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Member Workshop: Starting Price - Fish with the Right Hook - June 27
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Last Post Jun 27, 2006 11:06 AM by: deirdre@ebay.com
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deirdre@ebay.com
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Member Workshop: Starting Price - Fish with the Right Hook - June 27

May 31, 2006 3:15 PM
Topic: Member Workshop: Starting Price - Fish with the Right Hook

Host: HTDeepAnalysis
Date: Tuesday 06/27
Time: 10:00 to 11:00 PT
Location: Workshop Board

Description: In this workshop, Jen Cano, Education Specialist for HammerTap, Certified Solution Provider, will discuss research strategies for finding an optimal starting price. During the workshop, we'll compare starting prices to a fishing hook. If your hook is too big for the fish, you'll come away empty handed. Likewise, if your hook is too small, you'll end up giving away the bait. Just as in fishing, your hook needs to be the right size. Join us for tips on choosing a starting price that's sure to hook buyers.

Cheers,

Deirdre
eBay Community Development
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htdeepanalysis
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Member Workshop: Starting Price - Fish with the Right Hook - June 27

Jun 26, 2006 6:02 PM
Hi, I’m Jen Cano - the PR Director for HammerTap. We are a Certified Solution Provider that specializes in eBay market research.

Today I’ll talk about the relationship between start price and sales price and give insight into some basic research strategies that should convince every seller that they must customize their start price to best match their product features and the selling goals that they hope to accomplish. We’ll discuss three important aspects tied to start price. They are:

1. If the start price is not the right amount, you either won’t make the sale or you’ll end up giving your product away for too little.

2. Start price is determined by the seller yet its effectiveness is dependant on the buyer perception.

3. In an auction environment, what the buyer wants and will do (bid, pay, etc.) is more important than how the seller wants to sell a product.

To help you keep track of the workshop, I’ll mark my workshop posts with the phrase “Workshop Message #” at the top.
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htdeepanalysis
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Member Workshop: Starting Price - Fish with the Right Hook - June 27

Jun 26, 2006 6:02 PM
Workshop Message 1
Have you ever gone fishing?
I know it sounds silly, but an eBay start price and its relationship with sales price has a lot in common with fishing. If you look at your product as the bait, the fish you are after is the buyer willing to pay the most for that product. (Or the biggest fish in the lake!)
In our fishing analogy, the start price can be compared to the hook. When fishing it is vital to have a hook that is the right size for the fish you want to catch: if the hook is too small the fish might get away with the bait; and if the hook is too large, you may not hook any fish at all!
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htdeepanalysis
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Member Workshop: Starting Price - Fish with the Right Hook - June 27

Jun 26, 2006 6:03 PM
Workshop Message 2


That’s where auction research comes in. Right now, the eBay community is buzzing about “eBay market research.” What’s all the talk about?


Here’s what it comes down to: selling more auctions and getting higher selling prices is not just “good luck.”


There are always reasons why one auction performs well while others fail. Sometimes it’s the day and time the auction ends. Sometimes it’s the auction type. Maybe it’s the keywords used in the auction title, the starting price, the category, or dozens of other listing elements.


We have to start somewhere. Today, let’s get some insight into how start price might affect the outcome of a listing on eBay.
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htdeepanalysis
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Member Workshop: Starting Price - Fish with the Right Hook - June 27

Jun 26, 2006 6:03 PM
Workshop Message 3

It should come as no surprise that if your start price is not in the “ballpark” of what your buyers are expecting, there are two possible negative outcomes:

1. You may not make a sale, or

2. You will end up giving your product away for too little.

The goal, then, is to not only outline general ranges to determine what the buyers are expecting/wanting in a sales price, but to take that general range and see how raising or lowering a start price influences both the auction success rate and the sales price.
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Member Workshop: Starting Price - Fish with the Right Hook - June 27

Jun 26, 2006 6:03 PM
Workshop Message 4

So how do you know the start or reserve price that will produce the best possible chance of selling a higher volume or give you the best possible price?

Trial and error works eventually. Those of you who have been selling for a while could teach us a few things about how to sell a product you’ve been selling for a long time, right? But, what happens when you have a new product? Do you want to do the trial and error every time?

If you want to learn from the competition’s experience, and you want to learn quickly, you need a reliable auction research tool.
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htdeepanalysis
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Member Workshop: Starting Price - Fish with the Right Hook - June 27

Jun 26, 2006 6:04 PM
Workshop Message 5

Sellers of new products rarely have information that allows them to know real customer needs when listing an item. Simply stated: Most sellers don’t know what is driving customer purchasing! This means that you need information that can target your buyers and that will help you meet your full profit potential… or, make the most money!

