One good thing I would say about eBay is that it has an excellent set up for clearing long-standing stock.

With the click of a couple of buttons you can get rid of stock and encourage multiple product orders and grow sales to previously unexpected levels.

I know this for certain because I do it all the time and never end up out of pocket.

You just go to the Markdown Manager inside your shop subscription and choose product categories or individual products to discount.

You can choose to reduce prices by a specific percentage or by knocking a specified amount of money off the original price.

So you can, for example, discount some goods by 50% and others by ten pounds, depending on products themselves and individual profit margins.

Tip: This is what Shopify – http://www.shopify.com – suggests when you can’t decide between percentage and fixed price discount…

‘If your item is less than $100.00, use a percentage discount, if higher, use a fixed amount discount. This is a psychological trigger that will result in the highest perceived value for your customers.’

Note: I think the ‘one hundred’ is the operative phrase and will apply to other country currencies, not just US dollars.

When you’re finished, you set the sale to run between one and fourteen days and click to make the sale go live.

Various conditions and guidelines apply to Markdown Manager promotions which you can read about at:http://sellercentre.ebay.co.uk/business/markdown-manager

This is what sellers can expect:

– Some first time visitors will see a listing, like the product and its price and buy. Many will become regular buyers.

– People who liked a product but couldn’t afford it at the time will add it to their watch list to think about later. They will be told about the sale and many will buy. They too might become repeat customers.

– Some people will make multiple purchases straight away and continue buying into the distant future.

That’s the good news; the bad news is that regular sales and discounts can end up losing the seller money and sometimes also tarnish his reputation.

This is how and why with advice to help you avoid common problems:

* Some people associate high price with superior quality and consider sales a means of offloading low quality items.

Too many sales at short intervals support that point of view and tempt some people to remove your product from their watched listings and you from their favourite sellers list.

On the other hand, customer only sales, appearing to reward their loyalty, have a more positive effect on big spend buyers and can be achieved by promoting discounts on higher price products in newsletters and emails to select buyers.

* It’s very easy for sellers to make mistakes in some or all of their discount listings and end up selling at a loss.

One example is where a seller offers what appears to be free delivery, to benefit their placement in eBay search returns, but they add the cost of delivery to their product’s unit price. Then when there’s a sale, delivery costs are cut along with product prices.

So say, for instance, you have a small collectible priced three pounds which costs one pound to post.  Your standard price becomes four pounds with free postage. Then you run a 50% sale and take two pounds per order which has to cover product acquisition costs, eBay and PayPal fees and one pound postage. You might be selling at a loss.

But only the product price is discounted when a seller runs a sale with postage listed separately. For that collectible just mentioned, a 50% sale will earn the seller £1.50 plus £1 postage, fifty pence more than the sale with postage included in the product price. He might still make a worthwhile profit.

That suggests sellers should avoid sales on low price products with free delivery.

Another common problem occurs where sellers unwittingly leave Best Offer in place on a discounted product. Even though offers must be considered manually on sale items, the sheer volume of orders generated by a sale can cause sellers to rush and accept lossmaking offers.

The solution is either to avoid running sales on items with Best Offer included or remove Best Offer from listings before running sales.

* People who might otherwise pay full price will often delay buying until a sale appears and then buy sufficient product to last through to the next sale. The answer is to run sales at longer intervals and make reduced price multiple product offers in the meantime. 

* It’s very tempting to run a sale to benefit cash flow or remove long-standing stock from inventory. But discounts should never be applied to goods attracting regular full price purchases, unless demand has slowed significantly or the product is going out of fashion or the seller going out of business.

* Heavy discounts tend to attract bargain hunters who won’t become regular buyers for full price products and are a frequent source of complaints, requests for refund and derogatory feedback. For whatever reason, listings for higher price products tend to be studied more carefully before purchase than heavily discounted products and lead to fewer SNAD – Significantly Not AsDescribed – reports.

All of that said, there are times when running a big discount sale can benefit sellers, as where:

* A fixed price product has been listed for several months, incurring monthly listing fees and attracting few or no visitors, viewers or buyers. Top researchers say a fixed price product that hasn’t sold within three months is either overpriced or has limited or non-existent demand. A reduced price might work well.

* The seller has insufficient capital to pay an imminent bill, for income tax or credit card, for example, and late payment will incur fines and interest higher than profits forfeited from running a sale.

Last but not least, as for most business decisions, the seller should use experience gained from one sale to maximise benefits and minimise complications from future events.

The post The Right Way to Offer Sales and Discounts on eBay appeared first on Auction Genie.