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November 2006 - How To find Niche Markets on eBayThe eBay Seller's News,
November 2006, Volume 6, No. 11
You might notice a little different format to this month's newsletter. We have moved the lead article and the table of contents to the top of the page. We did this for two reasons. First to make it easier for you to see what is in each issue and secondly to make my newsletter pages more search engine friendly. Google and Yahoo can now index these pages by topic. Notice that you can also go directly to an article by clicking on the title in the contents list. Welcome to the over 300 new readers who joined us this month. For the past several months I have been asking anyone who has not verified their subscription to do so. I hate to sound like a broken record, but newsletter delivery services such as the one that I use, Topica, are now demanding newsletter subscribers be confirmed. So if you receive a confirmation request message from me, it's not spam or someone phishing your account. Just click on the confirm your subscription link and it will ask for your first name and email address. That is all we need. eBay did something really great last week. They redesigned the place bid page so it will load faster. This will make it easier to place last second bids on auctions when you are trying to win something. This is also better for sellers as it allows more --and therefore higher, bids right at the end of your auctions. When an auction-style listing has 15 minutes or less left before it ends, buyers will see a new Refresh link near the Place Bid or Buy It Now buttons. Using this link will update just the top section of the page, which shows the current high bid, the time left, etc., instead of the full page. This will make it much faster when seconds count – especially for members using slower internet connections. Rob Chesnut, The Senior VP of Trust and Safety for eBay made an important announcement this week that is going to have long-lasting and far-reaching impacts on buyers and sellers. eBay announced plans to hide bidder IDs on eBay Motors in an effort to prevent fraud. They will roll out the system on eBay Motors only for now, but plan to roll it out on all of eBay in early 2007. The program is designed to help prevent phony second-chance offers, email phishing (spoof emails) and other scams that take place by having bidder information available to everyone. This is already becoming a very controversial subject on eBay boards. The announcement details are a bit too long and complex to list here, so please click here to read the announcement from Rob Chesnut. Please read the announcement very carefully as there is a lot of detail. Our new Internet & eBay Product Review Section launched last month has been a big success. I received several emails from readers thanking us for making sense of all the money making products out there. A couple of you disagreed with my choices and that is OK. But remember, I only recommend products and services that come with a money-back guarantee, so if you are unhappy with anything you purchase from the product review page, just send a polite request for a refund. If you don't get one, let me know and I will help out. Multi-channel marketing is hot. Despite all of the eBay automation software and tools on the market, I am always amazed when another company comes along. A new guy on the block is Laris. Laris is a multi-channel automation tool. It has some very unique features including the ability to manage sales from eBay, your own website and other shopping venues all from one tool. It is no secret that sellers are moving beyond eBay to selling on other venues such as Amazon, Overstock, Yahoo Stores, Froogle and your own web site. Laris even supports consignment sellers. The main competitor to multi-channel solutions has always been Channel Advisor. Laris does practically evenything ChannelAdvisor does but at about 1/2 the cost. Visit the Laris Website to see a demo and get more information. I have been really impressed with the quality of eBay Workshops lately. One of the best ran on November 1st about Advanced Marketing Techniques for eBay Stores. Upcoming workshops are announced on the eBay Announcement page that you can link to from the bottom of any eBay page. The workshops are also archived so you can listen to them later at the eBay Workshop Calendar Page. [top] How to Find Niche Markets on eBay In the past several issues of this newsletter I have listed a topic called Niche Market of the Month. Although these generate a lot of interest, I often get questions from readers asking how one finds their own niche market. First of all what is a niche market? 