Buying and Selling on eBay: Tips, Tricks, Problems & Questions

Discussion in 'Classic Menswear' started by HansderHund, Jul 27, 2012.

  1. HansderHund

    HansderHund Senior member

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    I think a few economic principles are being mixed together. Clothes, like any product, will have a significant spread in price. You have to take into account a number of issues including age, condition, and size, to name only a few. The overwhelming majority of secondhand clothes depreciate over time, the exceptions being pieces that are valued for their age, designer, or material. However, across all of this, you can come to an average price for what a piece sells.

    Since you're asking which price sellers should use, I can say that the smart seller takes a close look at their item and compares it to those that have sold across the spectrum. Maybe the seller has a rare size that doesn't often appear on ebay and can therefore ask a higher-than-average price. Maybe there is a surplus of larger sized suits on ebay and he has to ask for a bit less. Either way, he has to analyze the market and compare it to what he has in his hands. Therefore, you (buyers and sellers) should take the higher-priced, slower selling item AND the lower-priced, quick selling item into consideration. It's all a part of the average. When it comes to high-priced, slow selling/low-priced, quick selling items, you can see market-value in action. Why is the low-priced item selling fast? Simple, it's being priced below market value and the customer base sees. As a result, it sells quickly. The other side is true. Someone is pricing themselves above market value and it is taking longer to sell.

    The same is also true for a buyer. If the buyer is a smaller size and most of the listings are of a larger size, the buyer can expect to pay a premium for his size and therefore can't compare it to the prices paid for larger sizes.

    Again, it's important to look beyond price as the only restriction. Are we assuming these suits are identical in every way (size, color, condition, etc.)? If that is the case, it's easy to understand why the higher priced item sits longer on the shelf. We can get further into it and say that some sellers on ebay, as in real life, have a certain reputation. Seller ABC may have a long history and loyal customers that appreciate his service and have built a relationship. People may be willing to pay a bit more with seller ABC because they trust them.

    Low-balling is only relative to the item in question. Low-balling, by definition, is offering significantly lower than market value. It's used as a sales technique in order to convince the seller that their item is worth less and therefore feel much better about selling it at a discount. For example: I'm offering a product for $100 and a potential buyer offers me $20, 80% off of my asking price. I say no, it's worth far more than that and they raise their offer to $50. Suddenly, the buyer has offered 2.5 times their original offer and the seller now feels as though they're making a much better deal.

    Finally, yes, some sellers inflate the price of their goods. Ebay has thousands of sellers, many of whom don't put a lot of thought into pricing/business models, etc.
     
  2. jebarne

    jebarne Senior member

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  3. jebarne

    jebarne Senior member

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    I agree that the market sets the price. Cost determines how long you're going to want to be in this business. The Spread. Return on investment and return on your time.

    For those of you who do this as a primary or secondary income, cost has to come into play. You all know this better than I do, but if you sell an item for $25 and someone offers you 15, your fees are $3 and your shipping is $5, you're down to $7. If you paid $3.50, you net $3.50. Most people here wouldn't go hunting for that amount of return.

    Wes recently said that he sets his first price based on 3x cost, plus fees, plus shipping since all of his include shipping. (I would guess he has mastered the cheapest shipping methods.) That's a great benchmark and provides a return that he's happy with.

    In my company (tech), if we invest $1 in R&D, we need a return of around $20 in sales to make it worth renting space, paying everyone, buying equipment etc,. And of the 4 items we fund, 1 will probably make the 20x return, 2 will do 10x and 1 will fail. Like that BB tie you bought for $1 that just won't sell.

    So what a buyer doesn't see are all the fees, time, expense that go into this business. What I've concluded from you guys since I've been coming on here is that for it to be worth your time, you need to have a targeted return for every item you buy. Spend $1 to make $3 or whatever your target return is. One of my few thrifts was a pair of florsheim shell longwings. pretty beat up. while they only cost $3.50, it took me almost 5 hours to clean, moisturize, polish etc. Yes, I know I'm slow. So, even if I sell them for a big amount (Wes suggested a BIN around $180 with a likely BO around $60) I don't get an hourly rate that makes it worth my time to look for stuff. . At $60, I'll make $50, pre-tax.

