Thursday, August 09, 2007

The Crazy eBay Price Reversal Axiom - Compliments of the Kellogg School of Management

There’s some new research in that confirms what a lot of eBay sellers have already learned through price experimentation…

With popular items, if you start prices low, you gain more bidders and stand a better chance of selling your item at a higher final gavel price. With not so popular items, it’s better to establish a higher price, since you may not get many interested shoppers

This is from Northwestern University’s Kellogg School of Management. The Minneapolis Star Tribune recently ran an article on the subject – The psychology of selling on eBay. The original paper, "Starting Low But Ending High: A Reversal of the Anchoring Effect in Auctions," was co-authored by Adam Galinsky, associate professor of management and organization at Kellogg.

What other special cases do you notice? How do you approach pricing unique items on eBay? Please share your insights and comments below. We’d love to learn from your experience.. mistakes.. discoveries. Thanks.

Read "The 7 Essential Steps to Successful eBay Marketing"(McGraw-Hill) to learn more about eBay selling psychology.

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