Today’s post marks the first entry in a new series in which we’ll explore the ins and outs of The Perfect eBay Listing. By the time we’re done with this series, we’ll ALL be online auction geniuses.

Hopefully we’ll be rich, too

Tip #1: Choosing your auction type

This one may seem like a no-brainer, but there are actually a few factors that you must consider before choosing an auction type on eBay. Begin by asking yourself the following: “Is my item a one-off, or do I have an inventory?”

If it’s a one-off item, then an auction format is absolutely the way to go. If you’ve got an inventory, then an auction may or may not be your best choice. If your item carries a pretty consistent market value, then perhaps a Buy It Now listing may suit you better. On the other hand, if your item has an appeal that may vary across different demographics, then you might be better off listing the items individually at auction. It requires a bit more work, but your overall sales volume and closing prices will probably end up being higher in the long run. Let’s take a look at an example to illustrate this more clearly.

Let’s say, for instance, that I carry 5 different XBox games, and I’m confident that I can undercut the typical retail price of $44.99 by about $5 (including shipping), bringing my asking price down to something like $35.99 plus $4 for shipping. I have an inventory of 20 games each, which gives me a total of 100 games. In this case, a Buy It Now auction would suit me best, because I can safely assume that:

1. A large number of consumers will want to buy my games at this $5 savings - the market price is $44.99, so this is clearly a good deal.
2. These items will not gain or lose a significant portion of their value over the next week or so, which covers the duration of my listings on eBay, so my asking price is “insured,” at least for the short term.

With these things in mind, then, it is definitely best to list this type of inventory item in Buy It Now rather than auction format. It’s quicker, easier, and the entire setup is more straightforward — you’re selling 20 copies of, let’s say, Madden ‘06. If your customer wants the game and wants to save money, then he’ll buy it from you because you’re offering a deal that undercuts the market value. This is the essence of a Buy It Now listing — reasonable quantity, low price. This is not, however, a catch-all, but it is intended to give you an idea of how to list what you’ve got.

Now, let’s move on to look at an inventory item that would be better suited for an auction format. In this example, I have an inventory of 30 different styles of hats that include NASCAR, baseball, Playboy, and more. In contrast to the video games, there are MILLIONS of different styles of hats available to the general public, so it stands to reason that any particular customer may look at one of these hats and think that they might not be able to get it anywhere else.

Whereas every interested customer will look at the video game and think, “wow, that’s worth $44.99 and I can get it for $39.99,” the same doesn’t hold true for the hats. One person may think that hat is worth $8, and the next person may think it’s worth $20, because they just HAVE to have that awesome pink Playboy hat! On top of that, the hats are relatively inexpensive, so impulse purchases are definitely a possibility. These are all factors that point towards the possibility of successful eBay auctions.

In reality, you can decide which type of listing is best based on just a few easy variables.

First, is there an established market price for your item?

If so, then you’re virtually locked into a Buy It Now listing, and depending on availability, you might be locked in on a lower price as well.

Second, is your item widely available?

If not, then you probably ought to list it in auction format. This is simple supply and demand, and one look at the XBox 360 ought to illustrate this.

Third, is your item unique AND without an established market price?

If so, you have a couple of options. If you have a unique item in quantity, you might consider a Buy It Now listing because you can guarantee yourself a particular margin. The key variable here, however, is making sure that there’s actually a market for your product! If you’re unsure, it’s always a good idea to test the waters - it will only cost a few dollars, and if you’re successful, you’ve found something worth exploiting. If you have a unique item but don’t have a high quantity, then an auction may be better because you will likely squeeze out a higher bidding price (assuming there’s a market for your item).

Every single day, hundreds of thousands of listings close without bids or buyers because they’ve been listed improperly. While there are many factors that contribute to this, it’s not altogether unreasonable to claim that poor choices on auction types play a huge role in these failures. Well, you don’t have to take my word for it — just go look at the men’s hats category and check out all the listings that have Buy It Now AND auction formats…hardly a bid or sale in the bunch!

Despite this, I manage to successfully sell approximately 70% of my listings in this same category. Coincidence? Hmm.