How to sell products on discounts on Ebay?

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The fixing of the selling price of products or services is an important and delicate work to a contractor because the prices must be fair so that customers are interested enough. A sales price can be set by combining several methods: in relation to a mark-up or cost price, in relation to the competition and in relation to psychological impacts. It is important to set a selling price that is fair according to your market, the quality of your product or service, and the offer offered by the competition.

Set a selling price based on the margin rate

The selling price of a product can also be set based on a target markup. The goal is to offer a price that allows you to earn a certain amount on each sale made. The margin is the difference between a selling price and a buying price. The calculation of the selling price from the margin rate is as follows:

Sale price = Purchase price * (1 + margin rate)

Example: a company plans to achieve a commercial margin of 30% on a range of products that it purchases for a unit cost excluding tax of 100 dollars. To achieve such a margin rate, the sales price excluding tax of the product must be equal to 130 dollars excluding tax.

Set a selling price based on the cost price

It is also possible to fix the selling price in relation to the cost price of a product or a service. The production cost corresponds to the total amount of direct and indirect, fixed and variable, production and distribution costs incurred for a unit of good or service sold. This method is particularly suitable for service providers to set the cost of their intervention or their hourly rate. The process is more advanced than fixing the selling price in relation to the margin rate, because all the costs incurred by the company to sell the product or service are taken into account. For selling on ebay these price options.

The calculation of the selling price from the cost price is carried out as follows:

Selling price = cost price + desired gain

Example: a company produces good A for a unit cost of 150 dollars. She hopes to achieve a gain of 20 dollars on the sale of each good A. The sale price must therefore be equal to 170 dollars to achieve the expected profitability objective.

Set a selling price based on competitor prices

To set a selling price, we cannot only base ourselves on financial calculations, it is also necessary to compare the envisaged selling price of a product or service with the reality of the market , that is to say the prices offered by your competitors:

If your products or services have similar characteristics to those of your competitors, the selling prices offered should be close to the prices they are offering.

If you decide to set a lower selling price than your competition, you need to make sure that you can still hit your breakeven point.