Why are eBay prices so cheap?

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Joined: 27 Jul 07
15 Jun 16 02:10:29 am
One of the most popular questions we ever get is "why are the supplier prices more expensive than eBay?"

It's not an easy question to answer simply because there are many factors in play in regards to a platform like an eBay or an Amazon, so I'll try and shed some light on some of those factors to give members a much better understanding of those types of markets.

1. Competitivness - Of course one of the big draw cards that attract sellers to a platform like these is huge traffic and that makes total sense. On the face of it, the more traffic you have, the more chances you have of converting sales. Unfortunatly, it's not just you thinking that, it's thousands of people from all over the world thinking the exact same thing and that of course equals mega competition for sales.

So straight away you are now in an environment where cutting as much fat out of your price is important to stay competitive. So of course this leads to people selling on extremely tight margins to secure their sales.

2. Supply Model - Prices are not always what they seem at first glance. For example, someone choosing a dropship model will have dropship prices they are working from, but then they can come up against sellers using wholesale models or even worse, selling factory direct. This is like comparing apples to voltswagons, it's not possible. If you're working on a dropship price and then comparing that to a seller who is spending big dollars to buy in large volume to ensure the best possible item price and then cutting their sales margin right back to secure marketshare and relying on a high turnover profit model to drive cashflow, then your dropship price is never going to be even close.

Seasonal - Many products are seasonal, so sellers may well have their prices slashed to the bone, even to cost or below to try and clear last season's left over stock. So you really need to look closely at the products you are trying to sell to see if this could be a factor in the currrent market.

Marketing Techniques - Techiniques like "Loss Leaders", where products are being sold at cost price or even below to attract buyers to a store or even to encourage them to send the seller their email address so the seller can then sell to them directly from their own site outside of an eBay or an Amazon.

Essentially, what you see on the surface when comparing prices isn't always the full picture. Without knowing who the seller is buying from, without knowing what supply method they are using, without knowing what volume and price they are buying at, without knowing if they are using a marketing technique and pricing accordingly and so and so and so on ....... without knowing everything about the compeitior, trying to compare and make sense of prices is never going to make any sense.

Mark (fudjj)

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21 Jun 16 05:45:01 am
most of stores and listings on eBay are from CHINA, what`s more they do not have a expenditure about promotion of their brand.

LePetco OEM/ODM manufacturer of dog&pet products wholesale supplier,looking for worldwide partners and wholesalers. More details please check:Link hidden: Login to view
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23 Sep 16 06:23:31 am
Agree with the posts here. These companies have high asset turnover and low profit margin strategy. They sell as many products as they can at a cheaper price and rely on high sales volume to profit more. Most eBay sellers got their goods directly from factories or suppliers with a wide variety of goods and they buy mostly in bulk to be able to get the best wholesale price possible. Then, these retailers would pass off the savings to the buyers by pricing the goods cheaper hence, smaller profit margin for them. However, collectively they earn more since inventory turnover is faster.

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