Maximize your profits

I frequently look at other sellers and what they have sold.  Of particular interest is how much they sell their items for.  In this business there is a saying, fast nickle or slow dime.  Fast nickle means you price to move where slow dime means you are willing to wait for the higher margin even if it takes some time.  So which one are you, and are you doing the right thing?

A post by another member in one of my groups is what got me on this track.  When I first started ebay, I was fast nickle guy.  Get it, sell it.  Make what I could and move on.  What I soon figured out was that it took just as much time to list the fast money, low profit items as it did the slow moving, high profit items.  So my logic kicked in and I figured out that it was better to list the slow dimes and make as much profit as I could.  Now I do still sell some fast nickles, but by and large mine are mostly slow dimes.  Of course following this model does have drawbacks.

In order to make a decent business with the slow dime method requires storage space.  You are going to accumulate a lot of items and they are going to sit waiting for the right buyer.  The more you have, the more frequent your sales are gonna be.  This is one of the considerations you have to take into account when deciding how you are going to run your business.  Are you a Walmart seller, or are you a Nordstrom seller?

The down side to the fast nickle is that once you gain a following, it will be hard to make the transition to a slow dime seller.  You will slowly lose your following and have to build new followers.  This can take a toll on sales as you make the transition.  For me, the slow dime approach is the best fit.  I want high profit margins.  I want to be able to enjoy life and not have to work constantly to feed the fast nickle inventory system.

The other down side to fast nickle is you wind up devaluing brands.  Each time something sells under market value, the next one will have to come down in order to compete.  People see something valued at $50 selling for $19.99 and they start seeking out other $19.99 ones.  The closest one they can get to that price is the one they are going to buy.  Sellers panic and start lowering prices to get sales.  Next thing you know, no one is making a decent margin.  Think I'm making this up?  One perfect example is Polo Ralph Lauren shirts.  They used to be a decent margin shirt.  Now you are lucky to get $19.99 for one.  They have to be special labels to get anything above that.

Don't make the mistake of working yourself out of business.  Fast nickle on ebay will only work for so long.  Sooner or later those fast nickel items we be devalued so much that you can't make enough to justify selling them.  Be smart and make sure you are getting the margins you should.  Don't leave money on the table.