    So if someone knew that I paid $3.50 for the shoes and offered me $35 for them thinking it is a 10X return, I'd turn it down until I had tried to sell them for a couple months at the higher price. If I hadn't put the time into the restoration, then I might take the $35.

    Just my observations. worth probably $.02.
     
  4. capnwes

    capnwes Senior member

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    Yeah.

    For example, If the seller states, "I got this as a Christmas gift but it doesn't fit, so I am selling it." Would you then expect to purchase the item with winks and smiles rather than paying a fair price for it?
     
  5. My Main Man

    My Main Man Senior member

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    Exactly. I have some shoes for sale on eBay and I got a $10 offer on a pair. I ignored it and got a message basically saying, "I'm 99% sure you got these at a thrift store or a garage sale for less than my offer. With $10 + shipping, I know you'd still make a profit." While he's sort of right, he doesn't know that I got them for cheap and spent a few hours restoring them. A lot of stuff that gets bought needs a little work, whether it's getting a button sewn on, getting rid of stains or even just steaming/ironing. I feel like most buyers don't take any of that into account.
     
  6. SeaJen

    SeaJen Senior member

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    You should have said "Yes, you're correct. I picked them up at a thrift store for $8. That store is an hour's drive from my home, but apparently about 20 hours drive from yours. Should I charge you the time it took me to get them, the running cost of my vehicle, etc. or would you like me to charge you how much it would have cost you to go pick them up. I'm good with either one, just let me know and I'll invoice appropriately."
     
  7. hawkinomics

    hawkinomics Member

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    I don't think there's any reason for buyers or sellers to be annoyed with each other in the bargaining process. Here are my thoughts from a bargaining theory standpoint, not directed at anybody in particular.

    Buyers:

    Sellers have costs too. If you're increasing their costs in terms of one dimension of time, effort, risk, etc. you need to make up for it in another. They are all different in terms of how long they are willing to hold onto something and how much it costs in terms of time, space, etc. to do so. They will change their mind about these things when they change their mind and not before. Seller strategy can differ and cater to different buyer types too. If you're on a budget, don't hound a seller that is clearly after the impatient buyer willing to pay more for an item that is sent immediately.

    Sellers:

    If you're too afraid to let the market set the price in an auction (lack of bid depth or otherwise), you have to live with random offers. Most people aren't on ebay to get hard to find items, they're looking for stuff on the cheap. If you're selling gently used Park Avenues for $240 BIN you're just congestion to most buyers and liable to attract a lot of "lowball" offers closer to a typical auction price discounted a bit. Retail is not any more of a valid price reference point than your actual cost is.

    It all comes down to matching buyers and sellers so that everybody is satisfied. Most matches (contacts) will not work out and that's just part of the process. Buyers and sellers just need to keep it in mind and not get worked up about it. Best to be polite and look like somebody that isn't playing any games. All the idiots, whether buyers or sellers, will eventually get hammered into reality when they can't make a deal so until then just let them be.
     
  8. stevent

    stevent Senior member

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  9. Koala-T

    Koala-T Senior member

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    Right but you also just made 100% profit on your initial investment and covered all your costs (if you count your time and effort as free, which many small business owners do). Most businesses would be exceedingly happy with that. That said, a product is worth what the market will bare, and if you can get more for it, there's absolutely no reason you should be shamed for doing so.
     
  10. Brianpore

    Brianpore B&S (BS) ambassador-in-chief

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    Been a little MIA, but wanted to post this correspondence with a buyer.... good/bad/indifferent, it's how I handle things.

