Sunday, April 6, 2008

Appraising the value of your goods

“Value” can be tough to define. The ideal price according to veteran sellers is 100% over cost. That means that if you pay Rs.200, you should begin at Rs.400. Sometimes this may be unrealistic for whatever you are selling.

In many ways, merchandise can be like the stock market where it experiences

a dramatic and sudden reversal in either direction.

The following could serve as guidelines for assigning value to an item.

1) Research - The best way to do research is right on the online auction sites

themselves. Check completed auctions, as well as current ones, for price

comparisons. On many online auction sites, you can look at past auctions for up to 60 days. This type of research will give you valuable guidance.

On the flip side, also pay attention to similar items that didn’t sell. Figure out

why they didn’t sell.


2) Pay an expert - Because of the huge demand, there are now online sites

that will supply an expert appraisal for you, mostly at reasonable prices.

Once again -- just because an item is valued at Rs.5000 doesn’t

mean that someone will actually pay that much. Even the appraisers themselves acknowledge that we should use caution with these appraisals, especially as buyers. It is easy for unscrupulous people to submit deceptive pictures.

Yahoo has a special service that helps sellers link to an authenticator

(expert) or a grading service.

The following are some of the authenticators:

http://psacard.com/

http://www.eppraisals.com/ and many others are there.


3) Price guides... If you walk into book stores, you can find lots of “price

guides.” As we mentioned before, don’t take these too seriously. They are just

that... guides. As well, many people sell merchandise that is new and therefore

not included.

In general, price guides aren’t all that helpful. They can certainly make it

easier to decide if an item is relatively rare and whether you should be

purchasing it or not. For example, if you see a stamp and your price guide

says that only seven were ever made in the world, start negotiating!


4) Fellow auctioneers can help - Look no further for genuine guidance.

Most auction users are very friendly and are totally willing to help those with

questions. Even so, look at the feedback on these helpful folks before you take

their advice too seriously.


5) Set a reserve price - When sellers are totally stumped about the value

of an item, they often try and use the “Cover Your Assets” strategy by creating a reserve auction. However, as we discussed before, many buyers absolutely refuse to participate in a reserve auction.

eBay recommends using the following criteria to determine if you should use

the reserve feature for your item...

Is your item very valuable? If it is, you might consider a reserve. Even those

collectors who are drooling on their computer screen over your 1824 signed

edition want to feel like they are getting a bargain. If you start the bidding low,

hopefully they will be hooked when it begins to rise.

Do you believe your audience is large enough that you can afford to give up

that large percentage of buyers who won’t play the reserve game?

Is your item hot, hot, hot? If it is then forget the reserve. If the item is in heavy

demand, you can count on competition. Set a reasonable minimum and let the

excitement build.

If your market is a real mystery, then go for a reserve. You certainly don’t

want to give away your merchandise and then find out later that your buyer

made the deal of the century. Just be aware that this can be a dangerous

decision because you may price yourself out of the (unknown) market.

If your investment is low, you may be better off to forget the reserve. Set your

minimum profit level and let the market set the rules.

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