Three Pricing Strategies for Selling
Posted in Money on June 7th, 2017
Recently, I have been selling some stuff that has been collecting dust. I have been using phone apps that sell directly to other local buyers and sellers. It has been fairly successful using the app because of the direct communication and ease of use. I highly recommend using these phone apps to sell some stuff you don’t need. Instead of throwing it out into a landfill or donating it, try to sell and make some pocket change. It will take a little bit of effort, but is very satisfying that it has gone to someone who will value it and use it.
Pricing is Important
The world is revolved around people selling stuff and people buying stuff. Stuff is denominated in currency, and marked by price. Every year in the U.S., the day after Thanksgiving holiday is marked by excessive buying of consumer goods. Stuff that people really don’t need, and the need to buy things for others due to a sense of obligation, guilt, or tradition. This is also the time when one will see deep discounts from retailers and manufacturers, as they try to prime their revenues for a big Q4. Shoppers anticipate these deals, and they also buy because of the perceived value.
People will buy a product because of the perceived value. They will buy a more expensive computer, because of the perceived value in the performance of either the CPU, the graphics card, memory, hard-drive, or screen resolution. When two identical objects are priced differently, studies have shown that people prefer to choose the more expensive item. The perceived value of a more expensive item is higher!
Three Strategies for Pricing Your Items
- Do your research first. I generally tend to do a quick search online to determine what I am selling is worth any value. One may decide that it is only a couple of bucks and it is not worth the time to sell. However, you may consider try grouping some items, to aggregate them to a higher price. Like a set of different hand tools. This will give one the range of pricing that will be the starting point. Even small items can be worth a lot. There is a small figurine of a defunct web application that I had gotten for free. I thought would be worth maybe $5 USD. However, after looking online, it turns out to a be a collectible. Surprisingly, some are being sold on eBay for more than $200 USD. There can be some hidden gems hidden, so it is best to do a quick check.
- Have a higher offer price than the selling price. Usually, it is said that the one who says the price first actually loses. Since these apps require a price to be entered, it is always at a disadvantage for the seller. However, one can determine two prices. Price that they are willing to sell at, and the offer price. The offer price will be higher than the selling price. This will become the starting point of the negotiation. It is interesting that majority of other cultures outside the U.S. that finds it acceptable to haggle in price. Most would not try to negotiate in price, especially in retail stores. When selling your items, one should expect people to offer to buy at a lower price. If they actually do commit to my offer price, great! Now, I have sold the product for more money than I was willing to sell. No need to negotiate further. Agreed and done.
- Price the item higher than what you think it should sell. Our perception of value is different than others. There may be some sellers who think the item is more valuable that what is worth, e.g. some cryptocurrencies or “shamcoins”. If you want to sell it quickly, consider lowering it below the prices researched. Otherwise, the offer price should be always a bit higher than your perceived value of the item. One can always lower the price of the item to sell. Rarely, one can raise the price after the buyer has been found.
I hope this helps you to maximize your profits. Happy selling!