It sounds very sad. So does it mean that you as a beginner have no opportunities at all. Absolutely not! There are tons of small manufacturers and suppliers out there, who are not very well known and could not even afford to budget on their massive marketing yet. They are waiting to find retailers to spread out their brand as quickly as possible, but the problem is, if they don’t speak loudly, how are you able to hear their voice?
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!
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.