Today I am going to share some great value I personally created by using last 18 months of my time focusing on selling products on Ebay. Maybe you have read my last few posts and maybe this is the first time you are reading my blog. It’s all good. I will refer to some contents in previous posts, but I will make the navigation as easy as possible.
In today’s post, I am going to show you step by step how I begin with an idea, followed by a process of conducting a product research on ebay, studying the demand and supply from the market and eventually find an idea product. I am going to use screen shots and YouTube videos to make the process easy to follow. If you find anything unclear or confusing during your reading, please leave me a comment by the end of this post or just simply shoot me an email, I promise I will provide explanations in more details.
If I just simply tell you the facts by using plain words, it might be too boring and not very easy for you to follow – who wants to listen to all the theories anyway? So I decide to use a real life example to show you exactly how I find an ideal product. If you come across any good ideas, I want to ask you a favor by telling me how you have done that, so we can learn from each other and also help my future sharing with greater value that both of you and I create today.
I spent some time last weekend and searched for a new product line by using the tools that I am going to introduce in this post later. Here come my steps:
Like what I mentioned in my previous post, locate your target market, this time I decide to focus on ladies as they are the 80% of online shoppers. Don’t get me wrong, I am not saying that you can’t run a successful business by focusing on guys, to be very honest here, two of my current selling products are big boys’ toys, and they are both generating good income, so if your idea is to target gentlemen, by all mean, go for it! Also as I pointed out in my previous post, Find your niche product for a niche market, hobby rated products have been my favorite so far. Therefore I started my research by using google search engine and found general ideas on common hobbies for ladies from two blog posts:
This step takes me about 5-10 minutes.
2. Brainstorm products:
The ideas I found from step 1 helped me on starting my research, so I went through each of them by brainstorming the possible products I can come up with related to these hobbies. For example,
1) For cooking, I was considering selling cooking books, recipes and kitchenware.
2) For running, I was thinking about products such as apparels, mp3 accessories.
3) For Gardening, I looked at offering tools and garden decors.
For myself, I eventually decided to focus on home decors as it’s not only something very popular, but also it’s a subject my wife is very interested, so I rather kill two birds with one stone – remember we were talking about “work effectively and efficiently” here.
This step takes me about 30 minutes to 45 minutes.
P.S. I typed out my ideas for each hobby in a word document and saved in my work folder in my computer for future use as I believe the best idea might not come out from my mind for the very first time.
3. Find out how good your product is.
“How good is my idea?” is the question you might want to ask yourself, so in this section I am going to show you a couple of ways you can use to find out the answer yourself.
Before you dive into the research, there are the results you want to keep in mind:
– Supply: How big is the market? How many active listings are out there?
– Demand: How many people are buying this kind of products?
– Competition: Is this product line oversupplied or there are still more rooms to offer supply? What kind of competition is on the market? Is this type of products offered by a couple of big sellers or the market share is divided quite equally to several sellers?
I will first start with a DIY way and I will get into some details on how to use a great tool called Terapeak to conduct your ebay research.
This is the simplest way without costing any money by only using ebay search function. However it does take more time to see the results.
Go to ebay.com (or ebay.ca if you are in Canada) – Please notice that the beauty of running a business on ebay is not to limit yourself to any geographic area, so I highly recommend you to aim globally at this early stage, and type in the key word of your product into the default search function on ebay.
Continue with my example here, I got close to 2 million items selling on ebay after I typed in “home décor”. That is a lot! Now you noticed that right under where I typed in my product, ebay gave some more specific categories such as “modern home décor”, “wall décor”, etc. In addition, on the left hand side bar, it listed the details on each sub category under the main category, “Home & Garden”. However, you do not want to be too specific on your research yet as this all depends on the suppliers you can find in the future. From my previous experience, if you narrow down your research too early, you might not have enough products to sell for the future.
Further down to the left hand bar, there are some categories you want to pay more attentions to.
b. Buying formats: This depends on the character of your product, most of the items I am selling are using the format, “Buy It Now”, but auction can be a very good strategy when dealing with very popular items such as Apple iphones and I had great success by employing auctions in early years when selling mp3 players.
c. Show Only: It gives the great inside when including different parameters. I feel like I need to expand a little bit on this topic here by sharing some of my stories:
> Expedited shipping: during holiday seasons of year 2011, I added expedited shipping to my gift products 2 weeks before Christmas as I received increasing requests from customers on expedited shipping. In the most extreme case, one customer paid me to use UPS 2 day guarantee delivery service, which costs close to $45 USD to ship one of my items with a price $60 as a gift to her friend at a different location. To me, this is a little insane (excuse me), but, that’s once a year, for the wonderful Christmas, why not. I am pretty sure you and I have run into the same situation before by doing the best we can to impress our significant ones.
