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Product Research: Maximize Profits
By Researching Price Points
© Janiece V Smith - All Rights Reserved
http://www.expressprofitsonline.com
I’m asked a lot of questions, but one that I am asked more often
than others has me thinking:
“Once I am in contact with a supplier, how do I determine whether
the product pricing is good enough to make a profitable return?”
Although this is an easily misunderstood factor, it is very easy to
explain and understand. It breaks down to knowing the price points
for each particular product.
It is crucial for any eBay seller to research price points before
making a final decision on which products to sell. Price points are
an important part of your research because the price for which items
sell and the price for which you’re able to obtain them will
directly affect the products you decide to sell.
Price points are divided into three categories:
The price for which you can obtain the product
The price for which the item is typically listed on eBay
The price for which the item is typically sold on eBay
Price Point One: Your Cost
The first price point obviously is not very difficult to figure out,
because more than likely your supplier is going to tell you how much
the product will cost you. However, this number is needed during
your research because you use this number as your constant––meaning
that this number will not change.
Price Point Two: Average List Price
The price for which the item is typically listed on eBay is
important because this gives you an idea of what others selling the
same product most likely are spending on it. This is particularly
important to you because you need to purchase your products at a
price that allows you to be competitive with other eBay businesses.
If you research this price point and find that the majority of
sellers are listing the product far below you, you can assume you
will not be able to compete with this seller. However, if you find
the average list price of the item is within the range for which you
can obtain the product, then this just might be a good deal for you
to move forward on.
Please remember, there are sellers out there who have a different
philosophy about list price. For example, some sellers list an item
at $0.01 and “hope” it gets bid to a profitable amount or they put a
reserve price on it. My opinion and experience is that this is not
so wise. My advice about Price Point Two is to research those other
sellers who are listing their items at prices that, if sold, will
obviously realize a profit.
Note: Be sure to refer to my last article A Scientific Method To
Ensure Your Products Will Sell On eBay about comparing apples to
apples. You do not want to focus on the garage sale sellers but
rather on the business sellers. Someone who is trying to sell the
Armani suit he no longer wears isn’t going to list this used suit
for the same price someone like you or I will who is obtaining the
suit for resale purposes only.
Price Point Three: Average Sell Price
The price for which the items typically are selling after all bids
are in is not as important as the other two points because we’ve
already done our research, which was based on making a profit with
the list price.
However, this price point can be very helpful for you in determining
the following important factors:
How much leeway you have in working with your list price,
Your overall monthly profit and what you can expect, and
How much listing volume you will need to meet your monthly profit
goal.
Note: As I mentioned in my previous article, be sure to always
compare and research your price points within the active auctions
and completed auctions. By researching eBay’s past and present
auctions, you’re able to obtain information on your product of
interest and minimize your chances of making a money-losing decision
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Resources Box:
Janiece Smith is the author of Internet’s top-selling eBook teaching
everyday people how to make their own small fortune selling on
eBay®.
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http://www.expressprofitsonline.com |