How pricing impacts the time it takes to sell an item online
By Priscilla Muhiu
| Oct 27th 2017 | 4 min read
In the last couple of years, we have seen an evolution of platforms that seek to connect buyers and sellers. It is now possible for consumers to sell things that they don’t need or use anymore and make some quick extra cash thanks to online platforms.
Initially, consumers would either give away the items or sell to the ‘mali kwa mali’ who walked around the estates. However, pricing of used goods is a hot potato. Pricing may seem like a dime a dozen but if you get down to brass tacks, you will realize that it’s not that obvious.
When selling used goods online, sellers need to remember that it’s anyone’s call. Online platforms enable price transparency hence creating a level playing field for all the sellers in the platform. Buyers are now able to compare prices of similar items hence make a decision on which item they will buy.
Setting the price of used items can be a deer in the headlight moment. A seller may end up selling an item too cheaply hence get a raw deal or price it too high that the item doesn’t sell.
Unfortunately, when this happens, most sellers turn a blind eye and blame the platform for their inability to cut the mustard.
How can consumers set their prices to ensure that they get a good deal? Ava Seavy, yard sale expert who knows the ropes from garagesalegold.com developed a pricing strategy for used goods called the 50:30:10 rule.
The rule suggests that near to new items should be priced at 50 per cent of the retail price of a similar new item, slightly used item should be priced at 25-30 per cent of the retail price and lastly, worn out items should be priced at 10 per cent of the retail price. This rule is a great guideline for giving a price indication but a seller may choose not to use it in isolation.
Making no bones about pricing, the selling price of an item is about perceived value and how much the buyer is willing to pay for that item. There are a couple of factors that influences the price of a second hand item for example, retail price of a similar new item, condition of the item and the price of similar used items.
Ideally, a buyer would rather buy a brand-new item than buy a similar used item which priced slightly lower than the retail price of a new one.
In online platforms, getting some of the sellers to reduce their price is like getting a leopard to change its spots. They are not willing budge come hell or high water.
A seller playing with a full deck should know that flexibility is a key success factor when it comes to selling used items online. The best way to get a feel of a good price is by comparing the prices of similar ads in the same platform.
Comparing prices of similar items in the same location as yours gives an even much better insight on what the price point should be. If the seller still feels that he/she should price the used item higher than other similar items, they need to highlight the reason why a buyer should pay more or why the item is better than the rest in the description when posting the item on the platform.
While comparing the prices of other similar items, the seller can also compare how long each item has been on the site and how many views the item has. This is a good indication of demand of the item on the online platform.
Another good indication of whether your pricing is right is the number of replies a seller gets. If a seller has a lot of replies but the offers being made are much lower than the price indicated, the seller should consider matching one of the offers received especially if the seller is running against the clock because it is an indication of what the buyer might be willing to pay for the item or the perceived value of the item.
By following the above-mentioned tips, a seller is highly likely to mark the spot and sell the item. Some sellers have their heads in the cloud and by doing so, they end up being disappointed and miss out on the opportunity to make some money.
That said and done, it is important to note that the type of items also determine the time it will take to sell. For example, the time it takes to sell a high value item value such as a car or house may be longer than the time takes to sell a mobile phone.
However, pricing is still a key determinant of how long it will take for a seller to sell their items. Down to the wire, there’s no correct price to what the buyer is willing to pay.
The writer is the Business Development head for East Africa at OLX
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