How to Determine Your Bidding Price on eBay

When my wife first started selling items on eBay, the one thing she struggled with was how to set the bidding price for various merchandise. She was (understandably) wary of setting the price too low because she did want to make at least a nominal profit, but she knew that if she set the price too high, she wouldn't get any takers. Eventually, she worked out a system for determining the bidding price on eBay and it has worked ever since.

There are essentially three ways in which she prices an item on eBay, depending on the value of the item and the investment she made to obtain it. Although she still makes mistakes - as all eBay sellers do - she makes more of a profit than she ever did before starting out.

Determine Your Bidding Price on eBay: Starting the Bid at One Dollar

In some cases, it is beneficial to simply start the bidding at $1 in order to attract buyers. Obviously, this is an enormous deal, and it will hopefully generate enough competition to drive the price upward until you receive a handsome profit. Sometimes this can backfire if the item isn't attractive and the bidding doesn't start until just before it closes, but more often than not it accomplishes the desired goal.

The best way to determine if this is the best way to set your bidding price is to conduct a search for similar items that are already for sale on eBay. Find out which items have sold and in what price range, and how many similar items are still in the bidding process. If the prices are close to what you are hoping to make for the item, you can feel comfortable with setting the bidding at $1. If not, you might want to start the bidding a little higher.

Another tip is to set the bidding price at $0.99 rather than $1.00. On the eBay listing price scale, the difference between the two is $0.10, which might not seem like much, but those dimes can add up. So rather than paying $0.35 for a $1.00 item, pay $0.25 for a $0.99 item.

Determine Your Bidding Price on eBay: Cover Your Investment

The second (and more popular) tactic is to set your bidding price to cover your investment. For example, if you purchased a pair of shoes for $8.00, then you would start the bidding price at $8.00 to ensure that you will at least make the money back that you spend on the item. This is a safer bet because, if you started the bidding at $0.99, the shoes could easily sell for $4.00, leaving you at a loss of $4.00 plus listing costs. Not very frugal.

As with the first tactic, however, you should pay attention to the listing costs before setting your bidding price to cover your investment. For example, let's say that you purchased an item for $200 and you just want to cover your investment with the bidding price. If you were to list the item at $200, you would pay a listing fee of $3.60. If, however, you were to list the item at $199.00, you would pay eBay only $2.40, which saves you eighty cents. That might not seem like such a big deal, but those 80-cent costs can add up rather quickly.

Determine Your Bidding Price on eBay: Market Value

The third and final bidding price tactic is to set the opening bid at the market value of the item. This can be tricky because you won't always know the market value without conducting some serious research on the Internet. My wife often uses Froogle to determine the market value of an item because she can call up the product by entering a description and/or product number.