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Member Workshop: The Formula for Deciding What's Hot on eBay - Sept 26
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Last Post Sep 26, 2006 6:23 PM by: deirdre@ebay.com
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deirdre@ebay.com
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Member Workshop: The Formula for Deciding What's Hot on eBay - Sept 26

Aug 31, 2006 2:37 PM
Topic: Member Workshop: The Formula for Deciding What's Hot on eBay

Host: HTDeepAnalysis
Date: Tuesday 09/26
Time: 11:00 am to 12:00 pm PT
Location: Workshop Board

Description: Please Jen Cano of HammerTap market research, a Certified Solution Provider, as she discusses the formula for discovering hot products to sell on eBay. The question isn't whether a product has a great sell-through rate or whether it sells for a great price--it's whether you can make a profit on it. The answer to that question is different for every seller. Join us to learn how to forecast a product's profitability, to predict when a product is gaining momentum in the market, and to make educated decisions about how to expand your business.

Cheers,

Deirdre
eBay Community Development
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htdeepanalysis
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Member Workshop: The Formula for Deciding What's Hot on eBay - Sept 26

Sep 26, 2006 10:39 AM
“Boy, I Got Burned by Selling What's 'Hot'!”

Hot lists are just the start. If you've been around eBay for long, I'll bet you have checked out the “hot lists.” You want to find products that sell. Keep reading to learn how I got burned by just focusing on what was “hot”.

Better yet, by the end of this workshop, you'll learn how to get real-world data so it'll never happen to you. If a product category’s success rate grows even slightly over time, it makes the hot list. But never gamble in Vegas with those odds. You'll lose your shirt!

Hi, I’m Jen Cano, a HammerTap eBay Certified Consultant. We are a Certified Solution Provider specializing in eBay market research. More importantly, I'm an eBay seller like you are. My time spent “down in the trenches” making great money with eBay is the only credential you should care about.
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htdeepanalysis
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Member Workshop: The Formula for Deciding What's Hot on eBay - Sept 26

Sep 26, 2006 10:39 AM
When everyone sells from the hot list, guess what? It's not profitable anymore because everyone is selling it. I won't make you fess up here, but odds are you have a beenie baby or two around the house. What's hot today may be your next yard sale “bargain” tomorrow. You have to catch a product when it's most profitable. Read on and I'll show you how to find out with hard facts and reliable research. That sure beats basing your profit on a hunch.

Here are a couple of stories of common blunders. They illustrate why knowing what's selling on eBay is only half the story. Maybe you'll relate with some of them.
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htdeepanalysis
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Member Workshop: The Formula for Deciding What's Hot on eBay - Sept 26

Sep 26, 2006 10:40 AM
Scenario One:
Last fall a woman called me in a panic. She bought over $1500 in women's clothing and was having a tough time unloading them. With a garage full of inventory (and probably an unhappy husband) she needed help.

“How'd that happen?!” I asked her. A visit to a “hot list” was at the heart of the problem. The women's clothing category was hot. She felt that was all the facts she needed to make a decision on what to sell on eBay. She bought women's clothing... lots of women's clothing. She ignored style, color, size, and brand. She quickly bought all she could get her hands on.

So what went wrong? She did research before buying, right? What could she have done better?

This point is critical. We call out especially to the more seasoned sellers out there for your feedback and opinion. Those new to eBay will also have experience we can all benefit from. Begin your response with “What went wrong in scenario one?” OK, let's hear what you think.
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htdeepanalysis
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Member Workshop: The Formula for Deciding What's Hot on eBay - Sept 26

Sep 26, 2006 10:40 AM
Scenario Two:
The second example hits close to home... too close for my comfort. Yep, early in my eBay selling career, I made a big blunder. Like many of you, I was still learning the ropes. We all have to start somewhere.

I researched great-selling products. I did my homework, even looking beyond the hot lists to find out which products would be sure to sell. I discovered lotions really sell well online. I picked one called “For Every Body”.

Armed with my marketing research, I was poised to make some great money... or so I thought. Other than knowing lotions were likely to sell on eBay, what key data did I lack to know if this product was profitable?

