Today’s post is the second installment in our feature series, The Perfect eBay Listing.

Although its importance is often overlooked, the duration of an auction listing is tied to both the business model and the degree of success an auction will achieve. Additionally, if you’re attempting to run a sustainable business on eBay, you need to choose your listing durations in ways that are in harmony with your inventory control systems as well as your desired methods of operation. Bottom line: there’s more to it than you may think, so we’re going to take an in-depth look at things to help you make an educated, informed selection.

Tip #2: Choosing your listing duration

The primary governing factor for choosing a listing duration is the item that you’re selling. Fortunately, there’s a very fundamental economic principle that will help guide your choices. It’s the law of supply and demand, and thanks to eBay’s rapid marketplace environment, you should be able to feel out the demand for your products in no time (with one or two “test” listings). In many cases, you’ll already have a good idea what the demand is, so that will help guide your choice of listing duration as well.

In Tip #1, we mentioned the XBox 360 as a barometer for demand in the online marketplace, and we can continue to use this example to illustrate a very fundamental point about listing durations. Many online shoppers are going to be interested in obtaining an XBox 360 at a price that exceeds the current “market price,” simply because there aren’t enough consoles available to satisfy the massive demand for this year’s hottest holiday item. As a result, you’d want as many people as possible to view your listing, because more exposure will likely get the attention of the most rabid buyers. This will, in turn, drive up the closing price of your item.

Another thing to consider is your product inventory. If you’re selling an XBox 360 on eBay, I think it’s safe to assume that you probably don’t have more than one of these babies. Therefore, your primary concern is the closing price of the item — you want to make as much money as possible in one shot.

The problem with one-off listings, however, is that sustainable businesses cannot realistically be built upon them; the work required to sell each item would most likely outweigh the rewards over time. Let’s shift gears, then, and look at a more realistic business model. In doing so, we’ll help you refine your decision-making process for listing durations. For illustrative purposes, we’re going to play the role of a cellphone accessory store, and our primary auction items are cellphone holders — you know, the ones with John Deere, OCC, Harley Davidson, Disney, and other logos and characters on ‘em.

The first thing to realize here is that these things are available pretty much everywhere, so the online demand is relatively low. We do, however, have a distinct advantage that you MUST realize when selling on eBay. We have items in inventory that aren’t available everywhere, and Joe Blow in Montana, who is just dying to get a John Deere holster, can’t find them within 200 square miles of his log cabin. Thanks to his dial-up internet connection, however, he browses eBay looking for things he just can’t get in the land of the Unabomber. One day, he comes across your auction for a John Deere holster, and BAM — he immediately places a bid. In fact, he’s so intent on getting this thing that he’s going to make sure he’s the winning bidder.

Although it has been somewhat sensationalized, the scenario above is a very real situation that happens every day. In fact, eBay’s new marketing campaign keys on this idea, as they now trumpet the slogan “Whatever IT is, you can get IT here.” Millions of buyers are looking for IT each and every day, and the odds are very good that lots of your items are exactly what buyers are looking for.

Back to the point of this listing tip, though. How should you list these cellphone holsters? Assuming you have 20 different types of holsters, you should probably list these items at auction instead of Buy It Now. Why, you ask? Based on Tip #1, it makes more sense to allow the bidders to drive up the prices because the cellphone holsters have different value to different people. Since Joe Blow cannot buy a John Deere holster in Montana, it’s FAR more valuable to him than it is to Farmboy Freddie in Kentucky, because Freddie can pick them up all day long for $9.99 at his town’s cellular store. The rule of thumb here, then, is that items with impulse/desire potential should, in most cases, be listed at auction instead of Buy It Now.

Okay, so you know you’re going to list the holsters at auction, but how long are you going to list them? There’s no perfect answer to this question, but I’m going to give you insight that is based purely on my experience. In my opinion, the best way to list items like this is through a one day auction. In order to understand this thoroughly, you have to understand both a buyer’s psychology and browsing habits. Items that are not listed as “Gallery Featured” typically receive two viewing spikes throughout the duration of their listings — once when the item is first listed, and the second as the item is about to close. This is due to the fact that eBay has filters that allow buyers to see items that are “newly listed” (the default setting for new accounts) or “ending soonest” (the option that almost ALL savvy buyers use).

Knowing this, then, why not list the items for one day in order to generate quick and potent interest? As an added bonus, the one day listing adds that feeling of urgency — if buyers don’t act, they’re going to be left out. This is just another psychological tool that you can use to capture your market, and if you’re serious about selling, then you should also be serious about using psychology to your advantage.

Another benefit of one day listings is that you get to test and refine selling practices in a very small amount of time. First listing didn’t go so well? By day two, you can make necessary changes, and by day three, you can make a sale based on the best practice that you just figured out from your first failed attempt. It just makes sense from an efficiency standpoint. Also, I think it’s worth noting that when I switched from 3-day to 1-day listings, I saw an improvement in efficiency (from 67% to 70% of items sold), and there was no associated drop in closing prices. Bottom line: I sold more, held the same margin, and made money faster.

One thing you should be aware of, however, is that one day listings are only available to sellers who have a feedback score of 10 or more. Until you reach the 10 plateau, I recommend using 3 day auctions on items that would otherwise be listed as one day auctions.

Oh, and as a side note, I don’t really have any use for 5 day auctions. If your item has high demand and you want exposure, choose 7 or 10 day listings, and if you want to sell quickly and turn over inventory, choose a 1-day listing. Also, be judicious when choosing 10 day listings, because those things seem to drag on forever! Personally, I reserve 10 day listings for featured Buy It Now items where I have a large inventory. This works well when you want to sell large quantities, but otherwise, they just get annoying because they drag on for so long.

See you on the next tip!