Industry sector: Retail and wholesale

Ebay trader: Market research


Think about how much you already know about the people you hope will be your buyers.

Perhaps you have already been in business for several years, for example selling antiques to collectors and homeowners from an established shop. In which case, you may have a pretty good idea about who a 'typical' customer is, but does that apply on eBay? Or is it the case that someone who would never walk through the doors of an antique shop would be quite happy to buy one of your items online?

Maybe you are a collector of, say, stamps or coins and want to turn your hobby into a business. Over the years you may have built up strong links with the collecting community and you're confident that the same types of people who buy at traditional auctions, fairs and from dealers will be bidding in your online auctions.

Possibly you are a general trader with years of experience selling various things in markets, car boot sales and by mail order. Now you want to branch into eBay trading. Will the eBay community be interested in the same things that you sell at Saturday markets?

Unlike in a traditional shop, you won't normally get to meet your customers face to face before the item is sold (unless you sell things like cars where it is more common for buyers to view items before they purchase). So all you'll have to go on is their user ID, eBay user profile, feedback and anything they tell you when they get in touch.

Try to build up as much information as possible about the types of people who buy from you. Make a note of the following:

  • are they overseas or UK customers?
  • what countries are overseas buyers located in?
  • what part of the country are UK buyers located in?
  • are they regular eBay buyers? (Look at their profile and feedback)

Once you have built up a picture of the types of people who normally buy from you, you can make an extra effort to market your listings to them.

The marketplace

There is always an element of the unknown in an eBay auction - you don't know whether an item will sell and, if it does, how much it will make. While this can add to the excitement for private sellers, the uncertainty can be frustrating for eBay traders. Why did one item get snapped up straight away for top money, when an identical item failed to meet its reserve the following week? You will want to try and eliminate as much of the uncertainty as possible to make your business reasonably predictable.

You could start by searching eBay for the types of item that you intend to sell. Make a note of the following:

  • are there many available?
  • does availability vary from one week to the next?
  • do they attract many bids?
  • do the sellers use reserve prices and/or starting bids to set a minimum price? If so, how much are these?
  • who is selling them - private sellers or traders?
  • do the items always sell?

It would be a good idea to pick several key items and track the progress of the auctions. Once you are registered as an eBay user you can use the 'watch this item feature'. Look at the bid history to see how many different bidders there are. Look out for any pattern in the bidding - does the price rise steadily over the course of the auction or is there a last minute 'bidding war'? Are more bids made at particular times of day or on particular days of the week? If you are watching several similar items, did they all sell? If so, was it for a similar price? How many bids did each attract?

You may find that the outcome of auction listings is so difficult to predict that it makes more sense for you to use only fixed price listings or classified ads.

Use the Record sheet to keep track of the auctions that you are watching.

The competition

eBay and other online marketplaces are very competitive. The smallest part-time trader can compete on an even footing with very large businesses, while private sellers may be able to set lower or no reserves because they don't need to make a profit margin.

Ideally, you will want to make sure that your items attract more buyers and sell for higher prices than those offered by other sellers. Search eBay regularly for the types of item that you intend to sell - look out for sellers who crop up frequently and/or have multiple listings. Make a note of the following:

  • how long have they been registered with eBay? (Their member profile will tell you this)
  • are they an eBay 'PowerSeller'? (Look for the logo)
  • do they have an eBay 'Shop'?
  • how good is their feedback record?
  • what are their terms of trade?
  • which selling formats do they use?
  • what forms of payment do they accept?
  • do they charge extra for postage?

Look out for very successful sellers - what seems to be the secret of their success? Study their descriptions, their titles, their pictures and their page design. You could adopt some of their ideas for your own listings.


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