| Excerpt from, "eBay
Strategies: 10 Proven Methods to Maximize Your eBay Business," by Scot Wingo. © 2005
Scot Wingo. Published by Prentice Hall Professional Technical Reference, reprinted on
AuctionBytes.com with permission of publisher. "Researching Decreasing ASPs" is excerpted from Chapter 5 (p. 104
– 110) of "eBay Strategies," not all graphics included in this reprint.
Researching Decreasing ASPs
If you encounter a significant decrease in ASPs, you can research the previous reasons
pretty easily to ascertain what could be at work. Here are the steps you can take to
research what may be driving down your ASPs:
1. Check current listings and completed items on eBay to
see what the competition is up to. If you have data on the top search terms for your SKU,
use them; if not, take a best guess at two to five search terms that buyers may be using
to find your items. What prices are the competitors selling for? Are there any listings
that really stand out from the others? Are there any BINs or fixed-price listings that are
lower than your selling price?
2. If you don’t find anything there, then you should
search a couple of the top e-commerce/shopping engines to see what "street"
prices are for the item. At the very least, you should check these sites:
www.amazon.com
www.overstock.com
www.shopping.com
www.froogle.com
www.pricegrabber.com
www.pricescan.com
These six searches will cover most online and off-line
competitors.
3. If you have reached this step and
still can’t find what has caused your ASPs to decrease, then you should check for
news on the manufacturer and model and category you are selling. Perhaps a new product has
been released, or some other external influences are at work.
The best way to demonstrate ASP research is through a
real-world example. In this example, SellerX has noticed a significant decrease in the ASP
for a handheld GPS—the Garmin eTrex Legend (with 8MB memory). This item has sold
briskly for $189 over the last several months, and now the item fetches $160 or
less—a 16% price decrease! The seller’s cost on these items is $150, so as you
can imagine, he is very concerned about this dramatic decrease. SellerX typically sells 30
of these a week, and it has been a greatperforming SKU until the decrease.
First, SellerX goes to eBay to see what the
competition is up to. He learns that the top search for this item is "garmin etrex
legend." Figure 5.3 shows a sample eBay search for this term.
Of the 92 results, the lowest BIN is $167, which is
SellerX. As you can see, there are BINs that are higher—in the $189 range—so
there is nothing obvious here. There are some no-reserve auctions, so SellerX takes a
quick look at completed items, as shown in Figure 5.4.
After analyzing these results, SellerX finds that there is
a seller named "bluepro14" who has sold some items for $167. It is hard to tell
from completed items if bluepro14 is selling in volume. A useful trick for exploring
competition on eBay is to look at an individual seller’s selling history. To do this
from the eBay home page:
1. Click on "Search" in the menu bar.
2. Click the "By Seller" tab.
3. Enter the seller’s information, as shown in Figure 5.5, being sure to select "All" in the
"Include completed items" section.
After exploring bluepro14’s statistics, SellerX
sees that bluepro14 sold only four eTrex units over the last 30 days and thus is most
unlikely to be responsible for such a significant decrease.
Next, SellerX checks Shopping.com, whose results are shown
in Figure 5.6.
The price range listed by Shopping.com for the SKU is $158
to $252—the middle point of this is $205, which seems reasonable. Also, no name-brand
retailers are listed as being lower than $199, which looks good as well. SellerX then
checks PriceGrabber.com, PriceSCAN.com, and a number of top retailers.
Next, SellerX checks Amazon.com, as shown in Figure 5.7. As
you can see from Figure 5.7, Amazon.com does not list its price for this item, so SellerX
logs in and adds it to his Amazon.com shopping cart. Much to SellerX’s surprise,
after adding the SKU to the shopping cart, he sees that theitem is selling at Amazon.com
for $164—a significant discount from most eBay sellers, as well as other retailers.
Finally, SellerX goes to the Garmin site, does a search,
and quickly learns that Garmin has lowered the price on the model above the Legend and
announced another highend model.
After about 30 minutes of research and armed with knowledge
of the product life cycle, SellerX now knows what is going on. Garmin is liquidating the
Legend to make room for the new products in the consumer GPS product line. Amazon.com
seems to have purchased the end-of-life product in bulk for a significant discount and
thus is able to offer it at a lower price than SellerX.
SellerX’s strategy going forward with this knowledge
is simple: Sell the current stock for as much as possible (in the $160 to $164 range, to
compete with Amazon.com) and do not buy the product anymore for $150, because that price
doesn’t meet the margin requirement. Also, given the liquidation environment, SellerX
has decided that even if he is able to get some more of the product for a discount, it is
probably best to wait until the current supply has worked through the system and the ASP
stabilizes.
"eBay
Strategies" is for sale on Amazon for $19.99 plus S&H:
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