A loss leader is a special offered at or below the seller’s cost and widely promoted to attract customers into the store. The concept is often used in retail to get customers into the store, and as a consequence of being in the store, the customers purchase other items that bring a profit to the seller. There is a method to the madness – sellers have a strategy in mind when offering milk for a penny, or a free loaf of bread with a $10 purchase. This concept can be used on eBay to draw customers into your store.
Sellers offering 1-cent listings are using the loss leader strategy. I am not talking about the unethical 1-cent listings that have $18shipping for a 3 ounce item. I am referring to legitimate 1-cent auctions that sellers use to attract customers into their store. Grocery stores frequently use the loss leader concept. They lure customers into the store with 1-cent items knowing that the customers will purchase other items that are highly profitable.
You might be thinking that this technique is too risky for your at-home eBay business. Offering a 1-cent listing is a risk. You may lose money on the 1-cent listing item, however, you may make money on other sales. Potential customers may bookmark your store and return later. Many sellers use this strategy on items that aren’t selling, or that they can purchase locally on sale.Consider using the loss leader, or 1-cent listing as your advertising costs. 1-cent listings drive bidders to your store. Penny listings make the bidding exciting and many times, the final price of the item is higher than your original buy it now price. Many sellers on eBay are afraid to run 1-cent listings, so I have an advantage over the competition. If the item actually sells for a penny, at least you will have purged it from your inventory and will receive another positive feedback point.
Learn more about eBay selling by visiting eBay Selling Coach, and the eBay Coach’s free seller discussion forum.
