eBay has been a critical marketplace for online retailers for the past 20 years. The marketplace is huge and makes up roughly 19 percent of all of eCommerce. Unlike repricing on Amazon, repricing on eBay doesn’t involve constant undercutting by retailers. On eBay, effectively applying dynamic pricing techniques means that you’ll have to get to into the nuts and bolts of this bargain-hunter marketplace.
Stand Out From the Crowd
Offering the best price weighs heavily on your search rankings. This is because when shoppers modify their search results, they often modify it by having the cheapest price first. Sellers also need good selling history and feedback to top the ranks of search results, but the most immediate aspect with the biggest impact they can change is their price.
So without further adieu, here are the top four pricing strategies to help stand out from the crowd on eBay.
1. Aggressive Pricing: The Bottom Dollar Strategy
A bottom dollar strategy is the most aggressive pricing strategy you can use on eBay. It sets your price below any competitor you might have, even if it is at cost. Matching or undercutting the lowest price is a bold move that should definitely be used sparingly. It will get you noticed, but you will have to sacrifice some margin for visibility. New sellers with minimal experience should consider this as a last-resort strategy.
2. Match The Top Dogs
This pricing strategy allows you to match your prices with top-rated sellers and other top-rated plus listings. These are the sellers that have really earned the top of the search results. Great feedback, great prices, and fast shipping time. Often times, a top-rated seller does not have the lowest price in the marketplace, so make sure you have redeeming qualities beyond price to help you appear at the top when you implement this strategy. There are factors other than pricing that can help you win sales, such as great feedback. A higher price with good feedback might perform better than a lower price with poor feedback because the seller appears more reputable.
3. Keep Up With the Best Matches
If you want to continue climbing up the search indexes and continue narrowing down your competitive circle, then try pricing based on “best match”. This will help you compete with top sellers, but only the ones that appear to be in the highest position in eBay’s search results. Most customers will only go through the first 10 results and seek the best bargain in that range instead of continuing onto the sellers located on pages further back. If you think your seller feedback and sales history is cut out for the front page, but can’t seem to keep up with the front page prices, this strategy is for you.
4. Have Your Cake and Eat It, Too
If you are going head to head with a competitor due to similar ranks in results, you might be interested in this strategy. In “best match” results, price matters, but there’s more to it. If your feedback or conversion rates are better than a certain competitors’, and you’re already above them in the ranks, set a repricing rule to be a certain percentage above that seller. Because price is not the ultimate determinant in ranking, you will remain in position, and make some extra profits as well.
What other pricing strategies would you recommend using on the eBay marketplace?
Editor’s Note: This post was originally published in July 2015 and has since been updated and refreshed for readability and accuracy.