How to Set Pricing for Liquidation Auction of Wholesale Stock
Auction is a great way to sell wholesale stock. A lot of people are looking to buy leftover stocks or liquidation stock at affordable rates and auctions are a go-to place for them. There are mainly two reasons why you should arrange an auction for your stock.
First, auctioning is a great way to sell fresh stock if you’re not sure what the fixed price should be. This is because you can let the market dictate the price, rather than setting a price yourself and potentially not getting what the item is worth.
Secondly, you can find buyers for used items aka your liquidation stock or leftovers from previous orders. These items would be otherwise wasted, so why not earn some quick money from them instead?
One of the best ways to get rid of your inventory is through a liquidation auction but a lot of sellers seem to get confused about the pricing of the auction. This article will look at the different ways in which you can set the pricing for your wholesale stock.
Things to Know Before Liquidation Auction Online
Before listing your stock for auction, it is important to be aware of the key terms that will be used in the process.
Starting Price: The starting price is the lowest price at which the auction begins AKA the first bid.
Reserve Price: The reserve price is the minimum price that the seller is willing to sell the item for. If the item does not sell for the reserved price, it will be relisted.
Buy it now Price: The buy it now price is the price at which the item can be purchased immediately.
Increment Price: The increment price is the minimum amount by which the bid can be increased.
Proxy Bidding: In proxy bidding spots, the winner pays the second-highest bid plus a small increment on top of that to claim the stock.
Item condition (if used): The condition of the item, if it is used, will be stated in the listing.
Calculate Price for Auction
The process differs for a brand new stock and used items stock. For used items, you have to take in several factors such as condition, age, current value etc while for brand-new stock, your pricing depends on whether you are looking to make huge profits or just sell it at a breakeven price.
Auction Price for Leftover/New Wholesale Stock
If you have a leftover product and you just want to get rid of it, you have the choice of selling it at exactly the manufactured price or making a minor profit. The price you choose will depend on your circumstances and how much you need or want to make from the sale. If you’re not in a hurry to sell the product and you’re not worried about making a profit, selling at the manufactured price is probably the best option to clear the leftover stock because it was already worthless to you. However, if you are looking to make profits, selling at a slightly higher price may be the way to go.
This is a common pricing strategy used by businesses to make sure they are maximizing their profits on leftover inventory. By multiplying the item price with the stock quantity and then increasing the overall price by 5-10%, businesses can ensure that they are making some money from the leftover stock too. This pricing strategy is often used by businesses when they are trying to clear out old inventory to make room for new products.
If you want to make a decent profit from your leftover or brand new stock, you need to set the reserved price and buy it now at 40-70% more than your manufacturing cost. By doing this, you are ensuring that you will make a good profit even if the stock does not sell immediately.
Liquidation Auction Price for Used Stock
When it comes to estimating the price of used items, there is no specific formula to follow. However, there are a few factors you can take into consideration to help you come up with a fair price such as the number of years or months, how old the model is, what is the price of newer models, and if the products are still a good value compared to newer models, etc.
Check the Condition and Demand of the Product
Demand for the product is also a factor to consider. If there are a lot of people looking for the same item, you can charge more. To figure out the demand, search online for the same product and see how many people are buying it. Finally, take into account the condition of the item. By taking all of these factors into consideration, you should be able to come up with a fair price for your used item.
Compare with New Models
Doing some online research to see the price of a new product right now can help you set a more accurate auction price for the used stock. By understanding how much the new product costs, you can better gauge how much your used product is worth. This research can also help you determine if there is a high demand for the new product, which could mean that your used product is in high demand as well if it serves a similar value as the new model.
Competitor Research
It is also important to research at what price people are selling that item or related items. This will give you a better idea of what the market value for the item is, and help you to set a more accurate starting price. If you set the price too high, you may not get any bids; if you set it too low, you may not maximize your profits.
If you’re selling an older item, you may want to set a lower reserve price or start bidding, to attract buyers. You may also want to set a lower “buy it now” price if you’re offering that option. By pricing your item competitively, you’re more likely to make a sale.
Where to Arrange Liquidation Auctions
There are a lot of online platforms where liquidation auctions are being organized. While some websites have one specific day where all the auctions are listed and bid live while others let you randomly organize them and receive bids for several days or even weeks before selling them. John Pye Auctions, JiffyStock, and eBay are some prominent auction sites that auction single or wholesale products.