Product Pricing, How would you handle this

I wouldn't bother trying to match a price on ebay, unless that is where you are trying to sell the products.

Auction sites can be a crap shoot, the cheap items tend to come and go pretty quickly.

He may be the son of the primary manufacturer, or has a sweet deal through a supplier, but I wouldn't consider it your direct competition since you are an ecommerce site--compete with the other ecommerce sites, don't worry about fleabay

Take your wholesale price, multiply it by 1.35 (for a 35 percent markup if it's a dropship product)

Then add the shipping price, then add the dropship fee.

That is the price you charge for the product

HOWEVER - you need to know if that price is even COMPETITIVE. One thing you need to do BEFORE you even build a website is find the price items are SELLING for, and to see if the formula above fits BETWEEN the highest and the lowest RANGE of prices.

If your supplier gives you pricing of the product that fits BETWEEN the retail prices using that formula, then the supplier has competitive prices. If not? You need to negotiate lower.

Basically take the model number of the product (found in the wholesale price list) and Google it. Take the top 10 results for the pricing range)

If they won't negotiate? Move on, you cannot be competitive.

There is no reason to build a website and 2 years later wonder why you've never made a sale!

Don't take the MSRP's word for it. Take the MARKET WORTH's word for it.

Oh, so you are just competing on price. Well then simply lower your price below the eBay person. Then they will lower their price, and then you will, and so on. And when you two are done the other guys will continue to make money because apparently they are doing something that allow them to do so.

There are always outliers, especially on eBay. Learn what the high price folks are doing and replicate and improve on that. Forget the eBay guy, he's a fool (like most folks on that site who trash every market they enter).

If everyone bought things at the lowest price we would all shop at Walmart. But we don't.

Ever heard the phrase "loss leader"? Wal-Mart is a great example of this, they actually LOSE money on hundreds of their products. Know why? Because (1) When was the last time you stood in line at Wal-mart and only bought one thing, and (2) It allows them to showcase items and continue their "always the lowest price" claim.

They aren't always the lowest price, but by having so many items that are priced well below what other retailers can even BUY IT for, they earned that reputation and nobody notices that on many other items they're more expensive than their competitors.

With that said, I'm not saying you should sell your products at a loss... BUT, how many more visitors would you get in the door, and how many other products would you be able to upsell them, if you were selling SOME of your products at cost? eBay sellers won't do that, and neither will most of your competitors.

The same psychology that works for Wal-Mart can work for you. Example: Some guy wants a new cell phone, and "everyone" has it for $50 or more. You have it for $38 and he finds you... it is now ingrained in his mind that you "have the best prices". So when you show him other upsells and related products, and he sees something else he needs that's reasonably priced, he will add that item to the cart WITHOUT doing any other further research.

Some people will only buy the one item - and that's fine too, because although you didn't make any money on that sale, you were able to move some product and get a free lead. You have his email and his address... you can sell something to that guy again later.

You know, this whole discussion frustrates me.

Why?

Because this is the reason there is little money to be made with independent online stores.

The bottom line is this.

If you want to go compete with Ebay, then go sell on Ebay. Because Ebay is making the money from the seller. They are nothing but a marketplace at this point (as is Amazon).

I see everyday guys come and go "selling at their lowest price" in which at the end of the day they have enough money to buy a small bag of rice.

These are called very bad businessmen.


Just because you see sales, does not mean that there is profit.

And PROFIT, is what will keep you in business, and your business moving in a forward growth pattern. (Nevermind even paying you perhaps.)


I have close friends in my distribution circles that tell me how some of these guys "open really strong", and then they run with the debt, and screw all the manufactures and wholesalers because at the end of the day they just realized that they weren't making any money.

Guess what..people start businesses to make money.