Devoted to online marketing, viral marketing, and web marketing

Sometimes I find that even some decent marketers that give some good advice come up with some bad ideas. Here’s a terrible one when it comes to how to find pricing points for your products. a

If you’ve been encouraged to use it, I highly recommend that you don’t.a

What has been encouraged has been to put your product on Ebay on three different auctions and then see what it is that people will bid on them. Then in response to what is bid, add up the totals together, and divide by 3 to get the price that you should charge for your product. a

The reason why this is just plain silly and unworkable is that you can never make a decision based upon three sales of your product. a

Next, this has absolutely nothing to do with testing prices, all you are testing is auction bids. And the one thing to remember about auction bids is that those making them are only looking for bargains, and offering prices below what they think they are really worth. To add to the problem, on Ebay the value of information and electronic products is looked upon as very low in value.

Then really look lastly on what is really happening: This has nothing to do with testing a price but on accumulating an average. Neither have anything to do with the other. They are two different concepts that exist for different purposes. 

So if you come across this as advice given by someone online, don’t fall into that trap. The real reason it is offered is because someone out there is trying to find a shortcut and circumvent the process that must be taken to get the pricing information that you really need. 

Should you ever use Ebay for this purpose? No. But, the one time it can be useful is when you just don’t have any idea what to charge for your product and there is nothing comparable on the market to measure it with. 

But this is only to get you an idea of what someone may be prepared to pay for the product. The idea here is to get a general figure and then apply your real testing prices you send out based upon those general figures. It’s never to be used as a substitute. 

Happy Pricing!