Auction vs. Fixed-Price: How to Choose an eBay Listing Format
When eBay started back in 1996, the only format available was auctions. The site has evolved over time, and today auctions are not the best way to sell items on eBay. As time goes on, eBay is moving more towards a retail type format, competing heavily with Amazon for business. eBay is mostly a "buy it now" site, pushes free shipping, and has added the eBay Money Back Guarantee to compete with Amazon's liberal return policy.
Disadvantages of Auctions
Auctions are dead on eBay. Unless you are selling a truly rare or highly collectible item, or something limited in number like event tickets, auctions don't work like they used to. One reason is the sense of urgency of buyers. They don't want to wait 7 days for an auction to end. Buyers may need the item right away and if they can't get it on eBay quickly, they will go to Amazon and purchase it with the Prime membership and 2-day guaranteed delivery. Some other reasons auctions are not a good idea on eBay:
Lack of indexing on Google is another disadvantage of auctions. For sellers who run their eBay store like a brick and mortar, having all their inventory for sale all the time, indexing on Google is a good thing. But, auctions aren't live long enough for indexing on Google to happen. Auctions run in durations of 3, 5, 7, or 10 days. It usually takes 30 days for something to start showing up on Google.
Limited visibility. The right person might not see the item within the 3-, 5-,7-, or 10-day auction timeframe. If a buyer who would bid on an item isn't online because of travel or some other reason, they can't bid on the item. Auctions don't reach a large number of people like a fixed price listing would over a period of time.
Think about it this way: A retailer doesn't put an item on the shelf for only 7 days. It is usually there for months at a time. The odds of an item selling are greatly increased when the duration of the listing is longer.
Lack of automation. Auctions have to be managed. If an item is unsold, the seller has to decide what to do with it. Leave it in unsold item folder, re-list it, or discard it. While there are some automation preferences for managing auctions, they are generally a time suck to manage.
Slow Payment. Auction buyers can take their time to pay, up to 4 days. This is aggravating but a part of the system. And if buyers bid on multiple items from the same seller and want a combined invoice, the seller must wait until all auctions are over to send the invoice to the buyer for final payment.
Advantages of Fixed Price Listings
Fixed price listings are the same as an in-stock retail item that can be purchased immediately, shipped quickly, and there is not price haggling. This option is attractive to buyers because of the speed of delivery, and attractive to sellers for these reasons:
More automation. Fixed price listings are like inventory at a regular retail store. Everything is for sale at any time.
When a seller has an eBay store, they can use a feature called Good Til Canceled, GTC. With GTC, items renew automatically every 30 days. This makes managing a store more automated. Listings can be tweaked with the Bulk Editor so making global changes to listings is easy and fast.
Best Offer Feature. With fixed price listings, sellers can enable the Best Offer Feature so shoppers can submit offers for the seller's consideration. The seller has full control to accept, decline, or counter the offer. Best Offer empowers buyers to start a conversation with the seller and negotiate.
Markdown Manager. This feature gives sellers the ability to run sales. Sellers can mark down items in a category or with a keyword by a certain percentage. Markdown Manager can accommodate 200 listings at a time.
Immediate Payment. Non-Paying bidders are the biggest hassle with auctions.
Fixed Price and GTC can include the immediate payment feature. A buyer can click on the Buy It Now button, but the item will stay available for someone else to purchase until it is paid for. If the item sells on Best Offer, the immediate payment option goes away.
Updated by Suzanne A. Wells on August 31, 2017.