Let’s say you have an electronic equipment you wish to sell. What price should you settle for?
A great strategy if you want to do no work at all at research is just to go to eBay.com, or a similar web site, and look for products similar to yours. It’s then, your choice to either go to the upper area of the prices (set a high standard for the price), or to the lower prices (sell, probably, quicker). We’ll set this price as X constant.
But this strategy has a counter-point – it’s the price people ask, not the price they will settle with. The difference can be quite big: if I tell you I sell my laptop with 1,000 EUR, and you say no, you will be happy to accept my second offer, of 900 EUR. But if I tell you I sell my laptop for 900 EUR and I will not sell it for anything less than this, you will not be as pleased, even though it’s the same offer.
The trouble with looking on web sites to determine the price of a product is that you may not know if the seller will settle for the price set on the web site, or that’s just a starting point, which will then help him sell quickly, as soon as he offers a rebate.
Also, if you go on eBay to find out how much your laptop is worth, you won’t know what should the real selling price should be. So, you might put 1,000 EUR, but if someone offers you 850 EUR, is that a good offer or is it a scam? How to find out what a more realistic value for the laptop be?
My suggestion, in this case, is to establish a different starting point. You see, by going to eBay, you accept their prices. But they might be unrealistic, since you know little of the conditions of the laptop (a few pictures won’t give you a whole understanding) and the urgency of the seller to get rid of his laptop.
My suggestion is this algorithm:
- Find out your basic characteristics for the product. For a laptop, it’s RAM, hard drive speed, processor, video card, screen resolution, diagonal, connectivity, brand of the manufacturer, This fits well with most electronics. A photo camera has sensor size, lens type, connectivity, weight, battery duration, video capabilities. An old PC has some important components (processor, RAM, power source, motherboard, hard drive, case). A video camera has resolution, image quality, type of data being saved.
- Find out new products which basically match your product. To do so, ignore some basic characteristics of your product (if another laptop has 500 GB of internal storage, and yours has 1 TB, consider it a similar product). Create a list of 5-10 products with similar characteristics. Make an average price for a product similar to yours in 70%, but which is new. We have a new constant – Y.
- Look for promotional offers which have the same price point as the listings on eBAY. Try to establish what you could buy as new for the exact same amount of money you would pay when you would buy the product on eBay. We call this Z, and it’s more of an internal thing, than an actual price, product or configuration.
- Try to find a product in the list above which has some rebate/promotion/price cut. Compare it with the original price of that product. We now have two new constants – A and B. If you find more than one product which has a rebate, make averages for A and B.
- Try to find a product in the list above which is refurbished. Compare it with the original price of that product. We now have two new constants – C and D. If you find more than one product which has a rebate, make averages for C and D.
Now, you have the following data:
- X – An average price point of the selling point of your product on eBay.
- Y – An average price of buying a new item, similar to yours.
- Z – What you could buy as new, if you would shop only for discounts at the same value as the average price on eBay.
- (A-B)/A (you divide the difference between the prices to the original price, to find out the percentage of price cut). The average price cut of a new product similar to yours, when sold with promotional price.
- (C-D)/C (you divide the difference between the prices to the original price, to find out the percentage of price cut). The average price cut of a new product similar to yours, when sold as refurbished.
Some random data:
- The laptop might sell for 1,000 EUR on eBay.
- It also might cost, on average, 1,500 EUR if you buy it new.
- You might get a laptop which has 30% poorer performance than your used laptop, but it would be a new product, bought as a rebate.
- There might be an average 10% discount for the item, when bought new (calculated as: (1,500-1350)/1500).
- There might be an average 20% discount for the item, when bought refurbished (calculated as: (1,500-1200)/1500).
With this data, you are now in the mind of the buyer. A prospective buyer will now evaluate between new / discounted / refurbished / second-hand products, but will most likely do so by analyzing some data. Now you have the data also.
How to do better than this?
- You could do a much better research, with more prices involved, but this should give you only minor advantage.
- You could post your ad on more than one site, which should yield some results.
- You could research how to make your ad more attractive. This should be very lucrative.
- Finally, you could research some psychology. Should you set your starting price point for your laptop at 1,300 at 1,000 or at 700 EUR? How much discount should you accept? When too much is too much.
- Decide from the start how much time are you going to spend on the process.
This article had a different point, by giving you some ideas on how to have more data for a logical decision of setting your price point. Surely, there are other paths to improve your ability to sell a product.
Lifehacker has some tips on this:
- Sometimes, It’s Better to Ignore Auctions when Selling on eBay
- Market Price Calculates What You’ll Get for an Item on eBay
- Sell Your Used Junk for More Money by Letting Amazon Store and Ship It
- Where You Should Sell Your Stuff Based on How Much It’s Worth
- How to Get the Most Money Selling Your Used Stuff on Amazon
- What Should I Do to My Computer Before I Sell It?