Auction Tip #1:
How Much Postage Should You Charge For Your Auctions?

How Much Postage Should You Charge For Your Auctions?

Before you can list an item for auction, you must first decide how much postage you will charge to deliver the item to the auction winner. This is a key element to setting up the auction because your decision can both affect your profit margin and attract or turn away bidders. I have read tips from some of the experts that say you must keep the postage low to get customers to place bids.

You Must First Do Research.

While you should certainly keep this advice in mind, I think you need to do further research before you decide on how much postage to charge for your auction item. I think every category of items has to be looked at on an individual basis. When you decide what you are going to sell, then head straight for the auction site where you will place your items. Let us say that you are going to be posting your item at Ebay. You need to use the Ebay search tool to do some product research. Type your product into the Ebay search engine. Look at the auctions that are currently selling your same product or one very similar. Get familiar with your competition. Now go to the upper right corner of the Ebay page. You will see a link that says "Advanced Search". Click on that link. Type your keyword in the search box, and then click on the little box next to "Completed listings only". Hit the search button. Ebay will bring up a page listing auctions for your keyword that have already closed. The bid prices that are in red are auctions that did not have a buyer. The bid prices in green are the auctions that sold. By studying each of these auction listings, you can see how the other ebay sellers priced their products and how much postage they charged. See which methods were actually attracting bidders resulting in sales. That will show you which were effective auction tactics.

You Must Then Do The Math.

But before you use these listing methods, look at the math and see if these methods will actually produce a true profit. If you sold your item for what those sellers were listing for and charged the same thing for postage and then subtracted your Ebay and Paypal fees and the cost of the item, would you still make a profit? If so, then you can copy their successful listing method. If not, then you are going to have to test different pricing and postage auction tactics to see what will make you money.

It Takes Different Auction Tactics For Different Product Categories.

The reason you have to research every product individually is because different products sell better with different auction tactics. Let us take a look at lingerie. I have found one product in this category that the Ebay market lets you sell it with a small to medium profit range and also allows you to charge about $2.00 more postage than actual postage charges. This helps cover at least partially your Ebay and Paypal fees. But another market is handled  with totally different auction tactics.

Auctions for CDs often start out with a penny bid. The postage is often set high enough to cover the cost of the product and the cost of the postage. Their may also be a little bit of profit in the postage charge too, depending on what the individual seller set their postage at and how good a price they paid for the product. The cost of the fees may be squeezed into the postage charge too. Whatever the bid mounts to will be icing on the cake. Hopefully a good listing will attract several bidders. While many sellers cover all their costs in the postage, some will offer lower postage rates. These sellers will have to get a higher bidding price to break even or make a profit. Of course, the higher the postage charge, the more it turns away the bidder. So don't get carried away. Look at what the other sellers are doing and apply the math to make sure it will be profitable. Also keep in mind that if you set your postage rates higher than the norm for that category, you will probably get bad feedback from your customers accusing you of sticking it to them. Bad feedback can mean a loss of future sales, so be careful. Do the research on each of your products, and you should come up with a winning product price and postage charge combination. Then you will know how much postage you can charge for your auctions to make the most profit.