Many new ebay sellers often fall into the pricing trap. Either they price their items too high to be unsellable or they price it too low to make any profits.

Some basic information on ebay pricing. Ebay has three prices that can be set for an auction.

The "Buy It Now" Price

Allow bidders to buy the item at a fixed price immediately without waiting for the auction to end. Effectively, it also means the auction will end once it has a bidder. The only exception will be in dutch auctions.

The Starting Bid Price

Any auction will require a starting bid price. This is the price set by the auctioneer when he/she first lists the auction.

The Reserve Price

This is the pre-determined price set by the auctioneer. Bids will need to exceed or equal to the reserve price before it will be sold. If an auction ends with the reserve price not being met, the item will not be sold.

Both the "Buy It Now" and reserve price are optional on ebay.

It is important that your starting bid price be set low to attract bidders to your auction. My advise would be to set the starting bid as $0.99 or lower. As a rule of thumb, never set it higher than $50.

What do you do then if you can't sell an item below a certain price? The answer is to set a reserve price. That way, you do not have to worry about selling an item below your profit margin.

Also, it will not affect your feedback rating.

Another potential pricing issue on ebay is shipping. Most disagreements between buyers and sellers occur because of shipping cost.

My advice would be not to overcharge on shipping since most buyers take shipping cost into consideration when looking at an auction. Also it is relatively easy for buyers to determine the shipping cost since ebay and most shipping services such as USPS and fedex provide one.

It is fair for sellers to charge a little for handling charges since it take work to package the item and also postage fees. Most buyers would understand however if possible, try to eliminate handling charges except for big and heavy items.

It is also important to first find out the average selling price of your item before even listing it on ebay. This will tell you the starting price you should list and how much is the ending bid.

The most simple way is to browse through the history of the item you are planning to list on ebay. You can get a feel for how much your item is worth and even determine the starting bid by browsing other sellers' items.

Ricky Lim is an avid ebay fanatic who has been quietly earning a comfortable living online. Visit his site for more ebay selling secrets and strategies.