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Your Listings Can Beat Up Their Listings with Market Research - Aug 06
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Last Post Aug 6, 2007 11:03 AM by: deirdre@ebay.com
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deirdre@ebay.com
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Your Listings Can Beat Up Their Listings with Market Research - Aug 06

Jul 27, 2007 12:20 AM
Topic: Member Workshop: Your Listings Can Beat Up Their Listings with Market Research

Host: htdeepanalysis
Date: Monday 08/06
Time: 10:00 a.m. to 11:00 a.m. Pacific time
Location: Workshop Board

Description: Please join Jen Cano, from HammerTap, a Certified Solution Provider, as she delivers a formula for outperforming your competition. When it comes to market research, you can always imitate your best competition. But how do you surpass them? Come find out how to build perfect listings based on solid market research, not guesswork.

Cheers,

Deirdre
eBay Community Development
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htdeepanalysis
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Your Listings Can Beat Up Their Listings with Market Research - Aug 06

Aug 6, 2007 9:24 AM

Your Listings Can Beat Up Their Listings with Market Research



A friend recently told me that she wanted to really study her online competition so that she could keep up. I told her that if she just wanted to “keep up” she’d never do it. What she needs to do is find a way to get ahead.

Hello eBay sellers! I’m Jen Cano, with HammerTap, a Certified Solution Provider specializing in ways to help you research your competition. Today we’ll talk about using research to help you not just mimic the best, but speed right on by. They’ll never know what hit ‘em!
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htdeepanalysis
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Your Listings Can Beat Up Their Listings with Market Research - Aug 06

Aug 6, 2007 9:25 AM

Mimicking the Competition Might Be Good Enough


Let me play devil’s advocate for a minute. What’s wrong with mimicking the competition?

My answer is that, short-term, there’s nothing wrong with this approach. There is definitely some money to be made in mimicking. Your top competition has already worked through a lot of the trial and error. They’ve figured out what works and doesn’t work. They know exactly how to attract buyers, and they know exactly how to deliver it to them.

It’s good enough. And you can definitely learn a lot from your top competitor. But only for a little while—not for the long-term.

Why?
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htdeepanalysis
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Your Listings Can Beat Up Their Listings with Market Research - Aug 06

Aug 6, 2007 9:25 AM

Why Mimicking Fails in the End


During this workshop, I just want to focus on two reasons why mimicking fails in the end:

- Market Saturation: If you just sell the most popular item out there, and follow the most popular leader, you’ll both end up sharing the exact same customers—which means less profit for both of you.

- The Full Game Plan: Just because you’re following your competition’s every move, it doesn’t mean you know what they know. This means you can’t anticipate turns in the road the way that they will, and your reactions will be slower and not always appropriate. You may not be able to avoid crucial mistakes, such an inventory surplus when demand starts to go down.

I could add a few more points, but I think these are pretty compelling.

Is there room for another seller and what is the full game plan?
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htdeepanalysis
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Your Listings Can Beat Up Their Listings with Market Research - Aug 06

Aug 6, 2007 9:26 AM

Is there room for me in the market?


Of course, you want to know if there is room for you in your market. More importantly, you’ll want to know if you can make even more room for you in your market.

I would almost always argue that there is room for you in the market. You just need to know how to position yourself in relationship to your competitors. You need to find out what you can do to take some of their market share. And, best of all, you’ll want to capitalize on clients your competition isn’t connecting with at all.

This means--you guessed it--researching the competition.

But, the focus isn’t all on finding out what the competition is doing so you can do the same thing. The focus is on finding out what they’re doing so you can find the holes—the needs—that aren’t being filled.

For this, I have a four-step formula. It’s not very complex and it’s worked very well for many businesses I’ve personally worked with:

Step One: How Big is the Market?
Step Two: Where Am I in the Market?
Step Three: What Can I Do to Take Up More of the Market?
Step Four: How Can I Anticipate Change?
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htdeepanalysis
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Your Listings Can Beat Up Their Listings with Market Research - Aug 06

Aug 6, 2007 9:26 AM

Step 1: How Big is My Market?


