Getting your pricing just right is one of the biggest challenges resellers face. Too low, and you risk losing out on profits; too high, and potential buyers might scroll right past your listings. But with the right strategies, you can master the art of pricing to turn a profit while staying competitive.
Read on to learn seven simple steps that will help you price your products confidently and strategically.
Key Takeaways:
- Comp research is crucial: Analyze comparable items, considering both active and sold listings for accurate pricing insights.
- Know your numbers: Always account for expenses like your cost of goods, platform fees, and shipping to calculate a profitable price.
- Optimize listings for visibility: Use SEO keywords, clear photos, and detailed descriptions to make your items stand out and command better prices.
- Crosslisting with Vendoo: By combining a smart pricing strategy with Vendoo’s crosslisting tools, resellers can maximize their profits.
1. Research Comparable Items
The first step in pricing your items is to search for similar items across marketplaces and see what they’re selling for. Experienced sellers call this process comp research.
To do comp research, you need to type a keyword into the platform’s search bar and filter the results by brand, category, color, and other relevant attributes to make sure you’re viewing identical or very similar products.
When analyzing the search results, pay attention to:
- Condition: Are the similar items new or pre-owned? If most comparables are sold as new or in great condition and your item has some visible wear, you may have to price it significantly lower, even if it’s a high-demand, trendy product.
- Supply vs demand: The fundamental principle of economics is that when supply is higher than demand, prices drop. While it’s not always possible to identify the current demand for a particular item, the abundance of similar listings on marketplaces is a sure sign of high supply and competition, so pricing lower can be a good idea in this case.
- Seller success: Look at listings that actually sold, rather than just asking prices, to understand what buyers are willing to pay.
On many platforms, you can filter your search by active and sold listings, which allows you to get a clear picture of pricing trends. Analyzing this data can help you calculate a sell-through rate for a particular product, i.e. to understand how fast or slow items are selling.
💡Tip: If you’re selling on eBay and have access to Seller Hub, check out eBay’s product research tool for resellers, which offers lots of valuable insights like sold price range, average sold price, and sell-through rate.
Learn more about eBay Seller Hub in our article Mastering the eBay Seller Hub 2024.
2. Analyze Market Trends
Market trends can heavily influence how much you should charge for your items. Here are some factors to consider:
- Retail price: The original price you paid for your item can serve as a baseline for setting your resale price. But since retail prices are affected by demand and supply, you should always check the current retail price as well.
- Economic climate: You may be able to set higher prices during good economic times when people spend more freely. When the economy slows, buyers may be less willing to splurge on non-essential items and more interested in getting a good deal on essentials, so you’ll have to adjust your prices accordingly.
- Seasonality: Certain items sell better during specific seasons. For instance, a cashmere sweater will probably sell at a higher price in colder months compared to the off-season.
- Value perception: Limited editions, vintage finds, no longer produced products, and rare items are usually viewed as more valuable. Pricing them may be tough due to their uniqueness and a lack of aftermarket insights, so it’s always a good idea to price them up.
💡Tip: Revisit your older listings occasionally and re-do comp research on them. Trends and values of your items may fluctuate, so something you listed a few months ago may have a different resale value today.
3. Calculate Your Expenses
An important step in pricing a product to make a profit is to calculate all the expenses. Your costs may include:
- Cost of goods: The amount you paid to source the item.
- Packaging: Boxes, tape, and protective packaging all add up.
- Shipping costs: If you’re offering free shipping, be sure to add that expense into your pricing.
- Platform fees: Each selling platform comes with its own fees. Whether it’s a flat percentage of your sale, a fee for promoting your listings, or a payment processing fee, these costs can significantly eat into your profit margins if not accounted for. You can use a tool like OmniProfit for quick calculations.
Add these expenses together to calculate your minimum breakeven price. Selling below this number would mean you’re taking a loss.
You may also be interested in A Reseller’s Guide to Marketplace Fees.
4. Price Lower As a New Seller
If you’re new to reselling or are starting fresh on a new platform, your temporary pricing strategy can involve pricing lower than other sellers. This is a good way to make quick sales and earn a couple of great reviews so you can start building your seller reputation.
Don’t fall for it long-term, though. Undercutting is generally considered a bad idea, as it deflates prices for the entire market, and your future profit potential may be affected as well.
To learn more about pricing, check out A Reseller’s Guide to Creating a Pricing Strategy.
5. Price Higher to Account for Offers
Discounts and offers are great ways to attract more buyers and close sales faster. Most sellers prefer to set higher prices to account for those offers, adding 15-30% on top of the price they’re actually willing to take.
With more room for negotiations, you’ll be able to manipulate prices strategically:
- Bundle deals: Offer discounts for buyers who purchase multiple items. For example, “Buy 2, Get 10% Off.”
- Promotions during sales events: Participate in virtual sales events, such as Poshmark’s Closet Clear Out, to move your inventory faster.
- Send out bulk offers: As you scale up, sending out offers manually may become cumbersome. Vendoo can help you optimize this process by sending offers in bulk to all interested buyers on all of your marketplaces with just a few clicks.
6. Observe Your Sales Data and Adjust as Needed
Pricing isn’t a set-it-and-forget-it process. To understand if your prices are hitting the mark, you may ask yourself:
- Are items selling too quickly? If so, you might be pricing too low.
- Are items sitting unsold for too long? It might be time to lower your prices or improve your listings.
Most platforms provide analytics tools to help you track views, likes, and sales. Use this data to experiment and refine your pricing strategy.
👀 Did you know? When crosslisting with Vendoo, you get access to business analytics for all of your platforms on one dashboard. Learn more here!
7. Optimize Your Listings
One thing that new resellers often underestimate is the item's presentation. Buyers tend to associate the quality of your listings with the quality of your items, which may directly influence the price they are willing to pay.
Here are a few ways to make your items attractive and worthy of a higher price:
- Use clear photos. To give your items a fresher look, make sure to clean them before taking photos. Items like clothes and shoes may need additional prepping (e.g., steaming for wrinkles or applying a leather conditioner). Use good lighting and multiple angles to show your item at its best. If a marketplace allows adding videos, don’t skip this opportunity — it can significantly enhance your listing’s visibility.
- Write detailed descriptions. Fill out all the fields and include all the essential information about your item. As a seller, I try to predict the questions my buyers might have and address them upfront in the description. From a buyer’s perspective, I often prefer paying a bit more for a well-written, complete listing over one with missing details — it saves me time by eliminating unnecessary back-and-forth communication. Good grammar and formatting are also key.
- Maximize SEO. Hashtags and keywords help buyers find your listings more easily. On platforms like Poshmark, listings packed with keywords tend to appear on top of the search results even if they are priced higher. And the greater exposure, the more likes, shares, and sales you will see.
- Relist old items. If you’re not relisting your items regularly yet, it’s time to start doing so. It doesn’t matter how competitive your prices are if your listings just don’t show up in the newsfeed and search results. Vendoo’s Delist & Relist feature allows sellers to delete and relist their items in bulk across 10+ marketplaces.