> Free Shipping: When I first started selling a certain series of products in year 2010, I included shipping costs like what I usually did, but the product did not sell much. I knew there was nothing wrong with the products and I was very confident that my listings were way prettier than my competitors, so I did more research by using this filter. All in the sudden, I realized that almost every single seller selling the same type of products at that time offered free shipping. Why? Because it’s easy for customers to calculate the total cost and it also offers a smart option for discount. I changed all my listings overnight and in 2 months, my sales went up 150%!
> Completed Shipping: This good option filters the active listings and only shows you what happened to the ended listing in last few weeks. As you know, when you are selling products, it does not matter how many people are looking at them. What really matters is how many of them actually bought your products. This gives you a clue.
d. Location: There are suppliers who only offer products and services in USA, so this gives you the ability to filter by using different geographic area.
There are some signs you want to watch very closely:
a. Oversupply: Many active listings are on the market, but very few of them made sales. One of the examples I want to use here is “perfume”. In year 2010, I didn’t pay too much attention to this factor while I was doing my research and end up wasting around 15 hours of my time by giving up on this type of products. I hope you learn from my lesson.
b. Price variance is big: For the exact same product, sometimes the price range can be very wide. Usually this happens to less popular items. When there are no major bands taking the major market shares for this certain product line, there is no clear guideline, so sellers can mark the price as whatever amount they like. In this case, there is a big potential for price wars to happen in the future.
c. No major brands, but one or two big sellers. This is an awkward monopoly or oligopoly situation, which usually creates the higher barrier to newbies. It’s not hard for you to agree with me that to start a retail business today and directly compete with Wal-Mart is no different than suicide.
Study your competitors’ performance. This is where I like ebay the most. It gave you track records of all the sellers on ebay by providing a feedback system. By studying the statistics carefully, you can figure out:
a. Reputation: the feedback score tells you how good the quality of the products they are carrying and how well they provide their customers service. In addition, it also shows you what kind of volumes they are selling (you need to run a little bit math here though). If you have no clue about what I am talking about, I will expand this topic in my future posts when I talked about how to manage your ebay account.
b. Listing layout: This tells what kind of tactics your competitors are using to make the product more visual and sometimes you can even learn upsell opportunities from them if you studied their listing hardly enough.
This process can take up to 1.5 hours or even more depending how much details you want to get.
If you have made this far on reading my post, I appreciate your time. Don’t forget, if you have experiences you want to share, please leave a comment.
2) Use analytical tools for ebay:
Maybe there is a little bit overwhelming at the beginning, but Terapeak can help you with quick and easy to understand statistics to make the product research as easy as pie.
While ebay is growing dramatically in last decade, there are more and more websites appearing onto the market and they start offering different tools to help analyzing products and improve the efficiency for listing for ebay users.
As sellers, we will focus on the type of tools to analyze the data from current selling products on ebay in order to study the market and the competitors quicker and better. In future posts, I will also talk about the type of tools I use to help list products.
There are quite a few analytical tools out there for ebay. Terapeak, Hammertap Goofbay, just to name a few. As Terapeak is the one I used in the past, I will focus on explaining how you can utilize it for your product research in my post.
First let’s start with a 70 seconds commercial made by Terapeak.
For an overview, you can go to Terapeak’s website. Please notice that Terapeak has an alliance with ebay, so all the data it’s providing from ebay is very accurate and trustable, which is also the main reason I chose it from its peers.
The common wisdom of “you get what you pay for” is applicable here when thinking about using this tool. Most of the analytical tools for ebay charge you a monthly or annual fee. I can only tell you from my own experience that this tool worth my time. Of course if you prefer to do-it-yourself, I already showed you how to do that in last section.
Terapeak offers a 7 day free trial to help you with an easy start. The registration is very straight forward and you need to provide your email address and payment method – credit card or Paypal. As I cancelled the services for a few months while I was away for certain time period in year 2011, in my opinion whenever you want to cancel the service there is no hassle at all. Once you complete the email activation, you can set up your password and ready to go.
I include my youTube video on some basics of using TeraPeak tool and you are more than welcome to leave your feedbacks and please let me know how I can improve it in the future.
This process takes me 15 minutes to find all the key factors, so I think Terapeak is a tool with detailed statistics to help on my research both effectively and efficiently.
4. Save competitors information for later use
After you have done your research, you want to save the top competitors selling the product you found. Even though you might have spent quite some time to research the sellers.
In near future, after you figure out the suppliers, you will start listing your products on ebay, at that time, the listings of your top competitors especially their top selling products in that category will give you excellent examples of how you should build your listings.
