Niche Marketing Strategies on eBay
by: Skip McGrath author of Ten Little Known Highly Profitable eBay Niche Businesses Anyone Can Do
In the early days of eBay, the site was predominately used to sell collectibles including sports cards, comics, toys and beanie babies. As eBay expanded, more expensive collectibles and antiques began to be sold. By 1999, consumer goods started showing up.
At first most of these were used or overstock items and ASOTV items. During the first two years almost every eBay seller was essentially working in a narrow product area or a niche.
What denotes a niche market? A category is not a niche. For example, if you sell all kinds of toys, you are a toy vendor. If, however, you only sell action figures, then that is a niche. It used to be if you sold only digital cameras that would be considered a niche, but today the digital camera market on eBay is so large that you would have to sell only one type of camera, such as under water cameras, to be considered a niche in the camera market.
Benefits of Niche Marketing
There are two primary benefits of niche marketing:
Let's look at sourcing first. The more time you spend in a market or product category you will learn all the sources of supply for that market. The more you know about a product the better you will be able to buy it.
When I was in the antique business, I used to sell a broad line of 18th and 19th century American antiques. However, within that, I specialized in the niche of early American woodworking tools. After a couple of years, I developed an expertise and a "feel" for the products. I could recognize makers, spot reproductions and I knew what tools were in high demand from collectors that would command high prices. Once I developed the expertise, my profits shot though the roof.
Remember our adage on pricing: You make money when you buy not when you sell. Well I became a very savvy buyer --well able to spot bargains. As word spread that I specialized in old woodworking tools, people with things to sell started seeking me out. At one point I was the largest old tool dealer in our state, and I routinely bought tools that I could sell at markups of 200% to 300%.
It doesn't matter if your nice is brand new merchandise or vintage items. When you decide to specialize in a niche of any kind the first thing you want to do is become expert in that area. Learn and read everything you can about it. Study the history of the product. Get to know the companies that manufacturer the product and their distributors or where you can source a supply of goods. The more you know the better you will be able to buy.
The other benefit of niche marketing is selling. The very fact that you are selling in a narrow market segment means you will have less competition, and therefore you can command higher prices. The other factor is that people prefer to buy from someone who is knowledgeable.
Jennie Hunt is one of the largest eBay sellers of Silverware. She is so well known that people bookmark her store and contact her when they want to buy -or sell.
I get lots of questions from eBay buyers. If you are selling something and you get a question, as an expert or a specialist you will be able to answer the question with authority and detail that will give the bidder instant confidence and more than likely result in a sale.
The other selling advantage of niche marketing is the ability to accurately describe products in your listings. The added knowledge you have from being a specialist allows you to add more data and "insider" information that someone else can not. A potential bidder looking at your listing will have more confidence and perhaps bid more liberally than otherwise.
Finding The Right Niche
Finding your niche is a matter of research and brainstorming. You may already have a hobby, interest or life and work experience in an area that would make a good sales niche on eBay. This is where you should start.
Work is always more fun -and usually more profitable if you are doing something you like. If, for example, you enjoy computers, this is a great area to start your search for a niche. So many people, and even large companies, sell computers on eBay. You would need a large amount of capital to compete in this area. But, the computer field has many sub-categories and there are many niches within these sub-categories. Monitors are a large sub-category, but monitors for gamers could constitute a niche. It takes a lot less capital to buy and build an inventory of monitors than it does of complete computer systems. You could buy monitors in lots of 100 for what 20 complete computers would cost.
Another area might be all the little accessories such as network hubs, cables and connectors, computer speaker systems and so on.
Perhaps you like travel -specifically you like to travel off the beaten path. Selling in the broad travel category could be daunting, but maybe you could work with a local travel agent and package adventure tours or specialty tours that you could sell on eBay.
Movie DVDs are a very large category crowded with hundreds of sellers. Yet there are several players within the Movie DVD category that have found niches such as: Early movies, How-To DVDs (I.E. Learn to play golf or Trick Billiard shots, etc., educational DVDs, Documentaries, and so on).
The same thing goes for Music CDs and DVDs. Entering the broad music category could be difficult and take a large amount of capital to compete, but one could carve out a nice niche in jazz or folk music or Techno rock.
Almost any broad category on eBay has sub-categories, some of which are small enough to qualify as a niche, and others in which you can find a niche. The key is that the niche you find be active enough to generate large sales and not be crowded by hundreds of other sellers.
If you find a niche that is already dominated by one large seller, don't let that stop you if you think you have the ability to compete. A little competition is good for everyone, you, your competitor and the customer. Anyone can do something better. By studying your competitor's auctions and policies, perhaps you can find a way to compete that doesn't require one of you to fail for the other to succeed.
Once again, start your search in areas that interest you. When you have found several areas that interest you, then you need to start your research. First use the eBay keywords report to see if people are searching the terms or keywords for the items you want to sell. Next use the eBay search engine and the Terapeak Research tool to determine the viability of the market.
You may find a very profitable niche, but it is just not deep enough to sustain a large eBay business. It's no good to totally own a niche if your monthly gross merchandise sales (GMS) are only $2000. You want to look for a niche(s) that will support a minimum of $5,000 a month in GMS. $10,000 to $25,000 is even better.
Sometimes you can combine related niches. Going back to the computer example, you could sell monitors and keyboards. If you go into the automotive area you could sell both performance exhaust systems and air-intake systems. These are two different products from different ends of the vehicle, but performance enthusiasts often buy these two components to improve the horsepower of their cars.
When you find a potential niche(s), ask your self these questions before deciding to focus on it or before ordering inventory to sell:
Remember you do not have to totally "own" your niche to be successful, but you will need to be one of the handful of major players to have consistent, predictable and long-term success.
To learn more about this topic take a look at Ten Little Known Highly Profitable eBay Niche Businesses Anyone Can Do .
© 1999- Harry McGrath, Inc., DBA Skip McGrath, Auction Seller's Resource and Vision-One Marketing. All Rights Reserved.
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