It’s an easy mistake to think that buyers determine the price your auctioned good will get. My experience tells me otherwise.
In a highly competitive eBay niche, such as consumer electronics, you generally can’t affect prices very much. But where ever there is reduced supply, you can receive what economists call monopolist profit: That is, restricting supply can drive up the price and increase profit.
In my last example I used watches, so I’ll stick with it. I bought 100 watches from Hong Kong for around $2.50 a piece. As they were unique (nobody else was selling them) I guessed my margin would be anywhere from 300-1000%) I immediately put 10 up for sale at $1 reserve. After the week was up they ended up selling for between $10 and $15.
Which was ok, but I thought I could do better. The next week I put just one up, with all the bells and whistles, highlighted, featured etc. Guess what, it sold for $50. My first week selling 10 watches I made around $70 - when I only sold one I made $40.
The moral of the story, when you have a unique product you determine the price by fixing the output. Try it, it obviously doesn’t work all the time but when it does it can be very lucrative.