OK, I need some volunteers from the audience. Where did I go wrong? I can look back at the experience and laugh now, so don't be shy about telling me where I goofed. Begin your response with “What went wrong with scenario two?”
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htdeepanalysis
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Member Workshop: The Formula for Deciding What's Hot on eBay - Sept 26

Sep 26, 2006 10:40 AM
Here's what was missing. You need the right data to support informed eBay buying and selling decisions. You need tools to provide that knowledge. Most of all, you need a system for predictable success.

Why a system? Here's a quick quiz. When you think of fast food hamburgers, who first comes to mind? McDonald's maybe? Why? Because many years ago, an unknown named Ray Crok turned making burgers into a process.

Ever notice how you get the same burger in at McDonald’s in San Francisco at that you do in Atlanta? It's because of a process. More importantly, every aspect of running a McDonald's franchise also works predictably, including the profits made. Ray Crok invented the “turn key” system. Follow the process and you'll consistently succeed in the burger biz.
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htdeepanalysis
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Member Workshop: The Formula for Deciding What's Hot on eBay - Sept 26

Sep 26, 2006 10:40 AM
Few of us aspire to make burgers. We want to make money on eBay. What I'm about to reveal to you is that for predictable eBay profits, there is also a system.

Follow this 4-step system and you're way ahead of the thousands of eBay sellers working on a “hunch”. You'll learn how to find products about to explode in popularity BEFORE they make the hot lists.

Once they make the list, the secret is out. Suddenly, everyone wants to sell that item. Often, by the time a product makes the hot list, competition forces the price down. The window of opportunity to make great money on that item is lost forever.
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htdeepanalysis
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Member Workshop: The Formula for Deciding What's Hot on eBay - Sept 26

Sep 26, 2006 10:41 AM
Four Step Process to Find Out What’s Hot
Here's your 4-step turn-key process. With the right tools, you'll discover how easy and profitable it is to follow.


  1. Where do I find the product? (its “source”)

  2. Where is it in its life-cycle?

  3. What will it cost for me to sell it?

  4. How much profit will I make selling it?



Griff, the dean of eBay University interviewed me last month on eBay Radio.
. His comment was that these steps are just good, solid business principles lead to success. He's right. You'll find as much competition on eBay as with other markets (probably more). Traditional businesses don't consider selling a product without market research. Neither should you.
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htdeepanalysis
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Member Workshop: The Formula for Deciding What's Hot on eBay - Sept 26

Sep 26, 2006 10:41 AM
Picture this. You have a cross-country flight you need to take. As you board, you glance to your left and see your pilot thumping on a dark control panel. All of a sudden it lights up and the dials come to life. The pilot says, “Great, they're working again!”

Just tell me this, do you continue to board, or do you turn around? If a pilot's instruments don't work, you'd better hope the airline cares enough about your safety to never risk leaving the ground.

Here's the exciting part. You don't have to run your eBay business “flying blind” either. I'll show you how to “pre-flight check” the products you sell on eBay.
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htdeepanalysis
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Member Workshop: The Formula for Deciding What's Hot on eBay - Sept 26

Sep 26, 2006 10:41 AM
Step 1: What’s my product source?

You can get your eBay products from many sources. What makes it a good source? A good source reliably provides products at a low enough price point that you make the most money on the item when you sell it.

Here's an example. I want to sell women's jeans. First I need to find which brands, sizes, and colors people want to buy. More vital is how much I can expect to make selling them on eBay.

Here's an example marketing dashboard (below) from the HammerTap eBay market research tool. It shows how likely you are to sell a product (Listing Success Rate or LSR). You also discover how much it's likely to sell for (Average Selling Price or ASP). The three dashboards below compare three different brands of women’s jeans: Maty Davis, NYDJ, and Lucky brand Sweet Dreams.



