Topic: Member Workshop: How to Find Your Place in the Market: Niche Markets for eBay Sellers
Host: worldwidebrandsinc Date: Thursday 05/08 Time: 12:00 p.m. to 1:00 p.m. Pacific time Location:Workshop Board
Description: There are millions of products you can sell very successfully on eBay. You can either try to compete with the superstores of the world by selling mainstream products, OR you can find a smaller, more select group of customers to cater to. Colette Marshall from WorldwideBrands.com explains why you can do better with products that you won’t find on any superstore shelves, and shares how to source products for the niche market that’s right for your eBay business.
Hello, this is Colette Marshall, Marketing Director for WorldwideBrands.com. I’d like to welcome you to this month's workshop!
Today, we’re going to talk about how you can avoid being shut out by the big mega-stores and choose a product market that you can thrive in. In this workshop, you’ll learn how sourcing niche products with LESS demand can actually result in MORE sales for your eBay business! We get a lot of questions from eBay sellers about how to beat the brick-and-mortar superstores of the world. They’re frustrated because they can’t find wholesale prices that will let them compete with all the mega-marts and big box stores. Sometimes they think that their wholesale suppliers are middlemen, because their wholesale prices are higher than the superstores’ retail prices.
The simple fact is that the superstores are buying those mainstream products in such massive quantities that they’re getting additional price breaks and rebates. Unless you can afford to buy hundreds of thousands, or even millions, of dollars of product at a time, you’re simply not going to get the same wholesale prices that the huge retail chains can. So the unfortunate answer to “How do I compete with the big box stores?” is “You don’t”.
This might sound like bad news, but it actually presents you, as an eBay seller, with a great opportunity.
You see, those big stores make their money by turning their inventory over as quickly as possible. They have limited shelf space, which means they can’t justify carrying any items that don’t fly off their shelves as soon as they put them out.
Wal-Mart, for example, is the nation’s top retailer, but they carry only 3% of the available music. That means that there are tons of music selections that music fans can’t find there.
This is where the opportunity comes in for you, the eBay seller. Unless a buyer lives in a huge metropolis that can support all kinds of specialty stores, the only place that they can find most non-mainstream products is online, and that is exactly where they’re going to look.
Several years ago, author Chris Anderson wrote a best-selling book “The Long Tail”, that highlighted this eCommerce opportunity. In this book, Chris asserted that the mainstream, fast-selling products make up the “head” of the product market and represent the bulk of sales for big box chain stores. The slower-moving, niche products make up the “tail” of the market; and this trailing tail of product can cumulatively account for as much, or more, in total sales than the “hot” popular products at the head of the market.
For example, obscure books not found on any best-seller list can be difficult to track down. But several popular eCommerce sites report that a high percentage of their sales come from those less-well-known novels. Even though none of the individual titles alone drive a large percentage of sales, when taken together, the “less-demanded” sellers account for a big part of the profits. There is a very real demand for these hard-to-locate items; and consumers are learning that the Internet is the place to go to find them.
So the answer to not getting shut out by the big discount stores isn’t to try to go head-to-head with them. It’s to simply go around them. Don’t try selling products that your buyers can pick up at their nearest corner store. Sell in a product market where buyers are going to have to come online, in order to find a retail source.
One way to find a product market that you can compete in is to simply go beyond what the big box stores carry. Let’s say you want to sell juicers, but you can’t get the same wholesale prices as the superstores. So if you try to sell them at the same retail price as the superstore down the street, you’re actually going to lose money. BUT, you need to realize that SuperStore X doesn’t carry every kind of juicer known to man. There are probably dozens of manufacturers and hundreds, even thousands, of different juicer models. SuperStore X has to optimize their shelf space, so they may carry nine or ten different options. But that means that there are many, many other juicers that buyers might be interested in.
You may even specialize in a certain type of juicer – say, juicers designed to juice leafy greens, rather than fruits. You can further add value to your eBay store by offering other “living foods” products that will appeal to your target audience. Or you can provide, with every juicer, a book about the health benefits derived from juicing various leafy greens, or a pamphlet of juicing recipes. What you’re doing is giving shoppers a reason to come back to your store, and a reason to buy their leafy-greens juicer from you, rather than from the next juicer seller they find online.
A large number of eBay sellers who reported the highest growth last year were sellers who specialized in niche markets. There are several reasons why non-mainstream products tend to do very well on eBay:
Reason 1 First of all, the long-tail concept applies to online marketing. Stiff competition for “head” keywords (think of search terms like “MP3 players”, “designer clothes”, “DVD players”, etc.) has driven their pay-per-click prices higher and higher, and those clicks can add up in a hurry – especially when they don’t result in good conversion. As you move further down the product “tail”, keywords become much more reasonably-priced. And even though they may not generate as many click-throughs to your auctions as their higher-demand counterparts, the clicks that they do generate typically come from more targeted traffic – traffic looking for those specific items you’re offering (think of search terms like “Wilson Professional Tournament Feather Shuttlecock”, or “Denecke TS-3 Time Code Slate”).
