Many eBay sellers find pricing their items is one of their biggest challenges. Pricing them too low costs you money, while pricing them too high means they don't sell, which costs you precious time and effort — not to mention eBay fees. In this article we discuss how to arrive at a sensible price for your item, and then how to select the best pricing strategy for it.

There are three steps to arriving at a selling price for your item

1. Do your homework. Find out how much similar items cost in stores and elsewhere on the Web. Search other eBay stores and listings to get a feel for the fair market value of what you are selling. Remember that you will be competing with other eBay sellers with similar products; if you price the exact same item higher than another seller, theirs may sell and yours may not. Some sellers will search completed listings and set their starting bids right below an item that just sold.

2. Be realistic. Obviously, collectible items and art fetch higher prices than common items. But scarcity doesn't always translate into demand. Just because an item is rare doesn't necessarily mean it will command more money — maybe it's rare just because no one has a need for it. Again, research your potential market and price accordingly.

3. Cover your costs. Remember, the cost of your item isn't just the price you paid for it. Take into account all your expenses related to procuring, fabricating, storing, and transporting your product. If you can't recoup your costs, it's time to find a new product to sell.

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