INFLATION. Does a Seller lower their prices or raise their prices during inflation times?

[bryo_3145]

What are sellers doing in order to combat inflation?  Are they lowering their prices on what they are selling if they can? Or are they raising their prices to combat rising prices on other goods and services? Or are they closing their doors? 

[katzrul15]

Raised.  Due to rising shipping and supply costs, fee increases, inventory costs.

No choice.  Otherwise, they would be ours as a Seller to bear.  

Have to pass them onto the Buyer. 

Kroger is not selling me meat at cost or paper towels or cat fud.  It is priced to make a profit. 

[southern*sweet*tea]

If you're a business and want to STAY in business you raise them accordingly, because your own prices are rising. Someone has to cover the cost.

Way back when the minimum wage was raised from $3.35 to $3.80, then a year or so later to $4.25, I was a restaurant manager. Once we closed the doors the night before the wage increase, guess what we did?  Raised all of the prices across the board.

Price increases have to be taken care of, they have to be covered by someone, and for most businesses that someone is the end user or buyer.

[alcoforever]

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@bryo_3145 wrote:

What are sellers doing in order to combat inflation? 

A.  Are they lowering their prices on what they are selling if they can?

B.  Or are they raising their prices to combat rising prices on other goods and services?

C.  Or are they closing their doors? 

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Most are choosing option B.

Some are choosing option C.

Nobody is choosing option A.

[714ricki]

At minimum, you will need to account for the increasing shipping and handling prices as shipping charges and shipping supplies continue to escalate. 

I would also account for potential increased ebay platform fees.

Expect your sourced items to cost you more & other operational costs to increase.

Adjust your prices accordingly so that you make a profit. 

Good luck!

[annadryl]

Mostly raised, what choice is there? Some less expensive items get raised every time the postage goes up, which is extreme these days. I have however actually lowered prices on some items that are kind of "duds" anyway cuz it gets feet in the door and something might catch their eye. I also promote most items at the minimum 1% because about half of my sales are PL so it works. Best of luck and hang in there~

[2013grotz]

Random observation: While it'd be sensible to raise prices in the face of raised costs, I've noticed over the years every time there's a postal rate increase or fee increase that prices either stay the same or go down here on ebay.  It's funny, but again when I see an item that's marked $1+free shipping when I know it costs $5.65 to ship (I got one like it I'm trying to sell!), I have to say there's a lot of insensibility out there.

[lepke1979]

A bit of A and B I guess. Nearly 99% of what I sell is set to USPS calculated shipping. So that has gone up accordingly.

But I'm still sticking with how I price stuff where if I still have it after a month. I'll decrease the price little by little. Particularly after a sale. Some stuff I might go back to later and relist or maybe raise the price though.

So new stuff will be priced in today's prices. While older stuff will slowly get cheaper.

[reallynicestamps]

Ignored.

You know what your procurement costs were. You have  a good grasp on what your fees will be.

The cost of shipping might be higher, but if you are using Calculated Shipping that will be self-correcting.

Now add in what you want your profit to be and set your asking price.

A few caveats and details:

• If you are using Flat Rate and/or Free shipping, you might want to build in a little pad against upcoming rises in mailing costs, including packaging.
• If you use Best Offer, set your parameters to automatically accept your real price and your asking price a bit higher, because buyers like to get a discount. Even an imaginary one.

It may be fortunate that eBay buyers (and sellers) skew older. We remember the real inflation of the late 70s and early 80s when my floating mortgage hit 21% interest one month. The world economy isn't at that kind of craziness.

[coolections]

Use calculated shipping and no need to raise the price. The buyer pays the shipping so the extra cost is automatic..

[katzrul15]

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@coolections wrote:

Use calculated shipping and no need to raise the price. The buyer pays the shipping so the extra cost is automatic..

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Except it is not.  Shipping supplies, especially boxes used for media or 1st class parcel, bubble mailers, bubble wrap, tape, paper, toner, labels.....all up substantially.  If you off free shipping, you have to adjust pricing.  Inventory costs are up, freight costs are up, gas is up to resource or drive to PO, utility costs are up, wifi is up.

If you do not raise your prices, you are losing money. 

[dnasilver]

It all depends on what your reason for selling on eBay is. It depends on your ROI. If your ROI is 100% then you can absorb the increases or even lower your prices to stifle competition. If you cannot absorb the cost then you need to raise your prices. Some will close their doors, but that happens with or without inflation. It goes back to why are you selling and what is your return on items sold. Only you know those answers.

[coolections]

@katzrul15 

It depends on your profit margin. If you must raise your prices 10% to stay in business you are probably not suited for Ebay in the first place. Plan to make double what you paid for your items or do not purchase them for resale. The majority of the rising cost is in the shipping so make the buyer pay that. No need to purchase boxes and most bubble wrap you can also get for free if you know where to look. Plan your trips to the PO on your way to do other chores to save in gas. There are ways to lower the inflation costs when it comes to selling. Some won't survive but many will. 

[dnasilver]

So true:

"We remember the real inflation of the late 70s and early 80s when my floating mortgage hit 21% interest one month. The world economy isn't at that kind of craziness."

Let alone gas rationing. Can you imagine the panic that would cause today? 

[katzrul15]

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@coolections wrote:

@katzrul15 

It depends on your profit margin. If you must raise your prices 10% to stay in business you are probably not suited for Ebay in the first place. Plan to make double what you paid for your items or do not purchase them for resale. The majority of the rising cost is in the shipping so make the buyer pay that. No need to purchase boxes and most bubble wrap you can also get for free if you know where to look. Plan your trips to the PO on your way to do other chores to save in gas. There are ways to lower the inflation costs when it comes to selling. Some won't survive but many will. 

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Not true, depends on "what you sell".  On the one ID, we sell 10-20 vinyl LPs/week.  The cost of the cardboard mailers is up 28% over just 5 months ago.  I can't just go rummage those boxes from a dumpster to ship a $45 LP that is going out today.  That my cost basis is $4 in, btw.

I absolutely understand ROI and profit margins and selecting my inventory well.  But I do not recycle bubble wrap as a rule, I pack very well and we sell higher value items that require professional presentation in shipment and delivery. 

Just doubling based on cost is not a module we use - we typically are over 75% net profit, unless it is a close out item.   Our net profit includes a tax burden rate.  

There is no 1-size fits all to the OP's question.  We raised prices in January for the first time in over a year.  We raised them again slightly (took handling fees up .85 per listing) 4/1.  We do recycle boxes where appropriate, but over 63% of our orders are 1st class parcel or media mail that require a box. 

Today I have 4 Lego sets shipping that are all under 10oz, but the sets sold for $75+.  They need to go in a nice, new box, bubbled and secure.  These are retired, vintage sets that someone paid a premium for, as they are adult collector(s). 

Could we eat a little more on the sale of an $8 set that sold for $75 + shipping?  Absolutely.  Did we?  No.  We raised our pricing slightly and shipping slightly to further offset the cost increases we see daily. 

Still willing to await my price on the site.  Not every seller can do that and I fully appreciate those constraints.  Lowering prices to keep sales occurring is not something we are willing to do at this juncture, or honestly, in the past.