Smart Starting Prices Can Keep You From Agonizing|
September 03, 2013
In the last several columns, I’ve talked about buying and selling coins on eBay. Last month, I ended with an introduction to deciding on an opening bid for a coin in an auction format. That is, how do you price your coin so that interested people will open the bidding in your auction?
Obviously, if you put a price on a coin that’s more than any reasonable buyer would pay, then you’re likely to get lookers but no takers. Over the years, I’ve seen many coins priced this way.
Not surprisingly, these are coins that don’t sell, no matter how many times the owner relists them. Because eBay listing charges for auctions are quite low, there’s little penalty for continually relisting an item. Apparently, sellers keep relisting the coins hoping that someone who doesn’t know what they’re worth will pay the ridiculous price.
Another way to price an auction is with some minuscule amount as the opening bid. I’ve been told by sellers with more experience than I that this approach will generate more bids (and bidding excitement) and typically higher final sales prices than any other pricing method.
The danger, of course, is that a very expensive coin will sell for a ridiculously low price, say $250 for a Fine 1909-S V.D.B. cent. I haven’t actually seen this example on eBay, but I did see a certified Fine 1909-S V.D.B. that sold for less than $300 in a no-reserve auction on Teletrade.
Sellers who use super-low starting amounts report that the occasional “steal” (coin that sells for much less than it’s worth) is more than offset by inexpensive coins that sell for more than they’re worth because of the bidding excitement created by a minuscule opening bid. However, I find that I’m psychologically unable to price my auctions in this way.
That is, I find that it’s too nerve wracking for me to put a ridiculously low opening bid on my auctions. I’m saying this from experience: Years ago, eBay offered free auction placement for sales with a minimum bid price of 99 cents or less. I took advantage of this with 15 coin auctions.
My problem was that most of the serious bids for any auction don’t come until near the end. As a result of this, I agonized over coins worth $100 or more that had been bid up to maybe $30 with only a few hours left in a seven-day auction. Although the coins eventually sold for reasonable amounts, I decided that free auction entry (or any other inducement) just wouldn’t offset the headaches I would experience.
Another possibility is to use a super-low opening bid price with a reserve amount (a minimum amount for which the coin will sell) on the coin. There is a charge for putting a reserve on an auction, and the results are likely to be disappointing. What frequently happens is that bidders interested in the coin stop bidding before the reserve is reached, and the coin doesn’t sell. Although it is possible to use reserve pricing on the site, eBay does not encourage it. In fact, I can’t remember the last time I actually saw an auction listed with a reserve.
Another pricing possibility is to make the opening bid the amount you would like to have as a reserve. In this way, you show up front the minimum you will take for the coin. One problem with this approach is that someone may bid the opening amount and that’s the end of the bidding. The coin sells, but you don’t get as much for it as you were hoping to get. In such a case, a lower opening bid might have produced a bidding competition that would have taken the price beyond your “reserve.”
The initial pricing approach I often employ is to set the opening bid low, but not ridiculously low, at an amount below the minimum I would like to get for the coin. For example, suppose I’m selling a coin that I think should bring about $100, and I’ve got $75 in it. Rather than pricing the coin at $85 (the minimum I think I need to get in order to break even with eBay and PayPal fees), I might put an opening bid on the auction of $49.99 or $54.99. These are starting bids that should be low enough to generate some bidding competition without being either ridiculously low or so high that they result in the opening bid being the final bid.
Another decision you will need to make is what to charge for shipping. If you’re using a fixed-price format (Buy It Now), then one approach would be to add your shipping fee to the fixed price and check the Free Shipping box. Also, if you’re selling expensive coins and expect to have a decent markup with a final auction price, then again Free Shipping may be in order. If you feel you must charge a shipping price, be sure that what you charge is reasonable and, if anything, less than the actual shipping amount. Buyers definitely resent what they perceive as excessive shipping costs.
I think it goes without saying that you should provide the best possible service, packing well whatever you sell and putting it into the mail as quickly as possible. Good communication is a must, and e-mails allow you to inform the buyer of everything you’re doing on his or her behalf. At a minimum, you should tell the buyer when payment is received, when the item is mailed, and when you provide feedback to eBay.
There’s much more that I could tell you about my 14+ years of experience buying and selling on eBay, but there are some things you’ll need to learn on your own.
If you still haven’t tried it, take the plunge. I can almost guarantee you’ll be glad you did.
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• IT’S HERE! Order the 2014 North American Coins & Prices.
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• See what guides and supplies our editors recommend for keeping up with your collection.
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