Although it’s exciting and tempting to think that your market could be all of eBay, your real market is the potential buyers of your product on the eBay marketplace.

For example, let’s say I sell DVD cameras. I can pull back research results that include only products, buyers, and sellers in my market if I limit my research to the All Categories > Cameras & Photo> Camcorders> DVD(#64332) category.

When I get my research results, I’m looking for the following information about how big my market is:

1) the total number of listings that have closed in the last 30 days,
2) the total dollar amount in sales for the product,
3) the number of sellers who successfully sold a product, and
4) the average number of sales made per seller.
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htdeepanalysis
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Your Listings Can Beat Up Their Listings with Market Research - Aug 06

Aug 6, 2007 9:27 AM

Let’s Look at the Research


When you know what to look for in advance, it’s easier to read the results, don’t you think?

Below we see the answers, in black and white, to our four little questions:



Figure 1: Number of listings, total sales, successful sellers, and average sales per seller.
1) There were 6,288 DVD Camera listings in the last 30 days.
2) Buyers in this market spent $800,944.
3) We have 1037 competitors who made a sale.
4) The average seller made just 3.44 sales.

That’s great, but what does it mean?
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htdeepanalysis
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Your Listings Can Beat Up Their Listings with Market Research - Aug 06

Aug 6, 2007 9:27 AM

What Does the Numbers Tell Us About Market Size?


The first number that jumps out at me is $800,000. That’s a significant amount of money that buyers are pouring into our market. This is encouraging. It’s a healthy market.

Then again, we have 1037 competitors. This could be discouraging if we didn’t also know that, on average, those 1037 sellers made just 3.4 sales each. I know, you’re shaking your head right now and asking if I’m crazy. How is 3.4 sales good news?

Think of it this way. This high number of competitors and such a low number of average sales means that a majority of your competitors are casual sellers, at best. They haven’t gotten serious about selling, and most of them probably aren’t using research to figure out how to reach more customers.

Translation: When there are lots of less-successful sellers in your market, it means you have an opportunity to capture their customers.
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htdeepanalysis
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Your Listings Can Beat Up Their Listings with Market Research - Aug 06

Aug 6, 2007 9:27 AM

Step 2: Where Am I in the Market?


In order to know where you’re going, you’ve got to know where you are. Size yourself up against the other sellers. Are you first, second, tenth, fiftieth? It’s important to know.

Before you can figure out where you fall in, you have to know roughly the number of listings you’ve listed in this market, the number you’ve sold, and your dollar sales for the past 30 days for your product.

Research TIP: You can use a market research tool, such as HammerTap, to research your own listings if you aren’t sure about the answers to these questions.

When you use your research tool to look at individual competitors, look for the seller that matches your information:

1) Total sales,
2) Number of listings,
3) Average Selling Price per Item

When you find that seller, that’s you!
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htdeepanalysis
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Your Listings Can Beat Up Their Listings with Market Research - Aug 06

Aug 6, 2007 9:28 AM

Let’s Look at the Research


This is the Sellers screen in HammerTap. This screen gives certain information about the sellers included in our research. I’ve sorted the table according to Total Sales, so that the seller with the top-dollar sales is first, the second-highest is second, and so forth:



Figure 2: The Top 15 Sellers in this Market

If I’ve sold around $6,838(gross revenue), with about 17 listings, with an average selling price of $402.00, I know I’m number 12 on the list.

* % of Total Auctions means the percentage of the total listings in the entire market that the seller listed. For example, seller 1 listed 12.44% of the total listings for this market.
** Auction Success Rate refers to the percent of listings that seller sold.
** ASP refers to the average selling price per item.
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htdeepanalysis
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Your Listings Can Beat Up Their Listings with Market Research - Aug 06

Aug 6, 2007 9:28 AM

Our Top Competition Says Us a Lot about Room to Grow


Right now, in Figure 2, we’re looking at our most serious competition. Figure 2 shows only the top 15 sellers. I cut off the list there because the success rates of the remaining 1070 or so other sellers dropped off incredibly.

