I have heard many people saying that, with the new marketplace model emerging in eBay, Amazon and other global sites, the 'good ol'days' of Ebay low-start auctions are gone for good. Many sellers has had bad experiences with low-start auctions: few views, few watchers, few bids. And eventually, items going for 1 cent with just one bid. Add free shipping on top of this and your heading into real nightmare stories.
But as a seller using these low-start auctions, I still have a different take on the matter. And I'd like to share that with you. Keep in mind that I sell in the Collectible TCG cards category. What I suggest in this post may not apply to your situation or the category you're selling in.
First off, I think that the situation I underlined in the first few lines is partially true : the best days of auction-style listings may indeed be gone for good. But I still think they are worth running. But. There's a but. There are a number of good reasons to give it a shot, but also good practices to follow and proper conditions to reunite in order to succeed with LSAs these days.
First, let me start with the HUGE appeal of LSAs in my eyes. And its all psychological. LSAs are so darn EXCITING. I really think this is a strong factor that has made eBay unique and appealing from the start. BIN listings are useful and highly effective but... they're so boring.
So the main reason I still want to incorporate LSAs in my selling strategy is because they're exciting. And I love to bring excitement to the Ebay game.
Having said that, here's a couple of DO'S and DON'TS when approaching LSAs.
- Charge realistic shipping. Do not go free shipping with these. If you're going to take a loss, take it on a single side, not both sides.
- Build a customer base and be sure to have a certain number of loyal customers and/or followers, before running LSAs. You could also use LSAs to build a community of followers and increase your positive feedback. But then you need to accept that you will run on a lower profit margin on these items, and maybe take a couple of loss here and there. But once you have many people following you, your LSAs will see more activity, sell better, and sell more consistently.
- This one is really important : always keep in mind how much of your money "is tied" to the object. How did you paid for it or invested in it? Did you got it at a very low price? Was it part of a bigger lot, making the cost of this specific object very low? Did you got it for free? Also, what is the cost (real cost, as well as psychological or emotional cost) of keeping this object : maybe it takes your precious space, or it's in your way, it collect dust, its not a product you value anymore or that you want to specialize in, it is costly to keep, etc...
- If you don't have too much money tied into the object and think about starting at 99 cent, think again, and consider starting it at 1 cent instead. Both ways, you taking the risk of a loss. But 1 cent auction almost always generate more interest and more bids in the end (although not always higher final price). Starting at 1 cent, you will get the most of the "excitement" factor that I just talked about.
- Another advantage of using the auction format, is that it guarantees a money entrance at a specific moment that you can choose. It's not like BIN format, where an item can sit for month without selling. And the more regularly you run auctions, the more regularly you get incomes.
- Make sure the objects you want to try LSAs with, are not common or commodity objects. The items need to be desirable, rare, one-of-kind or collectible in some way. Uniqueness and intrinsic desirability are important factors when deciding if an object should be listed (and have a chance to perform) as LSA.
- Research, reseach, research. This is absolutely crucial in identifying the right items. Search both current and ended auctions. Using both Ebay and Terapeak (to benefit 1 full year of sold items data).
- And finally, completely forget about reserve price. Its a huge turn-off. I think Ebay should have removed this feature years ago. Put a reserve and potential buyers will just run away. It kills the excitement, and you don't want that. Instead of using a reserve price, start higher or use the BIN format/best offer.
This may sound at odds with current online marketplace tendencies, but as an eBay buyer and seller, I still believe in the usefulness - and excitement - of LSAs!
