People will pay what other people paid

Re-read that sentence slowly and let me unpack it. People (the newly arriving crowd) will pay…what people (the happily leaving crowd) paid. If the newly arriving people enter the scene and they see, (and believe), that the happily leaving people had a nice experience, they’ll follow the example given.

Here is an example which I‘m sure you can relate to, (at any price point):

Ever go into a restaurant that is fancier than where you normally go. When you get there you see it‘s full of people and look at the prices on the menu and think, “What?!”. But then you calm down, look around the restaurant and see all the happy people happily ordering, and think, “Okay, I guess this is how it works here – and it‘s worth it”. You ponder all the good things that will happen if you maintain your composure, and don’t act irritated or cheap, and just go along with it all. Sometimes the shock is too great, or your wallet is too empty and you do get up and leave, but much more frequently, you go along.

That’s social proof in action, and fostering it in your Ebay auctions is a huge part of getting high final bid prices. You are in the exact same situation as the restaurant owner, except you, (probably), have NO overhead cost to worry about, and if you get it wrong today, you can try again tomorrow with a different approach.

Let’s look at the reverse: Do people regularly pay you NOTHING for your item, by not bidding? Remember, people will pay what other people paid…so you’ve got a real problem if this is happening. (Read my posts on spiral management that speak to this topic).

People come to your auction and see no bids…and they look at your other items for sale and see no bids, and they look at your transaction history and see a lot of no bidding. And guess what they’re going to do, NOT BID!

Your failure today will reinforce your failure tomorrow unless you make some changes. someone once said,

“The definition of insanity is doing the same thing and expecting a different outcome”.

What will people pay for something? It’s anyone’s guess right? You know the price you want to get, and sometimes you’re tempted to put your items out as a ‘buy-it-now’ with this ‘ideal price’ plugged right in for the whole world to see. You think that by telling people what the price should be, they will agree. You figure you’ll just tell everyone what you think your items are worth and require them to agree with you. This is a good idea, if people validate your perspective by agreeing with you and actually, regularly, paying that amount.

However, given the way Ebay is structured, if your item ends and no one has validated your price point by saying ‘yes’, and buying the item, then your failure is public and it damages your credibility.

Every time you fail publicly at a certain price point, you are training your bidders to expect a low(er) price next time. But your opinion about price isn’t valued by bidders or buyers. Do you care what the used Car Salesman says a car is worth? No way. You only care what the wisdom of the crowd, or a third party authority says it’s worth.

Buy-it-now listings are not the way to sell ’treasure’ type items.

Yes, you’re giving people the convenience of not being involved in the extended auction process. People will sometimes pay for that convenience. But you are also forcing them to either 1) believe your pricing estimate or 2) research and comparison shop – which is frequently NOT what you want to encourage people to do. Because unless your item is extremely rare, there is probably a substitute item that can be found for a lower price point. And your potential buyer just walked out the door.

Avoid buy-it-now pricing for treasure type items in Ebay.

Publicize what people pay for your auctions, (when it’s a good result).

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