This will only take 5-10 minutes if you already skim through some of your competitors’ top selling listings in step 3.
Congratulations if you have read through the whole post. I know it’s a long one and lots of information was involved. More importantly, you need to apply your have just learned into actions as soon as you can. If you have any questions, or comments, please email me directly or leave me a comment and I will get back to you as soon as possible. If you had any success on finding your ideal products, please share it!
Why is this important? It helps you focus on and improve your effectiveness and efficiency. You see I mention these words lots of times in my blog posts. That’s because I truly believe that’s where you can differentiate yourself from the rest. As human beings, we often find hard time to step out from our comfort zone. We ignore the probability to improve our lives, or as an idiom says,” if it’s not broke don’t fix it.”
To run a successful business is not about to make everything working, it’s to be selective. I came across more than 10 products when I was running my product researches on ebay, but only ended up selling 3 of them right now. It was not because the rest did not work out. In fact, all of them are decent products and I made money on any single one of them, however there are ones with lower profit margin. That means I have to sell more time in order to reach my dollar target. The time I spend in processing orders and looking after customer inquires doubled or even tripled, so as soon as I find better products, they are out of my consideration.
Timothy Ferriss talked a lot regarding 80-20 rule is his book, The 4-Hour Workweek: Escape 9-5, Live Anywhere, and Join the New Rich (Expanded and Updated). As this is the spirit of being selective, I decide to spend a little bit time here to explain it. The 80-20 rule was created by Italian economist Vilfredo Pareto early last century. After the rule was created, it has been applied into different areas. The basic idea in 80-20 rule says in anything a few (20%) are vital while many (80%) are trivial.
To apply this to the ebay business we are talking about here, I often find it is true that about 80% of my income are earned from about 20% of my products. I was still offering the other 80% of the product just for the sake of giving more options to the customers, however very quickly I realized that was a silly idea as it wasted my time (as I have to list the products) and money (as I have to pay listing fees to ebay for each product), so I took down about 40% of the products that were not selling (to be more accurate, no selling in 60 days). That action not only saved me more than $25 per month, but also saved me 15% of my time on running those products. On the customer services side, this is also true. 20% or even less in my situation, about 5% customers were causing me 80% of the time on dealing issues with them. To improve on this, I fired some of the customers – don’t assume customers are always right. Trust me, there are irresponsible people out there, so the best way to save yourself from trouble is not to deal with them in the future.
Be selective and say no to options that did not work the best.
What is a niche market? The definition from Wikipedia says, “A niche market is the subset of the market on which a specific product is focusing”. A niche product is the specific product from the definition. To find a niche product, you need to find your target market first, study their needs and wants plus their spending habit. If your target market is too broad, it’s very easy to lose focus.
From my previous experiences, you can target a particular group of people and find a product to serve them. My favorite type of products is hobby related. People with same kind of hobby can be grouped together. No matter their gender, age or income. Hobby is a particular way to enjoy life because when you are enjoying your hobby, you can easily have a relief from the stress that bothers you all the time and shift you mind away from your busy life.When dealing with hobby, people are very emotional and willing to spend their hardly saved money, to you as a seller, this is a good starting point. You do need to spend some time to understand the hobby related products in order to talk in same language with you customers, but remember an expert really just means a person who understands a little more than a average person in a particular area.
There is another type of products that are more ideal than hobby related products, which is addiction related, but so far I have not found any good ones on ebay. If you come across any, please let me know.
If you find it’s hard to think of any product, try to search on ebay directly and browse its sub categories. Sometimes you might find something that worth giving it a try. For this approach, I call it top down approach, as you start from the top of the category and go all the way down. One thing to kind in mind is, in order to be more specific, it’s ideal if you go down to the 3rd layer of the category trees. For example, if you want to sell some products in “Cell Phone & Accessories”, you want to go from top down as far as “Cell Phone & Accessories” -> “Phone Cards and SIM Cards” ->”SIM card reader”, because in most of the cases, before you reach the 3rd layer, it’s still too broad.
To find a good product is not very easy. With easy access to information today, good products are spread out very quickly. There are tons of giant online retailers out there and they keep adding new products into their product lines everyday, to directly compete with them is no difference to suicide, however don’t be disappointed. Niche products are found everyday and you don’t need to have the best price in order to have your products sold. To start a solid market research helps you on future growing and avoids overheated competition from the beginning. In today’s post, I will share an overview of market research to look for a good product to sell on ebay.
From the graph on the left side , there are 4 important steps you need to go through to find a decent product.