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. If you sell only GI Joe action figures then that is a very specialized niche. As product categories come and go, what is considered a niche can change. It used to be if you sold only digital cameras instead of film cameras that was considered a niche, but today the digital camera market on eBay is so large that you would have to sell only one brand of cameras, such as Nikon, to be considered a niche in the camera market. So basically a niche is a sub-category of a larger category of products or services. The narrower, or the smaller, the niche you can find will usually lead to less competition and therefore more profits. If we take the camera example further let's say you start with the broad category of cameras. Now break it down into some possible niches. Here are a few examples Cameras >digital > Nikon > Single Lens Reflex Cameras > film > Vintage > Lieca Cameras > digital > accessories > batteries The further down the category into the various sub-categories you go, and the more specialized you become, your chances of success rise. Why is that? Well think about it a minute. First of all there are fewer companies just selling camera batteries than there are selling cameras. If you specialize only in batteries you will get to know the battery market and the suppliers. Since you can spend all of your money buying batteries rather than smaller quantities of lots of products, you will be able to negotiate better deals with suppliers. Also people searching for batteries will have an easier time finding you. Lastly there is less competition. So how do you find niches? One of the things I like to do is search the various sub-sub-categories on eBay to get ideas. On the eBay home page is a list of categories. When you click on a major category such as Antiques, it takes you to a page with all of the sub-categories. I also like to look at lists of things. One of the best is on a site called MeetUp.com. If you go to their Topics Page you will see a list of over 1000 topics and hobbies that people are interested in and like to chat and share ideas about. Another place to check is Yahoo Groups. On the main groups page is a list of broad topics. When you click on that page it takes you to the sub-category page. Then each sub-category takes you to dozens of sub-sub-categories. Using eBay, Yahoo Groups and MeetUp.com it is fairly easy to come up with a list of topics that you can use as a starting point. Now it's just a matter of brainstorming and research. First start jotting down a list of ideas that come to you. Now once you have a list, start searching on eBay and Google for product ideas. You will be amazed at how the ideas flow. The last thing to do is list the product ideas that seem to have the most promise and use a research tool like HammerTap3 to see if these products sell on eBay. Watch this space. I am just wrapping up a new book: Ten eBay Niche Market Businesses Anyone Can Do. It should be ready by the first week of December. I will give you some info on it in the next newsletter. [top] Selling eBooks and other information products on eBay My latest book, How To Create and Sell Information Products on eBay is still selling very well. As I mentioned last month I am amazed at the ideas that my readers have communicated to me. Among the readers who have contacted me are teachers or instructors in various speciaties. They are doing nothing more than writing down their tips and tricks, writing an instuctional eBook, or creating a how-to video with their camcorder. I don't want to give their specific ideas away as that wouldn't be fair to them, but I have seen some really neat things being sold on eBay lately that I hadn't thought of. One seller goes to auto races. He always buys a pit pass which is very expensive. However, while he is in the pits he is videotaping (sometimes surreptisously) and selling the videos on eBay. He easily recoups his expenses for attending the races and doing something he loves. Here are a few more interesting info productsI have come across on recently eBay:
The last one is very interesting. What this seller is doing is getting old military files for free from the National Archives or the Library of Congress and selling them to military buffs on eBay. He has dozens of titles besides this one. This is an example of how you can make money selling material (books, photos, videos, etc.) that are in the public domain. All of that is explained in a special chapter in my eBay How To Info Book. If you have an idea for an information product, my book will take you through all of the steps to create, design, sell, get paid and deliver your information products. Unlike many of the eBooks on this subject, my printed manual and the bonus CDs take you by the hand and walk you through the process in a very easy to understand way. [top] New eBay Users Continue to Grow, as eBay Grows Sales and Profits eBay reported third-quarter 2006 net revenues of $1.449 billion, representing a growth rate of 31% year over year, but operating income was $339 million, a decrease of 5% year over year, and represented 23% of net revenues. Net income was $281 million, an increase of 10% year over year --not great, but not too bad either. Their income was actually a bit higher but they had to factor in stock option costs for eBay employees and executives that lowered it a little. It looks like the explosive growth days of eBay are over, but the company is still growing at a nice pace. Here were some of the highlights of the announcement. These are quotes from eBay:
