Promoted Listings math

[bashort]

So I decided to do some calculations on doing a promoted listing.

I looked at a unpromoted item that sells for $100, has a buyer paid actual shipping cost of $20.00 and a 7% sales tax, that sale nets $84.26 total fees 15.74%

If I were to promote the item at the ebay suggested promotion rate of 10%, that sale would net $58.52 or 30% less.

If I were to raise the price of the item to net the same amount I would need to raise the price from $100 to 

 $139.00 or 39% more. total ebay fees 27.21%

So in my example promoting the $100 item at 10% or not promoting and lowering the price from $100 to $70 would net the same amount.

I would think that the 30% markdown would be much more effective than the promotion.

It is possible that I have made a mistake in the math but that is what I come up with. Someone please correct me if I am wrong

[stainlessenginecovers]

Promote at 2% (minimum) and ignore the 'suggestion'. This allows you to be on other peoples listings as well as your own listings for like type items. 

Then, put things on sale. 

[my-cottage-books-and-antiques]

I didn't check your math. Yes, it's possible that flat out lowering the price, or running a sale, would net you roughly the same as using PLS with the item at full price. 

However, which one will sell quicker, the one at a reduced price (which provides the buyer with an incentive to buy, but might not be seen by many potential buyers) or the full price item with extra visibility, which is (in theory, at least) more likely to be seen and if the price is reasonable, to be bought?

The problem is, there's no way to know the answer to that question for every item. 

And, as always on ebay, a lot depends on what you sell and what your buyer pool is like.

I would say go ahead and try both ways and see which one works best for you.

[bashort]

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@stainlessenginecovers wrote:

Promote at 2% (minimum) and ignore the 'suggestion'. This allows you to be on other peoples listings as well as your own listings for like type items. 

Then, put things on sale. 

---

So I did the same example at 2% add rate, the net drops from  $84.26 to $79.11 or 6.2% less.

 dropping the item from $100 to $94 nets out the same as a 2% promotion.

So the question is which is more effective lowering the price or promoting?

It appears to me that at least in this example every 1% in promoting is equal to a 3% price reduction in net results.

[onlinecentral]

I will search for an item by best match. Then make a list of words I want to exclude from those search results.

I load the words to exclude into the Advanced Search screen and sort by Lowest Price First.

The sellers who are not promoting and thus have lower prices get more of my attention.

[bashort]

So for  a test  I just took a item that I normally sell for $125.00 made another very slightly different  listing and used the ebay recommended ad rate of 10%, I also raised the price from $125.00 to $172.35 so it will net the same, 

[bashort]

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@onlinecentral wrote:

I will search for an item by best match. Then make a list of words I want to exclude from those search results.

I load the words to exclude into the Advanced Search screen and sort by Lowest Price First.

The sellers who are not promoting and thus have lower prices get more of my attention.

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That is exactly how I do it, but the excluded word does not appear to work well with more than one excluded word.

I really think that there are lots of sellers who do not understand the real cost of promoted listings and that is by design

[dbfolks166mt]

I didn't check your math. Yes, it's possible that flat out lowering the price, or running a sale, would net you roughly the same as using PLS with the item at full price. 

However, which one will sell quicker, the one at a reduced price (which provides the buyer with an incentive to buy, but might not be seen by many potential buyers) or the full price item with extra visibility, which is (in theory, at least) more likely to be seen and if the price is reasonable, to be bought?

The problem is, there's no way to know the answer to that question for every item. 

And, as always on ebay, a lot depends on what you sell and what your buyer pool is like.

I would say go ahead and try both ways and see which one works best for you.

A lot of this depends on how savvy the buyer(s) is/are and whether they are just looking at eBay or they are scouring the internet for the best price. While I don't promote listings I do adjust my prices on multiple platforms based on the expenses on those platforms. Since I can list items cheaper on most other forums it may explain why my sales on eBay have been declining for several years while my sales on other platforms continue to increase. 

[my-cottage-books-and-antiques]

@onlinecentral

@bashort 

   It's been a while, and I don't have a link for this, but some years ago ebay disclosed the percentage of buyers who use Best Match (rather than highest-lowest, lowest-highest etc) As I recall, it was somewhere north of 90%. With inflation being a concern, that might have dropped a bit, with more people using lowest to highest, but I suspect the huge majority of searches are still conducted via Best Match---and I think that is typical of most sites: people tend to use whatever the default is. Many people don't even know there are options.

So, when you ask "which is more effective lowering the price or promoting?" it might first be best to decide what you mean by effective? 

Also, we are talking here about PLS, right? Not PLA?  ebay disclosed at ebay Open that most sales (I think they were talking about most PLS sales, not sales generally) are actually made from PLS listings on other pages, NOT the search results page. 

So, 

[dbfolks166mt]

So the question is which is more effective lowering the price or promoting?

     A lot of this depends on how savvy the buyer(s) is/are and whether they are just looking at eBay or they are scouring the internet for the best price. While I don't promote listings I do adjust my prices on multiple platforms based on the expenses on those platforms. Since I can list items cheaper on most other forums it may explain why my sales on eBay have been declining for several years while my sales on other platforms continue to increase. 

