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Selling Via eBay Auctions or Fixed-Price Sales: Which Is Best for You?

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eBay isn’t just for online auctions. Sellers have the option of offering items for auction or for sale at a fixed price. In this article, Michael Miller, author of Sams Teach Yourself eBay in 10 Minutes, helps you decide which selling format is best for you and your merchandise.
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eBay started out as an online auction site, but that’s changed in recent years. Today, more than half of eBay’s transactions are made at a fixed price, either via fixed-price listings or auctions with a fixed-price Buy It Now option. Some buyers, it seems, are tiring of the auction format, and like purchasing items at a fixed price.

Given the option, what’s the best way to list your merchandise on the eBay site? Should you stick with the tried-and-true online auction format? Should you put a single price on your items and sell them like a traditional retailer? Or is the Buy It Now approach the best way to go, with its mix of auction and fixed-price functionality?

As you might suspect, there is no single answer to these questions. It depends a lot on what you’re selling and what you expect from the experience. Read on to learn more.

Online Auctions: Pros and Cons

To many users, eBay is synonymous with online auctions. Auctions still represent about half of eBay’s transactions, but it’s obvious that many buyers prefer the fixed-price format.

That’s not to say that auctions are dying. Far from it; in many categories, the online auction is still the selling format of choice. But is it the format for you?

Probably not if you’re selling commodity items, new merchandise that can be found from many other sellers at competitive prices. Few people want to take the trouble of bidding on these sorts of items; why risk losing an auction when you can easily purchase the item for a fixed price elsewhere?

Take the example of a merchant selling video game systems—Wii, PlayStation 3, and so forth. These are widely available items, true commodities, sold by a variety of retailers both on and off eBay. The price of a Wii or PS3 is pretty much set by the market, so it’s unlikely you’d get eBay buyers bidding the price up higher than the established retail. List this sort of item as an auction, and you’ll likely never get more than what other sellers are asking at a fixed price; you may not even get bids, as buyers opt for the immediate gratification (and shipping) from fixed-price sellers.

Things are different if you’re selling items that are less widely available, some types of used items, and collectibles. When there’s less completion, it’s more likely that buyers will bid up the price. It’s true; scarcity often results in increased market value, and the best way to realize that value is via the online auction process. Let the price rise to whatever buyers are willing to pay.

The key here is the lack of direct competition. Where one PS3 is the same as another, it’s a different story if you’re selling something a bit more rare—one of a kind items, older merchandise that is no longer in wide circulation, vintage goods, and true collectibles. These items are perfect for the online auction format.

Let’s say you have in your possession a long out-of-print CD from a performer with a large and loyal fan base. If that CD can’t be found in stores, and if there are enough fans who are interested in it, putting it up for auction can result in some lively bidding activity, and a nice price for you. It’s all a matter of supply and demand; if the supply is short and the demand is high, good things result.

So online auctions are still good for non-commodity items—the rarer the better. You may not know what this type of item is really worth, so you let the eBay market decide.

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