Buy It Now vs Auction: How to sell most effectively on eBay
When listing a product on eBay, you have two choices: auction or Buy It Now. It can really feel like a daunting decision.
If you make the wrong choice, you may lose out on profit, take longer to sell, or potentially have to sell for less. If you choose correctly, however, you’ll get better margins, your stuff will sell faster, and you could sell more than expected.
Each method has its particular benefits. While there isn’t one best way to sell on eBay, there is a best way for your specific store. What works for one business may not work for another.
So, let’s explore which would suit you best.
Auctions: Compete and win
We all know what an auction is—a terminally quick-spoken caller rattling off numbers and taking bids, driving the final cost up with every utterance. Online auctions are bit more sedate, with bidders waiting with bated breath as an algorithm rattles off the numbers and calls the winner at an appointed time.
On eBay, each month, you receive 40 free listings.
Once you use them up, you pay a single fee to list the item and put it up for auction at a base price. It’s a pretty good deal: if your listing doesn’t sell, it can be re-listed up to eight times without you being charged again.
There’s also a final value fee that applies to both auctions and fixed price listings: 10.9% of the total amount of the sale, up to a maximum charge of $440 per item. When you’re calculating your profits, it would be wise to keep that in mind.
Buyers can then bid on it incrementally and it’ll be up for 10 days. When the auction time has elapsed, the item be sold to the highest bidder.
- For uncommon items. Auctions are great for collectible, unique, and uncommon items (coins, baseball hats, those sports cards you collected as a child).
- Sell for more. Auctioned items can sell at a substantially higher price due to bidding wars. Who doesn’t enjoy a good bidding war?
- Sell faster. Due to the limited availability time, auctions can sell stock faster than fixed-price listings.
...and the bad
- Lack of automation. There’s very little automation involved. You have to oversee the entire auction process, where fixed-priced listings are either sold or they are not. That can be a lot of work, especially if you have several items up for bidding.
- Slow to pay. Buyers can take up to four days to pay, and auctions are known for having bidders be unable to pay last minute, forcing you to start the process all over again. You might not get your money for a while, so take this into account for your cash flow.
- A smaller reach. As auctions only go on for 10 days, they don’t reach as many people as fixed-price listings can. The people that may be interested in your collector’s edition ALF portrait may not be on eBay that week. Hard to believe, I know!
Auction compatibility checklist
So the question is, would an auction work for you? Is your product line the right fit for the world of online bidding?
Let’s explore that in more detail.
High demand, meet low supply
Have an item that isn’t readily available, but in high demand? Perfect!
Those are the items that always do well in auctions. Not only are people actively looking for them but also they’ll likely get a kick out of competing to win them.
Rare and special
Antique, rare, and collector’s items are also great to list in an auction. Before you list them though, do your research.
If it looks like similar items are faring well on eBay auctions, the time is right. Jump on it! If it looks like they aren’t, wait a while.
The value of a collector’s item fluctuates, so you’ll be better off auctioning another time, when the iron is hot. No need giving buyers the opportunity to shop around.
No set value
If you have products that aren’t moving as well as you’d like or they are particularly difficult to value, then auctioning might be just what you need to make them move.
Not only can it sell your items, but it can also build fresh interest in your store. Make sure it looks nice!
Buy It Now: Fixed value selling
Sometimes you want simplicity when you are buying and selling. Like in the real world, your store has shelves full of fine products with prominent labeling that declares the fixed-price. Someone grabs it and buys it for that price.
This simple alternative to the wild world of auctions on eBay is called fixed-price listing or simply, Buy It Now.
Buyers can purchase your item right away at a fixed-price. No waiting and no bidding wars. There’s no time limit either—your item will continue to be relisted until it sells or until you end the listing.
You can also add a ‘Best Offer’ feature to your ‘Buy It Now’ listing.
Buyers can make offers that you can either accept, decline, or counteroffer. These offers will expire in 48 hours, during which time other buyers can also submit offers, and although buyers can see that others are interested in the product, they won’t be able to see that offers have been given.
This is a great alternative to auctions, but before you decide whether it’s for you, let’s explore it in more detail.
- Timely payments. No need to worry about late payments or getting left out to dry with this method. With fixed-price listings, sellers are paid as soon as their item is purchased. What an idea!
- Easy to manage. Managing your store is significantly easier since fixed-price listings are automated from start to end. Listings are adjustable with the Bulk Editor, easily cancelable, and automatically renewed.
- Time for a special sale. Markdown Manager gives sellers the opportunity to run sales when they please. We all know how much shoppers love a sale!
...and the bad
- A total lack of urgency. Auctions are imbued with a sense of urgency. ‘Buy before somebody else does!’ Fixed price listings have no such power. As such, shoppers may bookmark the product instead of hitting ‘buy’.
Buy It Now compatibility check
Whereas auctions generally favor one-off sales or items of a particularly special nature, fixed-price listings tend to favor businesses consistently listing similar items.
Let’s break down why.
If you have a high-priced item that isn’t in high demand, putting it up at a fixed-price is the better option. Because it’s likely that you won’t have several different shoppers interested at the same time.
With fixed-price listings, you only need only one interested shopper, not several.
Regardless of pricing or demand, if you have multiples of the same item, or if you want to sell products for consistent amounts, fixed-price listings are better suited to you.
Not only will it be easier to manage, as your listings will auto-renew, but you will be more likely to sell items.
People don’t always want to bid on items. Depending on the type of product you’re selling, they’ll likely just want to purchase and continue on with their day.
Some final suggestions
Both listing styles can help a merchant move product, but at the end of the day, the one that is best suited to you depends on your items and business goals.
If you have unusual and collectible items, auctions are likely a better fit for you. If you prefer consistency and reliability, then fixed-price listings will likely suit you more.
Once the sales have been made—be it via auction or Buy It Now—you’ve just got to ship them out. I think you know who to choose.
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