By Ken Korczak
At last, I have been vindicated in my belief that starting eBay auctions at a very low price will result in a higher sale price in the end. I have a friend whom I often partner up with on eBay sales, and we have had many an argument about whether it’s best to start the auction at a high opening bid, or a ridiculously low bid.
My friend’s argument is this: When you place a high opening bid price, people will think you are selling something of high value. If you place your bid too low, they will assume something is wrong with the item, thus the low asking price.
My counter-argument was this: Most people go to eBay because they are looking for an amazing deal on something they have already decided to buy. When you start at a very low price, fewer people are intimidated to jump in and bid. Once they are committed to bidding, they’ll have greater motivation to keep bidding, and they’ll get caught up in outbidding the other bidders.
Well, I now have been proven right if researchers at Northwestern University’s Kellogg School of Management are correct. Researcher Prof. Adam Galinsky found after extensive lab experiments that starting at lower prices almost always results in a higher sale price for eBay items. Galinsky said:
“Early bidders get trapped because they’ve spent time and energy in the auction, and it motivated them to spend more time and energy on that auction.”
Interestingly, this bidding mentality on eBay is the opposite of what occurs in the “real world” of sales. Outside of eBay, higher prices tend to focus a shopper’s attention on the better aspects of products. For example, a car with a very high price will tend to make a shopper admire the car’s luxury features, such as its cool stereo system or sleek look. But a low-price car will make people skeptical and have them wondering about the car’s engine, dents or paint job.
So — if you want to get more bidding and a higher end price for your eBay item, start the price low, and let the bidding begin! You can’t argue with science!
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