We can learn a lot about the other 1070 sellers just by studying the top 15.

The top 15 sellers represent about 44.25% of the total listings for this market. This means that the remaining 55.75% of the market is being covered by a whopping 1070 sellers.

This is good news. The larger the difference between the number of sellers that make up the top 50% of the market, and the number of sellers that take up the bottom 50% of the market, the bigger our opportunity.
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htdeepanalysis
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Your Listings Can Beat Up Their Listings with Market Research - Aug 06

Aug 6, 2007 9:29 AM

Step 3: What Can I Do to Take Up More of the Market?


15 sellers share a little less than the top half. 1070 sellers share a little more than the bottom half.

What this tells us is that the bottom 1070 sellers:
• Are most likely not educated about what their buyers want.
• May not have access to great sources.
• Might not be serious about selling.
• Might not be experienced sellers.

This is where the room to grow is. More than 50% of the market is not being guarded by vigilant, serious, experienced sellers.

If I can get educated about how to sell more effectively to DVD Camera buyers, using market research, I have a shot at joining the top 15. In this market, that’s not a bad spot to be.

Research Tip: Now that I’ve shown you this, don’t just run out and try to take over this particular market. There’s a lot more involved in deciding on a niche. Begin with the niche you’ve got, and do this research there. It might surprise you what you find and the ideas you’ll get.
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htdeepanalysis
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Your Listings Can Beat Up Their Listings with Market Research - Aug 06

Aug 6, 2007 9:29 AM

Average Isn’t Good Enough


If you’ve attended my workshops or heard me speak, you know my old mantra: “Average Just Isn’t Good Enough.” Doing better than average is exactly how you are going to beat out the bottom 50% of sellers. They are doing worse than average.

This is the whole point of market research—figuring out how to do better than average. Now that we know what the size of this market is, and how much room there is to grow, it’s time to start making a game plan for taking over some of that virtually unclaimed territory.

Below is another look at the HammerTap general results for this market. Only this time, we’re not looking for our opportunity in the market. We’re looking for the averages so that we know what we have to beat:



Figure 3: Average Success Rate

The average Listing Success Rate (LSR) is 53.75%. That means we have to find strategies that will give us better than 53%.
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htdeepanalysis
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Your Listings Can Beat Up Their Listings with Market Research - Aug 06

Aug 6, 2007 9:29 AM

Start with a Specific Product


When you’re ready to find strategies to beat 53%, use an eBay market research tool to research specific products. The research we’ve done so far has been just with an entire category. And while this is a great place to start for sizing up an entire market, it’s a bad place to start when you’re getting ready to sell a specific product.

Research your product. Or, better yet, if you have a research tool that will let you complete a keyword analysis, go find out which brands and styles in your market are associated with the highest LSRs (success rates) and selling prices. Then you’ll have a place to start.

Below is an example of how you might do that:



Figure 4: Keyword Analysis for Cameras that Sell Well
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htdeepanalysis
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Your Listings Can Beat Up Their Listings with Market Research - Aug 06

Aug 6, 2007 9:30 AM

Step Four: How Do I Anticipate Change?


I have a question for you. What does anticipating change have to do with sizing up the market?

If you answered something like, “because the market size doesn’t always stay the same,” you’re absolutely right.

The market changes over time. An item that seems to be selling really well right now might actually be on its way down. And you would definitely want to know that before it happens, right?

Let’s look at our familiar Results window again:


Figure 5: Numbers Indicating Change in the Market

Figure 5 shows some information about the market as a whole. To anticipate change, you would watch for certain numbers (such as LSR, ASP, and Total Sales) to drop over time. If, over a four week period, these numbers consistently drop, you know it’s time for you to change strategies or discontinue the sale of that item and begin selling something else.
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