If you're a seller and have ever had trouble selling a product or can't understand why an item was priced so high on a listing, economics can help explain those pricing puzzles and indicate the fair price for a good. We will explore how supply and demand determine the price of an item as well as specific factors that affect an individual's willingness to buy something on resale marketplaces.
Section 1: Buy low, sell high
The Internet is a great place for anyone to sell anything. Whether it's new or used. It's also a great place for people to buy stuff and find people willing to pay a little more for it. And that's where the two most important things to know come into play: knowing what products are selling well on the resale marketplaces and knowing how to price them correctly so that you make a profit.
Buy low, sell high is a mantra many online sellers adopt when it comes to pricing their products. But – and this is a big but – understanding what factors impact the resale market is crucial. This information can help you identify the products that are most likely to be the best buys for your business, and act upon them accordingly. Especially as an entrepreneur with limited resources, knowing what is selling well can be the difference between making $1,000 or $10,000 on your resale investments.
What is a 'buy low, sell high' strategy, and why should resellers focus on it? A lot of people use resale platforms to buy and sell products without putting much effort into it. When you look at the bigger picture, though, this can be quite profitable. It is much easier for a Depop or Etsy business to buy a lots of cheap or discounted products at charity shops and resell them at a higher price. This relies on having some market knowledge about what is selling well and what to avoid. However, there are several disadvantages to this tactic. You may get only a small amount of traffic from your site and a small amount of sales. You also may have trouble getting a solid return on your money because most people who buy on the resale marketplaces are also looking for good value and ask for price reductions.
Pricing on a resale site is a critical decision. It has an impact on your success as a seller, both now and in the future as other sellers continue to offer more products to take advantage of growing demand for pre-owned items. Before you begin selling on a resale platform, it’s important to understand what factors increase or decrease your price you should set. This information can help you decide if it makes sense to choose a particular platform over others, and it can also help you know what sort of marketing strategies will be most effective in targeting prospects on different reseller platforms.
Section 2: Demand & Supply
Supply and demand is one of the most important factors affecting retail prices. The supply of a good generally increases with its demand, and vice versa. If you're a consumer who goes to a resale marketplaces to buy goods, you need to understand these factors in order to decide whether the price you set is a good value. It's almost impossible to find an exact price for an item once it's been sold, but it's often feasible to find a good estimate using publicly available information.
Each day there are millions of products listed on online marketplaces such as eBay, Depop and Etsy. All those products have different supply and demand elements which can influence their prices. The more items that are bought, the more prices will rise. This has an impact on how much a seller can make from their marketplace business.
A popular question among resale store owners is how to determine the best pricing strategy for their products. There are many factors to take into account such as brand reputation, brand image, demand forecast for the upcoming year, current market conditions and so forth.
The demand for a specific product can affect how much it costs to resell. The more players trying to get a product on the market, the higher the price might be. If you want to make money quickly selling secondhand clothing or other products, you should learn how to price your products properly. First you need to figure out how much demand there is for the product. Then you can determine how much prices should go up or down based on how much consumers are willing to pay.
This means that it pays to be a knowledgeable product reseller, especially when it comes to knowing what items are in demand and what the best ways are to get your products into the hands of buyers who are looking to purchase them at lower prices. High demand coupled with little supply causes the price to be really high; that's why when you’re trying to figure out how much to charge for a piece of clothing, the first thing you should consider is how many alternatives are available on the platform you use.
If you are a designer or an entrepreneur who designs and sells custom garments or products online, you may have to sell your own products at higher than normal prices in order to make money. These are known as demand side strategies and are prevalent in the apparel, accessories, and home markets. Ultimately, the demand of the product can affect the seller's decision whether they want to give you a higher price or not. There will always be people willing to pay more for certain products, especially when there is very little supply available.
The supply of clothing products on market has an impact on the price that buyers will pay. The supply consists of products ready to be sold. Supply is the key factor that affects the resale market and can determine how much money you will make, or how much risk you will take. When there is a great abundance of available products, it may be more difficult for your product to catch the attention of prospective buyers. In which case, it is sensible to reduce the price you are currently charging such that it becomes more appealing to price-conscious buyers.
Section 3: Other factors that explain why some products will sell quicker than others
While there are many factors that determine whether your product will sell or not on a particular platform (and there are several differences between the platforms), there are several items that can greatly impact the likelihood that you will make a sale. These factors are:
When you are a resale merchant and dealing with customers, reviews matter. This is because every customer –whether it is a loyal customer or a first time customer–has a different expectation of your business and your service. Reviews are important for both business success and customer retention. Help your prospective buyers find the right product to satisfy their need for quality and value, while saving them money on price. Interestingly, customers also report that when they purchase from places with high reputation in the community, they tend to feel more confident about the purchase and enjoy the process more.
Reviews help an item or business stand out and help potential purchasers decide whether they should buy it or not. There are many factors that an item's reputation can depend on such as the manufacturer, design, quality of materials, cleanliness etc. Reviews become more influential if consumers are impressed by how well an item's manufacturer or seller handled their problem.
A successful reseller needs to find ways to increase his or her profits; by this I mean providing customers with high-quality photos that will help them make better purchases and communicating frequently with clients about sales opportunities.
One of the most important aspects for resellers is having good pictures to use for all of your product listings.
It has been proven time and again that consumers will pay more for an identical product if they believe it is being sold at a reduced price.
Takeaway: Aligning with the trends and keeping a hawk's eye on supply and demand will make you money on resale sites.