eBay added 9 million new users in the quarter, bringing the total registered user base to 212 million users. eBay new listings in the quarter were 584 million, representing year-over-year growth of 27%. Core listings were up 20%, and store inventory listings grew by 85% to 95 million new listings in the quarter. I find it interesting that store listing grew by 85% even with the store fee increase. This is probably because eBay announced the fee increase late in the quarter. I suspect this number will change in the fourth quarter. eBay's ability to add new users and grow the platform is good news for sellers. Growth is good for all of us. I also thought the numbers on Skype were interesting. eBay paid around a billion dollars for Skype. At $50 million income for the quarter I would suspect their gross profits were somewhere between $5 and $10 million. If my math is correct, at that rate it will take about 50 years to make back their investment. Unless Skype starts generating revenues of $200 million and profits of $30 to $40 million or more per quarter soon, it doesn't look like it was that great an investment. eBay said the number of Skype users jumped to 136 million users. At $50 million of revenue that works out to $0.36 per user per quarter, or 12-cents per month. I wonder how much it cost eBay to acquire those 23 million new users? I suspect it was a lot more than 36-cents each. There was one interesting bit about Skype that surprised me. I have never been a fan of the Skype Me buttons because as a busy seller I just don't have the time to take all of the calls. I do love to answer questions from my buyers. With email I can set aside some time each morning and afternoon to do that --but it seems to me that calls coming in at all hours would be distracting from my business. However, when asked how the Skype Me buttons were doing, here was Meg Whitman's answer:
If it is true that Skype Me buttons are getting a higher conversion rate, then I might be willing to take another look at it. I would really like to know more. Are the higher conversion rates just in high priced products like jewelry and autos or is it across the board. And just how high are the conversion rates. If eBay really wants this to work, I hope they do some real studies and publish the results. In all fairness to eBay, Skype is a big hit overseas and they are looking at more ways to monetize Skyp. Time will tell if it will work, but the acquisition still looks like a mystery to me. Also I was reading Marsha Collier's (author of eBay for Dummies) newsletter the other day and she is a huge fan of Skype. So maybe I am just not getting it. [top] When eBay released their financial results one thing eBay sellers were looking for was information about the success of eBay Express launched earlier this year. The announcement, and the investors's conference call that followed, had precious little information about eBay Express, but there was one surprise. When eBay Express was launched, eBay touted it as a way to bring more buyers onto eBay who might not be familiar with the site, or who may not enjoy the auction process. However, when asked about eBay Express, Meg said:
If you read between the lines of that statement it tells me that eBay Express has been a flop at attracting new customers and they are going to rely on it to sell more to existing eBay users. Frankly that is a big disappointment to me. It may explain why eBay hasn't followed through with the advertising and promotion they promised us with the launch of eBay express. [top] New Version of The Complete eBay Marketing System Released The Complete eBay Marketing System (CEMS) has been one of my best-selling eBay business manuals of all time. This week I released a completely new version that incorporate changes in eBay policies, tools, fees and selling techniques up through November 1, 2006. I have been running a FREE Shipping special to US customers for the past two months that was supposed to end, but I have decided to extend it through the end of November to acommodate people who want to see the new book. I have also reduced the shipping cost to Canadian customers. I have already received email from buyers who saw the press release asking if they should buy the new up-to-date set. My answer is probably no --unless you bought one a really long time ago such as in 2002. Almost all of the information used to update the new version has been covered in these newsletters. So if you keep up with the newsletter, or just take the time to go through the archives, you can probably get 90% of the new information. But if you are a new reader and are really serious about selling on eBay I suggest you take a look at the new book. There is no risk as all of my books come with a money-back guarantee. Just return the book to the address on the cover within 90 days of purchase and we will refund your entire purchase price. Your only risk is the few dollars postage to return the book. [top] Take Advantage of eBay's Direct Mail Advertising eBay has recently spent millions of dollars mailing out a 32 page full color catalog based on the Get "it" on eBay campaign. The catalog is full of photos of popular consumer products organized by category. Each photo has a short description of the item and a prominent search term listed next to it. I don't know how many people got the catalog, if they were only sent to eBay members, or if they went to other direct mail lists eBay may have purchased --but I do know that millions of copies were sent out. If you did get a copy, or you can get your hands on one, you should go through it and look for products you sell that match the keyword search terms eBay used. Obviously there will be tons of people searching these terms. I couldn't find a link to the catalog on eBay so I emailed someone I know at eBay and she sent me this link: http://pages.ebay.com/catalog. When you click on Shop The Catalog button it will take you through the pages. Unfortunately you have to use the zoom features and zoom in about 400% to read the product descriptions, but if you do this you can see the keywords eBay is promoting. Some keywords are obvious, but others are not. It would be great if each seller were given a list. Another thing that would be helpful is if eBay would send sellers an announcement letting them know when the seasonal catalogs are produced and mailed and a place to request them if they didn't receive one. You can see upcoming catalogs at The Catalog Page on eBay Seller Central, but this page has always been screwed up. For example, here is the link:
It says Summer Catalog in the link, spring catalog in the text and when you link to it you get the Fall catalog. These catalog mailing are great for people who sell the products eBay selected, but not for the rest of us unless the theory is that once people are on eBay they will keep searching and looking around. However, if it brings more people onto eBay then I am all for it. Sellers should visit eBay Seller Central often and look at the What's Hot Page. This page contains a lot of good info on hot keywords and popular search terms as well as other useful information. Here are some of the seller information tools you will find there:
[top] New Wholesale Sources for November 2006 Don't forget my Wholesale Search Engine. I was on there the other day and there are lots of new listing and new wholesalers who advertise. Of course like any search engine you get some junk mixed in with the good stuff, but it is all there if you are patient and keep looking. There are thousands of small and medium sized companies in Australia that export to the US. Many of them have offices and warehouses with products stocked and ready to go right here in the US. I have been working with a representative of The Australian Trade Commission lately to uncover some companies that will work with eBay sellers. We hope to have a list of some companies by the next issue. In the meantime the trade commission has a web site where you can Search for Australian Suppliers. S&P Whistlestop is a pure distributor of trains and other hobby products. You will need to register and create an account before you can see the products and the pricing. Any Time Wholesale has a large selection of watches and gift sets. These are the lower end items --not the big name brands, but these actually sell pretty well on eBay. One of the things they carry are sets of things like a pocket planner, wallet, keyring and small knife. Some of these sell for as little as $8.00 wholesale and will sell on eBay for over $25 which is a pretty nice margin. Greeting cards sell well all year around. It's a little late to order and sell Christmas cards, but Stockwell Greetings sells greeting cards for as little as 19-cents each. I wouldn't try selling one card at a time, but you can sell them in sets or groups. I know when my wife goes to Hallmark she always buys a half-dozen birthday cards at a time so we always have one on hand when a birthday comes up. Many people do buy cards in groups for holidays such as Easter, Valentines Day and St. Patricks Day. JR Western Products is a wholesale-only web site that sells a wide variety of Western clothing, gear and accessories. Western gear is very popular and a big seller on eBay. Airsoft Guns are a huge seller on eBay. Team SD is a new wholesale distributor of Airsoft guns and has some really exciting new models. CWR Electronics is a distributor of Marine Electrnoics. You will have to register to get pricing and details and they will drop ship some of their products. Helmets Inc sells a wide line of DOT approved novelty and designer motorcycle helmets. Click on the link that says Become a Dealer to sign up via an online form. Illunination Arts Publishes award winning children's picture books that inspire the mind, touch
the heart and uplift the spirit. Ma's Bobbin Works is a leading wholesaler of collectible, country items specializing in wooden bobbins. Ma's also offers a variety of limited items including soda flats, milk bottles, and other unique gifts. Minimum Opening Order: $75 NoonTidings, Inc. sells antique and museum reproductions of gift and decorative accessories with a minimum Opening Order of $200 Gourdaments designs and sells gourd creations that take the form of cats, roosters, cows, and pigs. Each
gourd is hand made from head to toe. Clay, leather dye, leather paint, and
varnish are all added. These gourds are lots of fun and the Now here is a niche market. WildBleau sells a line of moisture wicking sleepwear and sheets for women suffering from night sweats and hot flashes. Their minimum order is only $300 If you live near Chicago, there is a cash and carry jewelry and fashion accessory show at the convention center in Schaumburg December 1-3 and in Rosemont, IL at the Stephens Convention Center on January 18-21. You can register online at www.jfashow.com/registration. If you don't live near Chicago, Semipricious.com offers a wide variety of very nice semi-precious stone jewelry as well as semi-precious beads and raw stones if you make your own jewelry. One of their online competitors also with very nice stuff is The Wholesale Gemshop. That's it for this month Skip McGrath
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