     So at least for me the lower price and diversification appear to be more effective but individual rates may vary depending on what you are selling. 

[onefootflipper]

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@bashort wrote:

So I decided to do some calculations on doing a promoted listing.

I looked at a unpromoted item that sells for $100, has a buyer paid actual shipping cost of $20.00 and a 7% sales tax, that sale nets $84.26 total fees 15.74%

If I were to promote the item at the ebay suggested promotion rate of 10%, that sale would net $58.52 or 30% less.

If I were to raise the price of the item to net the same amount I would need to raise the price from $100 to 

 $139.00 or 39% more. total ebay fees 27.21%

So in my example promoting the $100 item at 10% or not promoting and lowering the price from $100 to $70 would net the same amount.

I would think that the 30% markdown would be much more effective than the promotion.

It is possible that I have made a mistake in the math but that is what I come up with. Someone please correct me if I am wrong

---

Your math is wrong, and I spotted at least one basic problem in your business practices.  You have to charge enough for shipping to cover the ebay fees on shipping. You also chose an extremely high shipping price in order to exaggerate the issue. I sell a wide variety of items and I can go a month without printing a $20 label. 

The US Ebay Fee Calculator Website which is constantly updated says your item would net $70.30 if promoted at 10 percent and 83.14 if not promoted.  You would have to raise the price from 100 to 117 to net the $83.14 with promotions. 

https://www.ebayfeescalculator.com/usa-ebay-calculator/

[my-cottage-books-and-antiques]

@dbfolks166mt  Or, it's possible you are leaving money on the table, because you might be able to sell on those other platforms at the same price you use here. I don't know what you sell, but some items are very price sensitive, and some aren't. However, if you want to pass the savings on to your buyers, nothing wrong with that.

[bashort]

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@onefootflipper wrote:

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@bashort wrote:

So I decided to do some calculations on doing a promoted listing.

I looked at a unpromoted item that sells for $100, has a buyer paid actual shipping cost of $20.00 and a 7% sales tax, that sale nets $84.26 total fees 15.74%

If I were to promote the item at the ebay suggested promotion rate of 10%, that sale would net $58.52 or 30% less.

If I were to raise the price of the item to net the same amount I would need to raise the price from $100 to 

 $139.00 or 39% more. total ebay fees 27.21%

So in my example promoting the $100 item at 10% or not promoting and lowering the price from $100 to $70 would net the same amount.

I would think that the 30% markdown would be much more effective than the promotion.

It is possible that I have made a mistake in the math but that is what I come up with. Someone please correct me if I am wrong

---

Your math is wrong, and I spotted at least one basic problem in your business practices.  You have to charge enough for shipping to cover the ebay fees on shipping. You also chose an extremely high shipping price in order to exaggerate the issue. I sell a wide variety of items and I can go a month without printing a $20 label. 

The US Ebay Fee Calculator Website which is constantly updated says your item would net $70.30 if promoted at 10 percent and 83.14 if not promoted.  You would have to raise the price from 100 to 117 to net the $83.14 with promotions. 

https://www.ebayfeescalculator.com/usa-ebay-calculator/

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[bashort]

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@onefootflipper wrote:

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@bashort wrote:

So I decided to do some calculations on doing a promoted listing.

I looked at a unpromoted item that sells for $100, has a buyer paid actual shipping cost of $20.00 and a 7% sales tax, that sale nets $84.26 total fees 15.74%

If I were to promote the item at the ebay suggested promotion rate of 10%, that sale would net $58.52 or 30% less.

If I were to raise the price of the item to net the same amount I would need to raise the price from $100 to 

 $139.00 or 39% more. total ebay fees 27.21%

So in my example promoting the $100 item at 10% or not promoting and lowering the price from $100 to $70 would net the same amount.

I would think that the 30% markdown would be much more effective than the promotion.

It is possible that I have made a mistake in the math but that is what I come up with. Someone please correct me if I am wrong

---

Your math is wrong, and I spotted at least one basic problem in your business practices.  You have to charge enough for shipping to cover the ebay fees on shipping. You also chose an extremely high shipping price in order to exaggerate the issue. I sell a wide variety of items and I can go a month without printing a $20 label. 

The US Ebay Fee Calculator Website which is constantly updated says your item would net $70.30 if promoted at 10 percent and 83.14 if not promoted.  You would have to raise the price from 100 to 117 to net the $83.14 with promotions. 

https://www.ebayfeescalculator.com/usa-ebay-calculator/

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Thanks for that, I found my mistake, had a spreadsheet set up and it was adding promoted fees 2X, 

[stainlessenginecovers]

An item with 80% off could still be on page 487. So, nobody could see it. 

Promotions work (for competitive items) because you bid against others to get to the front of the line. Not any different than Pay Per Click that has been on Bing & Google for over a decade. 

A 2% promotion means I am paying 14% (11.9% rounded to 12% FVF (with store) plus the 2% (plus .30c) with average taxes paid 

Paying 14% for a $100 item means I get $86

Paying 12% for a $100 item that does NOT sell means I get $0.