Driving Maximum Value to Your Mission: The Best Reselling Methods
The internet has created a global marketplace that has become a revolutionary outlet for secondhand resellers to build new revenue streams. As a result, online resellers have a variety of e-commerce options for selling products. When it comes to the most popular online selling platforms and their selling methods, it usually comes down to making a decision between two options: An Auction which lets bidders drive the final price or a Buy It Now (BIN) format which lets the seller choose a fixed price.
With such a wide reach and so many options for selling online, it’s important resellers are using the best selling methods to generate the most revenue. This guide will provide definitive research and data points explaining how Auction format is a preferred selling method for secondhand resellers online.
Average Sold Prices
When it comes to selling online, the key metric is the price per item. Your organization undoubtedly has more to gain when your product sells at top value. So, we looked into thousands of products sold through our intuitive Lister software to analyze the final price per item in 28 different product categories.
Of the 28 categories, which included Clothing, Toys, Sports, Jewelry and more, 25 of them averaged higher selling prices in the Auction format versus the Buy It Now format. Among the highest margin of difference in Auction to Buy It Now included the following product categories:
- Instruments: sells for $47.62 higher in Auctions versus BIN
- Antiques: sells for $37.23 higher in Auctions versus BIN
- Jewelry: sells for $24.27 higher in Auctions versus BIN
Furthermore, over a half million data points determined the average sold price of Auction format listings to be $38.15. Comparatively, the Buy It Now format listings averages a staggering $14.73 lower at $23.42 for the final sold price.
For perspective, if your organization sells 250 items per day earning $14.73 more in an Auction format, you stand to gain an extra $3,682 on average per day or $1.34 million on average per year. Think about what that extra revenue could do for your organization in a year.
Rare and Unique Items
How about the ultra rare, hard to find, or collectible items you’re looking to list and sell online? Is it better to sell them at a fixed price or let the market drive the value?
Upright researched the selling history of Auction formatted listings and Buy It Now formatted listings of rare items in some of the highest grossing categories to determine which had gained sellers more revenue over time. The results overwhelmingly favored the Auction format.
We already know the Jewelry category averages $24.27 higher per item sold in the Auction format, but for this example, Upright examined a Genuine Omega Swiss Chronograph Watch using the different selling formats.
In a recent auction on ShopGoodwill, the rare timepiece sold for $12,601.00 with 80 bids. Comparatively, 8 listings in the same product, category, and titling sold on eBay in the Buy It Now format between January 2022 - January 2023 averaged $2,523.53. A difference of $10,077.47 in total.
Clothing is another popular category frequently sold in the Buy It Now format that deserves a second look from sellers.
A recent auction on ShopGoodwill for a Raccoon Fur Coat sold for $703.00 with a total of 10 bids. When we analyzed 1,476 Raccoon Fur Coats sold at a fixed price in the Buy It Now format on eBay, the average price was $158.82. A difference of $544.18 or a possible $803,209.68 in extra revenue if these sellers sold at auction instead.
Another example of rare clothing selling for higher value at auction is a pair of Lucchese Men’s Classic Handmade Black Leather Western Boots we saw sell on ShopGoodwill for $313.00. From here, we then analyzed the 263 listings of the same pair of shoes selling history on eBay. Those listings sold at an average of $216.73 as the final price. A difference of $96.27 per pair.
Move Your Inventory
Like most businesses, your warehouse space probably comes at a premium. You don’t always have space for items to collect dust for months or even weeks. You’ll likely want your product in and out the door in a timely manner, so you can collect payment and make room for new inventory.
This makes the Auction format an ideal listing style, because sellers can choose to list their items for as short as 1 day and as long as 10 days. Upright Labs’ data analyzing 650,000+ listings determined the average Auction to last 9.3 days while Buy It Now listings averaged a 21.8 day timeline. Meaning that on average, Auctions move products 12 days faster than Buy It Now listings and at a greater price. Your facility is making more money for you with Auctions.
If you are selling inventory at 250 items per day in an Auction format with an average selling price of $38.15, your inventory is attaining an average $9,537 daily or about $286,000 in revenue in 1 month’s time. Likely covering your operational costs for the month with a large margin.
However, if you were to strictly use Buy It Now listings using the same warehouse pricing model example, the results differ. If you are selling 250 items per day in a Buy It Now format with an average selling price of $23.42, your inventory is now only attaining an average $5,855 daily or about $176,000 in revenue in 1 month’s time.
Using only Buy It Now will yield nearly $110,000 lower earnings on average versus the Auction format. At an average selling price of $23.42, you’d have to list and sell about 4,700 more items each day with Buy It Now to recoup that amount.
The lower revenue will make a larger burden for your warehouse since Buy It Now listings average 21.8 days to sell. How long do you want items sitting on your shelves?
Also, your e-commerce team will likely have to work twice as hard to list an additional 4,700 more items - costing you more in overhead costs. Think about the costs involved with listing, shipping, and transporting inventory. Are resources and production a challenge for your team currently?
Finally, would you even have an extra 4,700 items to sell? If you need to sell that many more items to match the average Auction prices, then you’ll need to have an additional 1,715,000 sellable products each year.
So, not only do you stand to gain more in product value when listing your products in Auction format, but choosing the right selling method can be a crucial decision to your organization’s bottom line.
In conclusion, we are advocates for trying whatever works best for your organization to help your growth. Each organization is unique and their product flow, operation, and selling methods may not be one-size-fits-all. However, our research shows that Auction format is the best selling method for many of our clients in the secondhand industry looking to help their organization scale. “Let the market set the price with an auction model.”
Each day, Upright Labs facilitates thousands of e-commerce product sales for thousands of stores in the secondhand reseller space. We help grow their businesses through intuitive, data-driven software and hands-on, detail-oriented services. Click here to review one data insight report to showcase how you may be performing against others in the industry. Interested to see how we can drive more value to your bottom line? Schedule a time to connect here.