Pricing Formula’s How do you pick a product, market it on the Internet and sell it to make a product when others around you are selling the same or similar products? Even more so, why would someone buy from me when they could go to a retail store and buy the same thing for less? The answer is they won’t. You can’t compete with a superstore, don’t even try. They have tons of money, spent years establishing relationships with manufactures and distributors. They have huge warehouses and buy the products by the trainload. They also have large quantities of employees who specialize in buying goods. You and I do not have any of these things. Don’t listen to any business opportunity that claims they can help you do this. I am not squashing you’re dreams here just being practical. You can start small and work bigger but the key is starting small. So the $64 million dollar question is how do you price your stuff and compete with retail? The answer is: Carry items that those stores don’t carry. Here is the beautiful part; I am not going to tell you what those items are. You choose. It’ s your idea and you probably already have something in mind to start with. The Superstores don’t carry all the products in the universe. There is always room for your idea. That’s the beauty of the business model. |
| Online auction pricing I have said before that I theorize you can get from between 75% to 80% of retail prices online. When you have an online auction initially treat it as an experiment. You need to have several auctions before you get a feel for what people will consistently pay for your item. Start with a high price and work down. Start with a low price and work up. Try a “no reserve” auction or “buy it now”. The trick is to understand it’s an experiment. Also keep in mind that the same people are not online every week. Eventually you will find a method that works for that product. If your product is similar to one already sold online half the work is done for you. Look at the completed items for that particular item and adjust accordingly. I sometimes do a free shipping experiment as well to see if that spurs people on. You can’t have an auction for a week and expect to have an answer; you have to fiddle with it. Web site/Store front pricing This sales scenario is a little different. Because the items are sitting in a virtual store window, you can set a more rigid price. People can either take it or leave it without having to wait for auctions to end. It can work great for you on higher priced items since higher priced items are harder to match buyers to. I can always find a buyer for one of my $75 table sets. But my $300 and $400 sets don’t move as fast. That is ok, since my expectations are adjusted. Note I try and not sell the two different class tables on the same venue. (refer to the taking aim section) Whichever methods you choose remember that it takes some time. Profits don’t start falling into your lap without some work and forethought. Paypal I have only mentioned this briefly but it’s very important. Paypal is a way for people to pay for auctions using their credit cards. They can stay home and plug the data into the form and pay for their auctions instantly. I really like Paypal. It’s free for the buyer and it only costs me a minimal amount. I especially love the fact that I can connect my Paypal account to my checking account. When my balance is to the point where I want to transfer some to my bank, I do so. That convenience in itself makes it worthwhile and it’s also free. If you do thousands of dollars monthly then you might want to consider other merchant account offers. But for starting out, it’s hard to beat. Especially now that Ebay bought Paypal, the interface is much easier and more convenient. Go to www.paypal. com and sign up for free. Pictures You must have one if you’re going to be a serious contender online. Get a decent camera and your ads will get much more attention. I have a Kodak dx-3900 which only set me back about $200 (I bought it online) it is an awesome tool that has paid for itself over and over. Also make sure you either acquire or buy some software that allows you to edit those pictures. You will want to adjust the size or quality from time to time. Kodak bundles their software with the camera. Ask anyone online; ads with pictures sell about 70 % more than ads without. Presentation is everything. |
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