seller depending on item, marketplace and fees but I figured I would ponder it at bit and throw out my thoughts.
Shipping is a relatively fixed cost unless you live close enough to pick it up yourself, which I have been known to do on occasion. Buyers hate shipping costs we all know that. I hate shipping cost too, I hate paying them to get something and paying them to ship something but if you want something to get from here to there somebody has to pay for it. Should a seller have to pay to make sure you get it, I don’t think so and if they are then they are just inflating the cost of the item to cover it. No one is going to sell at a loss.
Big companies handle shipping costs by either offering free shipping on purchase over a certain dollar amount or a flat rate shipping. In the case of flat rate shipping it all evens out in the wash for them. Sell 1000 items some will be less expensive to ship and other more. Plus you know they get volume discounts from the shipping companies.
There is also the currently popular site to store shipping where you can have your item shipped to your local store. One of the best benefits of that for that company is you have to come into the store to pick it up and on the way to the back of the store, (where pick up is always located) how many other items do you discover you need and since you are there might as well pick up. It also adds no greater expense as they just stick it on a truck that was going to that location from the warehouse anyways.
So how does the smaller seller compete? Some just list actual shipping costs and then pay out of pocket all the packing supplies necessary for shipping the item. Some add a small handling charge and others add it to the price of their item and offer either “free shipping” or shipping and handling included in price. When it gets really tricky is when it is a small, heavy or lower priced item and the shipping is more than that actual cost. Do you up the item price and lower shipping by same amount? Do you list it with actual shipping? I don’t know the answer you have to do what works for you.
I am the type of buyer that is out for the best deal. I am generally your Walmart shopper. I know when I am researching items online as a buyer I look at item cost and shipping and if it is a number I can live with I buy. If not I move on or go the the local store. The type of buyer you want to attract is as important to your pricing strategy as your items. I don’t go to Macy’s or rarely even Target. I want the most volume I can get for my money. Some shoppers want the best value for their money and others want the best customer service.
Which leads me to pricing on various venues, there seems to be a feeling that if it is cheaper to list on a given marketplace then the items should be cheaper. Everyone thinks because sellers pay so much in fees at for example eBay that the same items should be cheaper on Ecrater or Bonanzle or BISI or wherever else you sell. But there are several things to consider.
Ebay has made things available to everyone no matter where they are located and with the number of sellers competing on the platform the bottom has dropped out in a lot of categories. Sellers that really know the value of their items don’t list them on eBay. Then you have sellers that don’t realize they have something of value, again experienced buyers purchase the items cheap either for themselves or to resell at a more respectable price. I equate eBay to the Walmart of the internet, you can find most things you need at the lowest price. The problem is some of the prices have fallen so low that sellers can no longer use it as a viable selling option.
Then as you move up the ladder you have the newer marketplaces like Bonazle and Ecrater, and many many more. I equate them to the Target of the internet. I am not always expecting the lowest price there for a variety of reasons. First of all to really make a go on any of the younger sites you have to make your own traffic, which requires time marketing your items. That leaves less time for actually listing items so your volume of available sales is already down. On these smaller sites because of the lack of listing fees it is less expensive to let items wait for the right buyer to come along. Same thing a lot of eBay sellers do with their stores pay the small listing fee and set the price they actually want and just leave it. So how does one price their items fairly and does the price at other venues always have to be less then the giant in the room.
The final step up the ladder at least with antiques and collectibles are place like GOantiques or Rubylane. You expect to pay more for your items there as they have build their reputation on the quality of their sellers and items. Many sellers are doing fine listing on those sites also as they are waiting for the buyer that appreciates fine quality items. Not your bargain basement shopper.
The funniest thing about all of this, is if you look hard enough you can find some of the same item at all 3 levels of selling platforms. Is the Coronation jar on GoAntiques any better than the one on eBay probably not but the one on eBay will be cheaper. I can say that for a fact as I sold one on eBay for 24.95 and have seen the same item on GoAntiques for twice as much but it is the reputation of the venue coming into play.
My opinion is that if you have done your research and an item is worth a certain amount you should price it accordingly and the buyer will find it. I expect the stuff I get at Walmart or the local to not last very long and is cheap enough to replace. If I want value for my money I move up the ladder, but if I purchase something of better quality I expect it to last longer.
Sellers need to price their items by the type of buyer they want and find venues that fit that buyer, and at margins that they can still afford to be sellers next year.
So the final question becomes do the newer sites want to be Walmart, Target or Saks. Only time will tell what type of buyers each site will actually attract.
Let me know your thoughts on pricing and shipping in the comments below.
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