Something that some could be missing here is the discount being targeted for the private offer vs being advertised to both competition and buyers when lowering your listing price. As we all know, the send offers option goes to buyers that are watching/interested in the listing and the private offer can be sent via messages when a specific buyer is interested.
In both cases, they go to interested buyers only and not advertised to the entire market.
If the listings offer option is off, you cannot send offers to watchers but you can send offers to interested buyers messaging you. If you have it on, you can choose to send offers with the option to counteroffer or not.
Sometimes you just have limitations on your overall inventory, but you wouldn't mind a few extra sales at a slightly different profit margin. Many sellers prefer that one-off private discount to interested buyers, rather than lowering the entire listing price and making that price available to everyone. By lowering the listing and not sending an offer, the affect could be that competition lowers their listing prices also and drives the overall market down, tightening margins.
It may not be a big deal if you have a small inventory, but if you have a large qty of something, if you send a discount, for example, of $5 to 10 buyers, and 4 accept. You have 4 extra sales, making $20 less, but limiting the maximum difference to making $50 less if 10 were to accept (simply an example, not meant to be large numbers).
Lowering the listing price may also get sales, but if there is no difference in sale frequency and then you lose an extra $5 per order without it increasing the frequency of sales, then it could in turn hurt you in the long run as you make less and you do not create cash flow any quicker.
If you drive the market down prematurely instead of naturally let the pricing come down, in the end you could be your own detriment. Selling 50 qty of something at $5 less would net a $250 difference. Maybe that new calculated margin percentage is too small for the risk that one took for their business. However, selling 40 qty at "X" amount and the other 10 qty for $50 less in total, in 1/2 time it would have taken to sell the other 10, could be a better trade off. Especially if the market price stays the same and you could go purchase more of that inventory knowing, at least for now, that the price is still the same.
At least in our experience being in saturated categories (but would assume it would apply whether saturated category or not), keeping your listing price the same and sending private offers to watchers / specific buyers can get you extra sales, while not hurting your overall margin factors you have calculated when purchasing your inventory. Nobody likes a race to the bottom in listing pricing between competition. So it's a better way to protect your initial strategy.... at least from our experience.
