Books, culture, fishing, and other games

September 25, 2003

ebay Virtual Goods Marketing 101

I know, I know, I'm not posting often, and I'm posting about selling virtual goods more than anything, of late. I can only plead guilty to accusations of obsession. I tend to write about my current obsession. The good news is my obsessions aren't terribly static.

That said, I've been playing the ebay marketing game. After the EVE isk market crash of mid September, I've been moving to decrease my holdings steadily. At first I listed a few more 2 mil blocks, playing with the Buy It Now (BIN) feature I can now use. My first attempts were pretty sad. The BIN price was too optimistic, and last minute auctioning closed those deals, at widely varied prices. The first went for $3 per mil, the second for $0.75. The average was a bit better than my expectations at the time but that second sale spooked me.

I decided to accellerate my sell down, so I listed 10 mil with a BIN of $15. I still listed the minimum bid at $1, though, which I now know to be a very bad idea. I got lucky and it sold at the BIN rate promptly.

It's a bad idea to start auctions so low when using BIN due to the fine print in the ebay rules. Any bid on an item aborts the BIN option. So, a minimum $1 bid on that lot would have set off the bidding process that might have resulted in a sale at a much lower price. What this means is that commodity items, such as lots of isk, work pretty well with BIN, but you need to bump the start price higher to avoid bad luck (and good luck for the savvy bidder). With unique items, on the other hand, such as accounts with developed characters, it might be better strategically to get the bidding war going.

That said, the bidding war on the second account I have listed now isn't much of a war. Often the bidding picks up in the last hour or so, so I still have hopes, but it sits at $32 after 9 bids with 9 hours left. That's actually more than I paid for the software, so that's something, but it's no where near what it should sell for based on past sales. I'm still hoping to break $100, and $150 is probably a reasonable expectation. Except the market is slumped.

Following that first 10 mil lot, I listed a second. I still hadn't figured out the twist with BIN, so it too was hung out there for a steal. But it got snapped up at the $17.50 BIN price. I was feeling for a price range where I could reasonable sell off the rest, and I decided it was probably $2 per mil, so I listed a few more 2 mil lots with varied BIN prices (and still $1 mninimum bids). I listed them with higher BINs to see if the low total cost might tempt impulse buyers.

One lot managed to trigger a bid war, which proved an oddity. From the initial bid of $1.50, it skipped up rapidly to $5, then another bidder drove it up to a $14.50 close. This is the auction psychology at work, as that price is way out of line for isk. $7.25 per million isk is around 4 times the average sale price at present. I'm not complaining about that.

But the two other 2 mil lots languish bidless. One I set at $7 BIN, which was optimistic. The other at $5 is reasonable for a no-nonsense impulse buy, but it hasn't found a home yet. I expect the former will see a last minute bid or three trying to steal it in the $1 to $1.50 range. Since it has no bids as yet, it might go for that. The latter has over a day still, so hard to call that one. (While I was writing this, the $5 lot went for the BIN price.)

From these I moved to 5 mil lots with BIN prices of $10. That was the sweet spot. The go within 12 hours pretty steadily. I suspect there's resistance over $10 to impulse buying, I'm testing that now with a BIN of $11. I've also switched to a minimum bid of $9.50 on these. That's about as close to a fixed price sale as I can get at the moment while still maybe triggering a bid war to bump the price up. ebay's cutoff for the minimum listing fee of $0.30 is $10, so I save a bit on fees by keeping the start price under that.

As a side effect of the 5 mil lots selling fast at $10 BIN pricing, I got an email from a buyer offering to buy up to 50 mil at that price. I haven't heard back, but I decided to try to work a deal on 45 mil. That would draw my balance down near zero, just in case the trend line remains negative. For the time being I will stick to accumulating 5 mil lots and selling those as I have them. If the trend line turns up, I might try a bit of trading.

From chatter over on Terra Nova, the slump is widespread in the MMPORPGs. This may be seasonal, back-to-school related. A lot of the SWG accounts for sale say "gone back to college, don't have time to play anymore" or something similar on them. I'm hoping that will let me grab another account or two at steal prices, but so far they seem to bid up to retail or better. Even those with only starter characters tend to sell for $35 or so, which means only a small savings over the retail price of about $45 once shipping figures in, and there's always a small risk of a problem in the transaction or shipping, where there is little in stepping into the local game store. I've set myself a hard limit of $25, unless I'm getting significant benefit beyond the account itself (large cred balances, really good lewt, developed character I'm interested in, etc.). I'm watching three auctions now that close in a few days that might close in my range, but so far I haven't seen any go that low.

Prices on the retail box seem to be holding pretty well. I watch Amazon and GoGamer.com weekly, but after the initial post-release drop to $45 or so, the price has held steady. This suggests the retail box is still moving steadily. In comparison, I picked up my second EVE box for around $25 a mere month or so after release.

I'd really like to get to 30 feedback on ebay, but getting feedback is about like getting tips for performing in the cantina on SWG. Some people, those who have a clue about the game, tip often and well. Many, far too many, seem to never tip entertainers. Since entertainers are the only class that can heal battle fatigue, this is silly. And many serious entertainers have few other options for earning credits. Working up to Master Dancer and Master Musician will consume nearly all of the available skill points, leaving very few to work up basic combat or artisan skills.

The serious ebay player, analogously, are quick to leave feedback. They know it helps others gain more ebay options. I leave feedback immediately upon the close of a transaction (and receipt of delivery, if I'm buying) if all went smoothly. If there was a blip of some sort that makes me wonder, I tend to hold off a few days. As seller, I leave feedback as soon as I receive payment, if it is prompt.

I'm sitting at 14, and am begging one repeat buyer I'm emailing back and forth on the larger sale to leave feedback. He's bought two lots. He's happy and asking me to sell more. But no feedback as yet. The 30 magic number is for fixed price multiple listings. That would have let me list 10 lots of 5 million isk at $10 each (if I chose), and is just easier than tracking a lot of individual listings once I know where I want to price.

Considering it takes about 30 seconds, and is a very simple procedure, it's sad that more buyers don't bother. I could use IDVerify for a $5 fee, but that's until something changes in your account info (address, etc.) and I'd rather be free of that limit, so I'm pressing for that 30 feedback magic number.

But it's possible that ebay isn't the optimal market in the long run anyway. PayPal listings have possibilities, and Google is now launching a new marketplace too.

The one thing one can't do in this area is fix on a set course. Navigating online is like islandhopping in a very crowded sea. And the sandbars move with the tides too.

Posted by dan at September 25, 2003 02:49 PM | TrackBack
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