Let’s take a quick look at a real-life eBay selling example. Let’s see what we can learn from the relationship between start price and sales price with three major brands of tennis racquets selling on eBay: Head, Wilson and Prince.
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htdeepanalysis
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Member Workshop: Starting Price - Fish with the Right Hook - June 27

Jun 26, 2006 6:04 PM
Workshop Message 6

For this workshop, we took a random sampling of approximately 1000 eBay listings in each brand name over a 30-day time period. And the results identified some surprising trends.

As we discuss some of these trends, please understand that you will find different trends when researching different products and categories. I just want you to understand how to read your own results for your own products, based on the analysis we’ll do today.
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htdeepanalysis
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Member Workshop: Starting Price - Fish with the Right Hook - June 27

Jun 26, 2006 6:04 PM
Workshop Message 7

One interesting trend that this particular data sample revealed was that lower start-priced items (0-$50), generated more bids and had a higher auction success rate (ASR), than products that had a higher average start price-- specifically those above $50. The diagram below demonstrates this finding.

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htdeepanalysis
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Member Workshop: Starting Price - Fish with the Right Hook - June 27

Jun 26, 2006 6:04 PM
Workshop Message 8

There could be several reasons that we see this trend. The most likely is that the majority of buyers in this sample were looking for a bargain and not as interested in auctions that had a higher start price.

Although this trend is important to recognize (especially if your selling focus is on a successful auction or listing) the sales price--or profit--on tennis racquets might follow a different trend.

Again, it’s important to understand your goal: is it a successful listing, a high profit, or an optimal combination of the two. Use caution in following a trend that promotes a different success factor than your goal. For example, if a certain starting price trend boosts profit, but not the success rate, and you need to move a high volume of product, you might want to steer clear of that trend.
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htdeepanalysis
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Member Workshop: Starting Price - Fish with the Right Hook - June 27

Jun 26, 2006 6:05 PM
Workshop Message 9

Next, let’s look at a trend that this sample revealed with regard to Average Sales Price (ASR).

A closer look at the data lets us see that some aspects of start price are unique to a particular product. This sample revealed that within these three brands, the less expensive retail brands of tennis racquets (Head, Wilson) are increasing in average sales price (ASP) with a lower start price ($0-$10), while the more expensive retail brand (Prince) has and increasing average sales price (ASP) with a slightly higher start price ($11-$50).

Simply stated, it appears here that buyers expect more expensive products to have higher start prices, and if they don’t, suspicion or some other reason keeps them from being willing to pay more for that item!

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htdeepanalysis
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Member Workshop: Starting Price - Fish with the Right Hook - June 27

Jun 26, 2006 6:05 PM
Workshop Message 10


There are two important points you can take from this workshop.

The first principle is that each product’s performance is unique. While we see some trends that do often apply across a group of products or a category, it is risky to apply them to each and every item sold.

The second principle is that, with good data research your confidence level in your choices goes way up because your decisions are based on factual data not trial and error or lucky guesswork.
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htdeepanalysis
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Member Workshop: Starting Price - Fish with the Right Hook - June 27

Jun 26, 2006 6:05 PM
Workshop Message 11

Successful sellers will always remember:

Careful, product specific, market research will almost always yield the highest overall profit and the most successful auctions in the shortest, most efficient amount of time.

Those eBay sellers who are having long term success with high profits are those who clearly understand their product but have also taken steps to make sure that they clearly understand their customer.
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deirdre@ebay.com
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Member Workshop: Starting Price - Fish with the Right Hook - June 27

Jun 26, 2006 6:23 PM
Hi everyone:

We posted the content early to allow you to read through the information.

We'll open the workshop tomorrow, June 27 at 10:00 am PT.

Hope you can join us,

Deirdre
eBay Community Development
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deirdre@ebay.com
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Member Workshop: Starting Price - Fish with the Right Hook - June 27

Jun 27, 2006 9:58 AM
Welcome and thanks for joining us today!

We love workshops to be interactive, so please feel free to ask your questions that directly relate to this topic.

Added note: If you click on the "Watch this discussion" link, you will receive an email each time someone posts to the workshop.

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A from our Legal Department: The statements and opinions made in this discussion board are those of the workshop host only and do not reflect eBay policy or eBay's opinion with respect to such statements.


Cheers,

Deirdre
eBay Community Development
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