    Buyer Quote: My Reply Quote: Buyers Reply Quote:
    [​IMG]
     
  11. Koala-T

    Koala-T Senior member

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  12. JabbaTheSlut

    JabbaTheSlut Well-Known Member

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    quote name="jgill79" url="/t/309281/buying-and-selling-on-ebay-tips-tricks-problems-questions/5610#post_6623124"]This is not getting the views I expected. Any suggestions to get them up? I know the pictures could be significantly better, but they are no worse than any others I've taken, and those have all gotten lots of hits. It's really a nice jacket:

    http://www.ebay.com/itm/271281770823?ssPageName=STRK:MESELX:IT&_trksid=p3984.m1586.l2649
    [/quote]

    Personally I wouldn't include the "For Lagerfield" and put more searchable details about the jacket.
     
  13. Koala-T

    Koala-T Senior member

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    Personally I wouldn't include the "For Lagerfield" and put more searchable details about the jacket.[/QUOTE]

    Thanks, Jabba.
     
  14. jebarne

    jebarne Senior member

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    100% profit sounds good in the abstract. However, the opportunity cost of the hour it takes to make that profit might be higher doing something else. For example, I pay my lawn guy $30 per week. Takes him an hour. factor in mowers, gas, oil, trailer, he's making $10-12 an hour.

    Not arguing your point, but I think that's why many people here have minimum deal targets. Most part-timers aren't set up to do high volumes of low margin deals. If you're measuring, shipping, photographing, tracking you really have to factor in the additional time you're not available for family, friends, other hobbies etc. Plus the fact that half the spouses are pissed that boxes and bags of clothes creep into all parts of the house. Most are really motivated to show a reasonable profit so the support continues.

    Me personally, I love learning new things. I'm enjoying the occasional thrift hunt. Learning what sucks and what doesn't. But when I sell all my own personal stuff that I can't consign, I'll move on to something else I want to learn. But still, making money is how you keep score, so for now, I want to get better, I want to learn more, and I want to have fun. So Far, So Good. If I were going to go after this big time, I would look for pallets of close out items, contract an agent in the garment district for samples or some such, hire an assistant to manage the postings, shipping and email, and I'd focus on finding stuff exclusively.

    I look at this like I look at playing the guitar or playing golf. I can enjoy those at my own level of competence, without comparing myself to Tiger Woods, Eric Clapton, or Spoo, Brian, or Wes. These guys have taken years to develop and earn the knowledge, the skills, their online reputations. Rather than withhold these abilities, they generously contribute to the online learning clinic that this forum has become for so many of us.

    So when a successful guy like Wes, with 400 items for sale, an acknowledged finder of great things, and a great stager of his items tells me he starts at 3X cost plus fees and shipping, I take that as a baseline assumption. So now when I'm evaluating a purchase, I look at it and ask myself if I have an 80% chance of getting a minimum of 4x (allows for fees and shipping) the cost. If I don't think so, then I shouldn't buy it. Even something decent that would require more of a time investment (like getting a specific brand of button and sewing on) if it is only 4X the cost, its probably a pass. On something like that, the opportunity cost may move my thinking to 5X unless its a really expensive item that will be worth the time.

    The Proof? all you guys have a pile, or boxes, or bags of stuff awaiting repair that you're delaying because you have easier stuff to post and turn. If it was a Kiton jacket that needed a $30 repair for you to make $300 - $400 profit, it would be at the top of the list.

    Again, my opinions only, based on observations.
     
  15. Koala-T

    Koala-T Senior member

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    Oh, I agree completely. The other factor to consider is the breadth of the audience you reach. Wes, Brian, and Spoo all have followings, and get their goods in front of a lot more people than most of us can, especially those of us who are just starting out. For them, it makes sense to start their baseline at 3x because out of the 100s (1000s?) of people who see their items, you are more likely to find someone over time willing to pay out that amount. But as you are trying to build a following, an audience, if you will, you might try to attract some attention, both of buyers and of eBay by offering some items at a lower cost, say 2x. When I am selling enough to justify an actual store expense, and have established myself as a seller with a discerning eye towards quality who has a following of individuals who regularly check my goods, and eBay recognizes me as the same and helps feature my goods, I can justify raising the prices to 3x-5x.

    As you say, only my opinions, based on observations (and very little experience). I am trying to be a sponge.
     

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