11 Reasons Why eBay Items Are So Cheap
- Chinese sellers – There are big wholesalers as well as manufacturers in China who sell directly to the retail customers all over the world via eBay. In such cases, they obviously get advantage of the rock bottom item costs. Apart from that, shipping is also very cheap.
- Feedback builders – A classic tactic for the sellers who are just starting out is to sell their items at a very low price – after all they need to entice buyers somehow.
- Sales history boosters – It is another classic tactic to reach the number 1 spot on eBay’s search ranking. Sometimes people start with a very low price (often BELOW what it costs) in order to get a large number of sales in as quickly as possible.
- Loss leaders – While on the matter of selling items below their cost price, loss leaders are not only for new listings – they are often used to get new customers (i.e. to build your mailing list) and to promote other profitable products for sale.
- Clearing out overstock – Several businesses come to a point where they sell end of line/out-dated stock at a loss, just to get rid of it and to clear some much needed warehouse space.
- Selling one-off clearance stock – There can be some stocks that can be bought well below the normal market price, either from liquidation sales or from the companies that have gone bust. Obviously, products can’t be sourced like this consistently but it does account for a decent minority of the “unmatchable” prices on eBay.
- Multi-buy items – There are often products that seem completely unprofitable at sale of single quantity, but if we check the sales history, we will see that the majority of purchases involve single customer buying more than 1 or even more of that item in one go (For example, LED light bulbs).
- Shipping costs abusers – yes, there are a number of sellers who somehow abuse the shipping rates and pay less than what they should – paying large letter fees for small parcels for example. I don’t know exactly how they do this (I’m assuming it’s by fraudulently using the “mate’s rates” that some shipping companies offer employees) but they usually don’t last long anyway.
- Hobby sellers – This may sound hard to believe for those of us trying to run a business on eBay, but there are a lot of sellers who simply aren’t bothered about the profit they make. They do it as a hobby and are happy to subsidise losses here and there.
- Sellers with high buying power – When a seller can buy stock in huge quantities, he is obviously going to get the best prices and lowest shipping cost per item.
- Failed sellers – I saved this one to last, as I personally think it probably contributes the most to this phenomenon. There are a number of sellers on eBay who have no choice but to sell their stock very cheaply, simply because they couldn’t get the price they were looking for.