Choosing the best format for your eBay auction

Choosing the best format for your eBay auction is an important part of making sure your item sells for the best price. There are several different platforms; in this guide we’ll look at all of your options so that you can pick the best one.

The Basics of Selling Format

The default shows the Online Auction tab. You’ll see different price options: starting price, Buy It Now price, and an option to select a reserve price. The only required field is the starting price. The other two options incur fees but are often worth it.

If this would be one of your first five auctions of the month, you will see a line stating Enjoy a $0.00 Insertion Fee when you list your item as an auction at the top of this section. This lets you know that if you use an auction-format, you will be subject to the first five auction fees (no Insertion fee, but an 8.75 percent Final Value fee on the total selling amount). This is good for items expected to sell for under $25 or over $500, but not so great in the middle.

Auctions can only have one item, so the quantity field is grayed out on the Online Auctions tab.

Starting Price

First, let’s look at the starting price. You should have an idea of the average selling price from your item research. However, it’s always worth double-checking with the most recent Completed Listings before selling your item.

At the top of the section you’ll see an average starting price and average selling price for items like yours. Don’t use this. eBay only looks at items that have similar keywords to yours. For example, for a camcorder, it includes auctions for batteries, cases, and so on, not just the camcorder unit itself. That skews the results. At the top of this section there is also a link to Get ideas about pricing by searching completed listings. This link will let you look at the completed listings yourself. So you can look for listings with an identical bundle of products to yours, or adjust your price accordingly. Buyers will always pay more when there are more accessories included.

Reserve Price

There’s one established fact on eBay: lower starting prices attract more (and earlier) bids. In general, a low starting bid will increase your chances of success. Because we are using a comparatively low starting price, we want to protect ourselves with a reserve. If the bidding doesn’t reach the price you set, then you’re not under any obligation to sell the item to the highest bidder. You can offer it to him if you want to (using a Second Chance Offer), but you don’t have to.

When setting your reserve price, consider both the average selling price and what you want to get for the item. Be realistic, though. At the end of the day, your objective is to sell the item, so don’t list a ridiculously high reserve price. You won’t end up with a bidding war at the end of your auction if the reserve has still not been met.

Buyers expect to see reserve prices on expensive items, but not on cheap ones. Most buyers prefer auctions with no reserve, but that is more risky for you. On expensive items, I recommend that you always use a reserve. On less expensive items, use your discretion to weigh the risk versus your expected selling price. The more popular an item is, the less risk you take by not using a reserve. Hot-selling items usually get enough bids to end up selling at their true value. Slower-selling items or obscure goods that have a limited market can be very risky to start at a low price without a reserve.

Most buyers bid in whole increments ($15, $50, $200, $325, and so on), so it’s wise to list your reserve price just below one of those increments. If you want to set your reserve at $700, instead set it at $689; instead of $75, use $68. Once someone meets the reserve, the real bidding begins. For our auction, we know the average selling price is $247, so let’s list our reserve at $199 (that way, we catch the $200 bidders as well).

To add a reserve, click Change next to No Reserve price set for this item and enter your reserve price. Remember: the fee for adding a reserve price is nonrefundable.

Buy It Now Price

You don’t have to set a Buy It Now price. If you choose to, it will cost you between 5¢ and 25¢, depending on the price you set.

If the first bidder chooses to place the starting bid instead of using the Buy It Now option, the auction usually reverts to a standard auction and the Buy It Now price disappears (unless there is a reserve price on the auction). Just like the reserve price fee, the fee to add a Buy It Now price is nonrefundable, whether or not the buyer uses it.

When you are setting your Buy It Now price, you should always set it significantly higher than your starting price; otherwise, there is really no point. eBay requires the Buy It Now price to be at least 10 percent higher than the starting price, but I recommend that you go higher and list it around the average selling price, or possibly a fraction higher.

Our average selling price is $247, but the most successful auctions were $300 to $350. Our Buy It Now price will be $297.70 because it’s between the average and the top prices, and pricing it just below $300 makes it more desirable. It’s also well below the retail cost for a newer model, so the buyer is assured that he is getting a good deal.

By pricing it a little lower, any buyer using Completed Listings to research prices will see our item as a good deal.

Using $297.70 rather than $299.99 for the Buy It Now price may seem a little pointless, but there is a logic to it. Buyers will always see $299.99 as $300 because of retail store prices. $297.70 is only $2.19 lower, but it seems much lower because it’s not a common price point. So you are more likely to get the buyer over another seller who priced his item at $299.99.

One tactic that can really attract sellers to use the Buy It Now price is offering free shipping. Simply add the shipping cost to your desired Buy It Now price, and add another 50¢ to pay for the subtitle. Then say “Free U.S. shipping with Buy It Now” in the subtitle.

Fixed-Price Listing

People are often confused about the difference between a Buy It Now auction and a fixed-price listing. Buyers can make an instant purchase on either listing type, but a fixed-price listing does not have an additional bidding option. The Buy It Now price is the only option. The buyer either buys it for that price or doesn’t.

If you want to sell in a fixed-price format, click the Fixed Price tab. The only amount you need to enter here is the Buy It Now price. Use the same reasoning as you do for a Buy It Now option in an auction to determine the price you set. You can also use the free shipping tactic to increase your fixed-price sales.

If you have easy access to your computer, consider using Best Offer. If you want to use this option, set your Buy It Now price a little higher to allow for haggling down with your buyer. That way, she feels like she got a deal and you don’t actually lose any money.

If you select the Best Offer box, you will be given an opportunity to enter an amount that you want to be automatically accepted and an amount to automatically reject below. So I might set it to automatically accept an offer at $275 or higher, and automatically reject anything below $245. I will still receive notification of offers submitted with a Best Offer of $246 to $274 for my own review.

Giving your buyer the option of Best Offer can get your item sold more quickly.

Good luck, and happy selling!