Pricing Concepts

Pricing plays an important role when involved in a transaction of a product or good. The buyer has to acquire the ability whether to buy an item based on the quality or need, and the seller has to rely on whether if the price for an item is an acceptable fee, or if the item is something in demand and, have the ability to make a profit from the price.

Buyers and sellers on Ebay have the advantage whether to pay or sell an item in the price range to their liking and also Ebay can become very competitive about the price subject amongst other brick and motor facilities selling the same or similar good. For instance, you have a buyer looking for a brand new Accutron by Bulova watch where he had seen it at a local jeweler spot in the neighborhood. The price that the jeweler is talking about is not what the buyer is willing to spend. So he goes price hunting online, and stumbles across the same watch at a much lower cost, nearly 80% percent cheaper than the jewelry store. The thing is that the watch on Ebay are sold by multiple sellers, one where the watch is selling for a Buy It Now price for $159.99, and another seller has a Bid going for the current price of $89.99. That sounds great, but the problem is that the bid ends in 4 days and the current price is not guaranteed until the bid ends. There are 13 bidders already bidding for the watch. So the buyer decides to wait for the bidding to end in 4 days instead of buying the one priced for $159.99. By the time the bid ends, the watch that was $89.99 about 4 days ago is now $209.55, and the watch that was selling for a guaranteed price of 159.99, has been sold. So the seller winds up not winning the watch and missed out the oppurtunity of buying the Buy It Now priced watch. The best bet for the seller is to wait and find the same item or buy a similar item or go back to the jeweler and buy the watch.

One could only wonder how much of a profit both sellers on Ebay had the ability to have a high-end good sold for substantially for pennies on the dollar, and was able to make a profit from it. How could they have the advantage to have purchased it cheaper to resale it again? First off, they have an advantage over their store front competitors for not having to pay rent to sell their products possibly. When it comes down to the fact that a product has to bring in profit for a business, the seller has to incorporate a fee for rent, especially store that has to pay rent for a building. That's why most of the time, it is best to shop online for a discount on the same item you just seen on the streets. Secondly, the e-seller may have received this item as resell, meaning that someone could have pawned the item and never had a chance to buy the pawned item back. Or the e-seller could have bought at a time for retail price and decided that he no longer wants to own it and tries to resale it that way. Whatever the case may be, the e-seller has n advantage to sell the watch for whatever price he wants.

All buyers should fully educate themselves before paying retail for any luxury good, or any good for this matter.