1. Have a product in mind. This is your niche and you need to know why you are selling this products and what kind of customers you will be dealing with the future. There are some debates out there talking about if you should sell something you have true passion or you should sell something you have absolutely no idea, or something in between. personally I have proved that any of these three types of product will work and to me there is no one better than others. However I want to share a few tips here.
a) If you are selling something you really enjoy, do not fall into the trap of using your emotion to judge your customers. You need to understand every person has different opinion on the same product, so you don’t want to assume all your customers have same passion and same feeling of the product as you do. Depending too much on your own judgement, you will most likely overestimate the importance of your product and might end up overpricing them or easy to become very emotional when dealing with issues.
b) To sell something you do not have idea is more subjective, but what you want to focus is spending enough time on learning the product features and understand how it work. For example, when I first started one of my hot selling products, I had no idea how to answer the technique questions from the customers, luckily I have a very good support team backing me up from your supplier. After 3 months, I experienced enough questions and learned a lot about the product, I became an expert of the product and help lots of customer by providing answers in a very quick manner and win the customers by providing the best customer services.
c) The third category is easier to handle as it’s in between, but remember keep learning and improving efficiency if always the key.
2. Once a product is decided, you need to run detailed research on ebay to check for existing competitions. If you come across a very good product, but can barely find someone else selling it on ebay, be careful, check ebay’s policy and make sure that type of product is allowed on ebay as there are certain products are forbidden on ebay such as adult toys, tabacco and alcoholic beverages, just to name a few. If everything looks fine, good luck. You must have found gold. Go right ahead to crush it! In most cases, the following are true: products with more competition leads lower profit margin and products with less competition results higher profit margin, but less volume. What is ideal?well, pretty much nothing. If a niche product is so popular and the existing competition is so low, more sellers will appear very soon.
3. I put supplier research to the 3rd step, but you can actually change the order of it with ebay competition research (step 2). Feel free to find suppliers before you do any ebay research as long as you have a product in mind. Suppliers can be found locally or from all over the world on the Internet. To find a good supplier is only the first half of the step, more importantly, you need to make sure that they can work with you. Unfortunately the fact is lots of suppliers do not even work with retailers directly. I will explain the reasons in more details in my future posts.
4. Price analysis is the last step before you start your listings. This step makes sure it’s reasonable to sell the product you chose. Even you are not running a physical store, there are bills you need to pay mainly with ebay and paypal. If you are other tools to help you with your efficiency, there is a good chance that you need to pay a little more. I tried hard to keep my expenses to very low, but I still have to pay a minimum of $75 for each of my ebay accounts without selling any product.
Congratulations If you have gone through the 4 steps above! Very likely you found a good product and ready to put in your hardwork upfront. If you get stuck in any of steps 2-4, do not worry, it’s still early to change your mind and start searching a new product all over again.
In my nest few posts, I am going to explain step 1-4 in more details by providing tools and also explain how to use those tools. I will use YouTube video to help my demonstration and today I am proudly announce here, I just made my first your tube video on YouTude. Please use the following link to check it out and I hope you like my face!
In the last 5 posts, I shared my personal story of selling on ebay and talked about all the basics including trading time for money, getting started. I also covered topics regarding Goal setting, making plans and how to work effectively and efficiently. Thank you for your patience and please understand all the basics are very critical and they are the foundation of your building. Without strong foundation, no income stream can last for too long.
Starting from this post I will talk about market research. I know many of you have the same question to ask me, “what kind of product can I sell on ebay to make money?” The bad news, which is actually also a good news, is I can’t tell you with a simple answer. The reasons are the following:
1. If I just simply tell you a product that is proved by me can earn you a good income stream from ebay, the chance is you are not the only reading my blog, so it will end up with too much competition and the product will not be good anymore.
2. I rather share with you the way I did it, because I believe many of you have way more better ideas than mine and you just need some little hint to become next Bill Gates or Mark Zuckerberg.
3. “Give a man a fish; you have fed him for today. Teach a man to fish; and you have fed him for a lifetime” – that’s why I create value and share here rather than simply giving you some cash.
Before you dive into the time-consuming market research, you will need to spend some time to locate your target market. Do not assume your product will be a good fit for everyone, that’s not reasonable, so be specific!
I want to give you some directions to start with and please think very hard and find your market niche to create your own kingdom.
Statistics is showing that 80% of online shoppers are ladies and the major age group is between 16 to 60 years old, so this tells us to focus on this particular group. Ask yourself ( if you are a lady) and your female friends, what kind of products ladies prefer to shop on ebay.
Down to the fundamental of economy, the gap between demand and supply creates business opportunities, so to find your niche products, come up with the keywords and research on google and see if the competition is overheated.
The best tool you can use from google is Adwords and I will suggest you to learn how to use it. On my blog, as my focus is to sell on ebay, I will explain the particular tools just for ebay researches.