Auction vs. Fixed-Price: How to Choose an eBay Listing Format

Learn Which Selling Format Is Best for Your eBay Listing

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If you're relatively new to selling on eBay or sell primarily as a hobby or sideline, the choice of listing formats may be confusing to you:

  • What are the advantages and disadvantages of different formats?
  • What format guarantees that I'll get the best price for my item?
  • Are different formats better for different kinds of items?

These are all sensible questions whose answers have changed over time as eBay's policies have changed, meaning that there's a lot of information and advice out there, much of which may be conflicting.

If you're just looking to keep it simple, here are some tips to help you to choose.

Each of eBay's listing formats have particular strengths and weaknesses that affect how they appeal to individual sellers.

Pros and Cons of eBay Auction Listings

Auction format listings have the following strengths and weaknesses. Auctions create the possibility of selling for much more than you would otherwise have asked for your item(s) and when started with very low starting bids (i.e., $1.00 as a classic example), most of the time auctions guarantee that the item will sell, whatever the price. Auctions also let the market (i.e., the community of bidders) set the price when you're unsure of an item's value. But when using auctions, it is also possible that you will end up selling well below an item's market value unless you set a reserve price, which is likely to reduce the number of bids you receive.

The variability of auctions makes it much more complicated and time- and research-intensive to plan or develop well-conceived business strategies when using them.

 Auctions are also much more time-sensitive; to maximize your sale prices with auctions, they must increasingly end when buyers are likely to be at their computers, which is often a complex calculation to make that depends on culture, geography, holidays, and seasonal habits.

Auctions are more easily subject to complex supply-and-demand interactions as the result of your own listings that can drive down profits and auction format listings provide no way to preemptively protect yourself against non-paying bidders.

Perhaps most importantly, there is a proportionally shrinking market of auction bidders on eBay and a growing market of fixed-price buyers and eBay's own strategy is shifting toward supporting and more heavily marketing and serving fixed-price listings and sellers.

Pros and Cons of Fixed-Price Listings

Fixed-price format listings have the following strengths and weaknesses. With a fixed price listing, you always know your revenue and profit margins on any item that sells. When using a fixed price listing, you will never be forced to sell at a price that damages your business or creates unexpected losses. At the same time, fixed price listings are much more likely to go unsold than auctions with low starting bids. Fixed-price listings also leave pricing up to you, which can mean more research work for you to stay on top of things and can present problems if you are unsure of an unusual or one-of-a-kind item's worth.

General Rules for Choosing Between Auctions and Fixed Price

When the public of auction buyers on eBay was the bulk of eBay's shopping audience, auction was almost always the way to go and, when done right, would almost always bring better prices than fixed-price listings.

These days, things have changed.

eBay has been far less supportive of auction formats as they have developed new features and policies. eBay's strategy has also shifted the balance of buyers and sellers, reducing the proportion of eyeballs on eBay that is available and willing to place bids. For this reason, results from auction selling on eBay are not at all today what they once were.

Use auction format listings only when:

  • There are very few instances or no other instances of the item you're selling on eBay, or...
  • The item you're selling is not a mass-produced item or has been customized or had significant and unusual value added to it and its market value is, therefore, unclear, or...
  • You are a Top-rated Seller or Power Seller with high feedback and high visibility, or...
  • You are selling damaged, salvage, heavily-used, or odd-lot goods whose value is likely to be in the eyes of the beholder or a very small group of interested buyers, or...
  • You are in a true must-sell situation and are willing to start your listings at a very low starting bid price, and to accept any final sale price so long as the item sells within a predefined amount of time.

For all other listings, use fixed-price formats for best results. This includes cases in which:

  • You are selling common kinds of mass-produced, commodity, or off-the-shelf goods or services, or...
  • You are a new seller, a low-volume seller, or a seller without either top-rated or power-seller status, or...
  • You cannot afford to sell at a loss or to sell well below an item's market value, or...
  • You see many similar goods to yours on eBay, or...
  • You are able to wait for a sale until a buyer is willing to pay your price.

Today's Changing eBay

Though there are many that prefer the "old" eBay, with what CEO John Donahoe called "flea market" characteristics, auction-based, community-driven, informal, used-goods-friendly, etc., most sellers that have clung doggedly to auction-format listings have either left eBay for other auction platforms or finally given up and either moved to fixed-price listings or left the business altogether.

Those that remain and are successful with auction format selling are, by and large, sellers of craft goods, estate items, thrift items, one-of-a-kinds, odd-lots, and unusual collectibles and memorabilia. Even among these, many increasingly feel that eBay auction format listings are not the way to maximize item value, but rather a tool for liquidation as bidding has gradually become a smaller and smaller proportion of eBay activity and a smaller and smaller part of eBay's overall business and website strategy.