Friday, September 15, 2006

On the topic of jewelry auctions on eBay

There has been much discussion about whether or not it is in the best interest of a jeweler trying to increase sales to post pieces in online auctions at eBay. We considered this and actually ran some auctions which you can see from our previous posts. We sold some of our jewelry in this way, but below our retail prices. The bump in hits on our website after the auctions did not increase much above the norm. We haven't posted any new auctions because we have been mulling over whether or not the fees and the discounts are worth this form of advertising and the perceptions that come with it.

Our thinking was that eBay auctions would advertise our jewelry by reaching millions. But were our pieces actually viewed by millions, even thousands or hundreds? There is no way of telling how many actually looked at our jewelry (it would be a cool feature of eBay if you could actually tally the number of hits on an auction item, but that is beside the point). We figured that even if our pieces did not sell, the advertising alone to the millions of jewelry seekers out there would be worth it.

In the end, the cost to auction our jewelry on eBay may not be the best marketing move for us based on the associated costs, along with the fact of selling below true retail value of the piece. In order to expose an auction to the most eBay visitors possible, it must be listed in multiple categories, with a multitude of attributes added to make it stand out, and decisions made about how long the auction will run, all of which raise the price of hosting it. By the time you finish preparing an auction, it is painfully clear the price paid for that exposure, set against how much can be lost on the true retail price of a piece of jewelry. Is it really worth it?

Of course it is up to the individual jeweler or business to weigh such costs against potential gains. It is a fact that some jewelry on eBay can be sold without all the overhead costs associated with a brick and mortar store, so it can be less expensive. That fact doesn't have to diminish the quality of jewelry offered (certainly anyone would have to research to confirm quality). It is also a fact that high quality jewelry is indeed sold on eBay. But, it is also a fact that sometimes sellers of fine jewelry will mark a quality piece down below wholesale cost. Someone will buy it, and then expect to find deals like that again and the perception is born that bargains abound...and somehow, too, the idea that eBay is a dumping ground for jewelry that dealers can’t sell. More likely to the point is that high-volume sellers, like car dealers, at times have to move out inventory to bring in the new, and the old stuff ends up on eBay.

Our conclusion, after reading and talking to marketing experts, is that if we want to sell our jewelry for what it is truly worth that we cannot do it on eBay. It isn't just because we had to mark things down in the first place as a cost of advertising, but more because of the perception that eBay is where jewelry goes that can't be sold elsewhere. We know this is merely perception mixed with some grains of truth, but for us the bottom line is we know that isn't true about our jewelry. We don’t want to sell our jewelry for less.