Friday, September 13, 2013

Auctions as a Balanced Approach

I've been doing some talking, and a lot more thinking, about how to incorporate the auction format into my listing strategy when reselling used clothing on eBay. As many of you know, I'm testing the auction format as a means to sell instead of just a means to clear out stale items.

I am running an experiment this month where I list 5 auctions every day. Some of these are new, some are older items from my store. I was originally listing them at MY price, the price at which I would accept the lowest offer in my store. I wasn't noticing a lot of action, and granted, it was a very small sample size so it could just be a fluke. But, through discussions on a Facebook group, I picked up a tip from another seller. She mentioned she starts her auctions at 4X (4 times) what she paid for the item. Her goal is to double her money after fees. Personally, I think this leaves money on the table, but for the sake of experimentation, I had nothing to lose by getting rid of some items quickly. So, I've been doing this.....and seeing a little better results. This stands to reason because the starting price is often $12.95 instead of $19.95. Of course things will sell better when you drop the prices 30%.

My goal is to unload 20% of my items once I move them to auction. This number would produce another sale per day on average, presuming I keep starting 5 auctions every day. I sell about 2-3 items per day in my store right now and this would allow that number to climb to 3-4 per day without accumulating any more inventory. In fact, it would purge inventory because I would be selling more items without buying more. I'm modeling after another seller I've seen use auctions to get from 4 items per day to 8-10. This seller only carries 400 items in their store! That's an inventory load I can handle.

Also, I'm watching a couple of other sellers closely and finding the ones that really shoot the clothing out the door are typically selling on rather thin margins. I'm seeing average profits of $7....even $5. Well, I'm not into selling 225 items per month to only profit $1500 when it's all over. That hourly wage is crap considering all the sourcing and shipping and listing and photographing you need to do to produce those numbers. I'm sorry, but I could work at McDonald's for better cash.

The answer, as always, lies somewhere in between. This is my Holy Grail, if you will. To find that sweet spot. Like centering a 98mph fastball in October, finding the center will have things leaving my store/ebay business like a homerun in October. Here is a quick note (not pretty, complete sentence typing) I drew up really quick noting where I stand in the auction challenge so far. I'm close to that 20%. Remember, though, I'm doing this all month so I can learn. Stay tuned.....and Make Today Count!

5 bids on 36 auctions. that's pretty close to 20%. however, the last two days, i listed at 4x the price i paid instead of my normal price. so, if bidding wars don't happen (which i suspect those are rare on clothing), then i don't know that it's worth much other than to get rid of clothing.
so, the theory stuff at MY price in my store for awhile. and, at whatever predetermined time i decide is time to let things so (i'm thinking 3-6 months) then move them to auction at 4x what i paid.

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