posted on March 19, 2003 01:33:54 PM new
I have noticed more and more that some in my area have started selling way WAY below retail with no chance of profit - and almost spamming the listings.
I mean what are they hoping to accomplish with this? Do they not look at the other listings and want to keep their items profitable, competitive and keep the market lively and balanced? They are barely even paying for their listing fees with what their items are selling for and with listing so many items they don't even get more than one or two bids on an item.
Do they just sit at their newly purchased McComputer and say "ohh doh. Lookie Bertha I did 100 listings today. Oh doh Bertha - isnt this fun. Birtha, go buy some more of this stuff and we can do more listings. We are so good at listings Bertha. Lookie Bertha we get to ship stuff!"
It is maddening to me. In an already packed category it makes being able to do real business quite difficult. I have to research when these bozo's are closing and be sure not to close when they are - or list different items.
Anyway - this is a new phenomenon for me and I've only been selling for about a year. I still do well (amazing) in spite of these new players. What do you savvy folks do when you see this. Where do these guys come from?
posted on March 19, 2003 01:43:20 PM new
Have you considered the Walmart strategy - Not that they are as large as Walmart, but they lose money on purpose to destroy the competition, and then when the competition is gone, they can sell for more.
Another possibility is that they have a limited number of an item and will sell them all cheap, then disappear. While it is below your cost, it may not be below their cost. Who knows how they got the merchandise.
posted on March 19, 2003 02:00:06 PM new
They also take themselves out as they destroy the market where that item won't sell at all anymore.I've seen seller at the Flea Market do this and lucky for me they are no longer in business.
posted on March 19, 2003 02:20:17 PM new
wow a true psychic amongst us... can you tell me this weeks winning lottery numbers too please?
How do you know exactly what these sellers are making? Not knowing what the item is, but with alot of small businesses going out of business there is some amazing deals to be had if you are willing to do the work...
posted on March 19, 2003 03:08:28 PM new
Twelvepole -
I did a search on two of the sellers in question and took a look at their sold items over a 30 day period and did an average. Then I calculated the listing fees paid. I have an excel sheet that calculates FVF's for a range of listings and plugged it all in.
Also - I buy the same product from a manufacturer so I do know what a low price is. I apologize I did not include that in my original post but you know how rants are.
Both sellers appear to be losing money - (listing fees exceed sales. I'm not even including inventory or hidden costs) but there could be more to it - I haven't a clue. All I know is that it is impacting my sales - and frankly that's all I care about.
Say that they are making even a little money. They could be making alot more and still come in way UNDER the standard sellers. It just makes no sense to me.
Luckily I also have a product line of original stuff I actually make myself that competes well but has higher overhead and takes mroe time.
Anyway.. there does appear to be more of this mutant selling strategy going on than before. That's what my rant was about.
posted on March 19, 2003 03:54:25 PM new
I understand your sense of frustration at having people undercut the prices, but you can still compete by offering superior customer service and some good guarantees...
If they are trying to corner this particular item, you can still beat them in the long run...
posted on March 19, 2003 04:06:06 PM new
Whiteowldesigns, there is a seller in my categories who adopted the same strategy as your competitors a bit over a year ago. There is a group of us who analyze her purchases and sales among all of her ids. She was listing normally, i.e. starting price covering her costs. Then she purchased one of those cds on how to be a more aggressive seller on eBay. I believe the cd must has recommended listing all auctions at the same low price and in quantity, so long as the price was $9.99 or less. That is why you see so many sellers with auctions up at $7.77, or $6.66, or $.99, an indication that they purchased that specific cd and actually followed the instructions.
Anyway this seller buys her inventory on eBay and relists it, buys groups and pieces out with better photos and descriptions with titles screaming RARE, STUNNING, GORGEOUS, etc. Thus we can see how much she spends on inventory and how much she makes. I can tell you that for over a year, since adopting her new low pricing strategy, her average sale is less than her average cost, meaning she has significant losses. On the other hand, she has close to a 100% sell rate.
The people who have actually met this seller in person say the seller possesses an obsessive-compulsive personality, that it is more important to her to have the "appearance" of having a successful eBay business, than it is to actually make profits. Income from other sources feeds her losses. Eventually it will all catch up with her, and the group of us who are tracking her numbers are watching with avid attention and bated breath.
posted on March 19, 2003 04:29:04 PM new
Whiteowldesigns - Last year I was able to buy out the inventory of a shop that was going out of business for pennies on the dollar. It was all brand new merchandise. I able was offer some this stuff at deep discounts compared to other sellers and still make money hand over fist. The more highly sought after items were bid way up from where I started them to around the going price for that item on Ebay. Don't assume that these sellers paid the same amount as you did. They may have lucked into a situation similar to mine.
Great feedback. Very enlightening. I am learning so much as I go.
Hot cup of tea - that is so very cool that you actually confer with other sellers in your same catagory. What a great study. If I were to send a note to someone in my catagory I don't think it would go so well, who knows though. I may try someday.
TomServo92 - you lucky devil! I have been trying to land a lucky score like but have not found it yet. I do think though that no matter how low you can sell an item for - if your bottom line comes out red - its red. I'm not refereing to your case - I'm sure you did quite well - I'm talking about the type that started me ranting in the first place.
Twelvepole - I think your right on about how to deal with this at the moment. I am going lower the price on a few items though for the interim. Also, I have one advantage that in my catagory seems to make a difference. I take much better pictures than any of the sellers undercuting right now - acurate pictures, but still better. They may be selling the same thing for less - but for some reason some people still buy mine because It just looks so much better. I guess that's why advertising is such a big industry...lol.
It will be interesting to see if the how the trend goes. My catagory seems to have very rapid cycling trends that can vary widely from month to month. That's part of what makes it fun... um, i think.... well ok, its a pita but hey, it keeps my lights on and my car paid
posted on March 20, 2003 09:21:23 AM new
I list sales sometimes at 9.99 (.30 cents vice .55 Cents) 6.99 and ocational .99 (To draw new bidders)but I have never viewed any cd so don't use that as a benchmark.
posted on March 20, 2003 09:51:01 AM new
I list mine mostly at $9.99. What I try to do is list according to the price I pay plus all charges and a small profit. It usually goes higher but if it doesn't I haven't lost anything except my time and as we all know time in eBay makes no money. When I have something that I think is really valuable I start it at the lowest price I want for the item. I am not selling anything to anyone of substantial price so they can sell it for more. I never buy off eBay and resell.