Figure 1: Lucky Sweet Dreams--success rate=63%, price=$34



Figure 2: Maty Davis: success rate=63%, price=$34



Figure 3: NYDJ--success rate=63%, price=$34
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htdeepanalysis
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Member Workshop: The Formula for Deciding What's Hot on eBay - Sept 26

Sep 26, 2006 10:41 AM
Let's summarize what we found out about these brands of jeans:

Lucky: 62.97%, $33.97
Davis: 68.75%, $51.43
NYDJ: 84.21%, $56.76

So, based on the findings above, which brand should you sell? If this is the only research we do, NYDJ is the most likely to sell (84.21%) and will sell for the most money ($56.76). Great, we have a winner! Right?

Not yet. The question we answer in step 1 of the success formula is, “Where do I find the product?” We need to know how much it will cost before we know how much profit we will make. That varies widely from vendor to vendor.

Let's say you find a source for Davis jeans which sells them for $38, much less than the price they will sell for on the eBay market. Your cheapest source for NYDJ jeans sells them for $50. Is NYDJ still the better buy? You'll make $13.43 selling Davis jeans and $6.76 selling NYDJ jeans.

The last data point to consider is which product is more likely to sell. The NYDJ jeans are 15.46% more likely to sell. Does the profit difference outweigh the fact that NYDJ jeans are more likely to sell. Let's find out.
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htdeepanalysis
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Member Workshop: The Formula for Deciding What's Hot on eBay - Sept 26

Sep 26, 2006 10:42 AM
Remember, this is just step 1 of the success formula, “Where do I find the product?” We still have 3 more steps to go.

Based on the research, which brand do you choose? NYDJ jeans look the most promising with the information we have right now. Right?

Here’s where the question of “Where do I get it?” comes in. What if you find a source that will sell you Davis jeans for much lower price than you can find NYDJ jeans? Because the selling price is close (Davis at $51.43, and NYDJ at $56.76), you might decide on Davis jeans, instead, just to make a higher profit, even if your chances of selling aren’t as high.

But then, what if you find Lucky jeans at rock-bottom prices and you’d make a bigger profit on those, despite the fact that they sell on eBay for a lower price than NYDJ or Davis? These are your questions when deciding where to get your product.

Once we’ve decided where to get it, because that product will give us the biggest profit margin, have we found a hot product now? Nope, we still have three more steps.
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htdeepanalysis
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Member Workshop: The Formula for Deciding What's Hot on eBay - Sept 26

Sep 26, 2006 10:42 AM
Step 2: Where is it in the Product Life-Cycle?

Now you have a solid product idea. And you’ve determined that if you had that product on the market right now, you’d be making a killing.

The thing to remember is that you don’t have it on the market right now. And, at this stage in the process, you don’t yet know whether the product is just picking up speed, or if it’s about to drop like a rock to the bottom of that great big pond.

Every product goes through a cycle that begins with a little interest, then more buyers (demand) and not enough sellers (supply), and gradually ends in too many sellers (supply) and not enough buyers (demand). It’s a bit like a roller-coaster, and it’s called the product life-cycle.
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htdeepanalysis
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Member Workshop: The Formula for Deciding What's Hot on eBay - Sept 26

Sep 26, 2006 10:42 AM
Here comes the fun part—riding the roller-coaster while being in control. You know when to get on, and when to get off. Here it is, in all its simplicity:

1. Early Phase: Buyers (demand) are increasing, and sellers (supply) are few. This forces higher prices because there is a lot of buyer competition for the same product.
2. Competition Phase: More suppliers have entered the market. This means heavy competition. But, it’s still okay, because demand (buyers) for the item is still on the up-ward trend.
3. Decay Phase: This is just what it sounds like. At the beginning of this phase, interest in the product is beginning to decrease, but there are more sellers than ever. Now there aren’t enough buyers (demand) for all the product that’s available.

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Member Workshop: The Formula for Deciding What's Hot on eBay - Sept 26

Sep 26, 2006 10:42 AM
So how do you decide where a product is in its life-cycle? Again, we turn to the data to find out. What we’re looking for is how the supply and demand change over time. Here’s a quick-reference way to remember:

Early Phase: Increasing buyers, few sellers
Competition Phase: Buyers remain steady, competition increasing
Decay Phase: Decreasing buyers, even more sellers

Let’s take a closer look at each phase, so you’ll know it when you see it in the data.
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