Using long tail keywords works equally well for natural search results as well. With those off-the-beaten path keywords, you’ll find that you have much less competition to deal with. Few people are optimizing their sites around those words, so high search rankings are easier to achieve. And just like with paid advertisements, the traffic you bring in – while smaller in numbers – will be more targeted traffic, with an interest in your very specific product market.
eBay stores are already optimized for the search engines, so all you have to do is plug in the keywords you want to rank for. Make sure to use those keywords in your descriptions and your category and store listing titles, so you can appear in the search engine results and get exposure to the entire Internet community.
A second reason that you, as an eBay seller, can do well with “tail” products is that you’re not limited in the selection you can offer. Your sales venue is online, so for you, optimizing your shelf space is not a problem. You can use drop shipping to offer a very deep selection within your niche, as well as to test new niche products to add to your line-up, without risking any investment funds into inventory that might not sell.
This means that you can become the go-to place for your particular product niche, stocking your own personal best-sellers in your warehouse space (and getting better prices because you’re buying them in bulk quantities), and offering your slower-moving products through drop-shipping. This allows you to maximize your profits, while still ensuring that your target buyers can find the products they came to you looking for.
A third reason it’s easier for you, as an eBay seller, to sell “tail” products is that there are no geographic limits to your customer base. Even if your target audience is too spread-out to ever support a physical specialty store, those buyers can all have access to an online source of their niche products, and their combined business can be more than enough to support many online sellers.
There’s a huge amount of diversity in the products that people are looking for. Even within a niche market, there is a head and a tail – the products that are more popular with that niche audience, and the products that carry less demand.
For instance, classical music may fall within the “tail” of the music industry. But within that market, there are “head” products that are widely-known and extremely popular with classical music fans. But there is also a tail that trails down into lesser known classical works. And while they are less in-demand than other, more famous compositions, there’s still search activity on those narrowly-targeted markets, or “mini-tails”.
The key to finding the “tail”, or niche, market that’s right for your eBay business is to do your market research. eBay offers excellent tools to help you determine whether or not you can build a viable business around any given product niche. There are so many product markets that you can sell in that you may just need to pick a point to start your research. It’s fine to start by looking at a category that you like or know about, but if your research indicates that’s not a good market, you need to be prepared to consider other options that your research suggests you CAN sell very well.
There are many great workshops on the workshop board that cover multiple market research tools (free and paid) that you can gather the information you need from. Remember, when you use any market research tools, you will need to manually analyze your results to determine what the best selling strategy is, and how to produce the highest profits. You have to go beyond the general results and look at what the data means and what it’s telling you. Make sure the items match what you’re selling – for example if you’re selling a brand-new item, you don’t want to calculate the average selling price of new and used items.
Product supply is another factor you want to consider when looking at the market research results.
It’s important that you look at this research and follow what the numbers show you. Many sellers make the mistake of trying to convince buyers that they want or need a product, rather than just providing the products that buyers are already asking for. Don’t ever try to sell your buyer what you want or what you think they want – just give them what they say they want.
To summarize, consumers are interested in an absolutely enormous range of products – far beyond the common items available on the shelves of their local mega-marts. The more unusual or rare that a product of interest is, the more likely the shopper will have to come online to find it. So rather than trying to compete with the national chains stores by selling mainstream products, you can build a very successful eBay business in the smaller niche markets where the big box stores can’t reach.
As you can see, we've posted the workshop material a bit early. We'll spend the entire hour tomorrow (May 8th) responding to your questions and suggestions generated by the material.
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That's a great question. It's all in how you do your market research. You need to research what the demand and competition is for your product idea. There are many great workshops on how to conduct this research. If you search the community workshop board for "market research" , you will find quite a few. We're also looking up some links and we'll post them shortly for you.
Thx for holding this discussion. I read the intro and found it to be excellent. As you say, to compete with giants is very difficult, but finding your own little heaven, is the way to go.
I'm very interested in finding out how WorldWideBrands can help me in finding this perfect nitch. How do I go about it? Can I call the company and get all the info? What's the best way?
Thanks for the great comments. We pride ourselves in our premium education and sources. I recommend visiting www.WorldwideBrands.com You will find free education under Free Stuff and you can learn more there about the benefits we provide in our membership.
Once you figure out what niche product you want to sell, how do you source for the product? I figure it would be difficult to find a local source, would you search online instead? Also, do niche products take longer to sell, would they require to be listed more often because traffic is slower for such items?
Will you be having workshops etc. at eBay Live in Chicago that might be helpful to new sellers to help in developing a niche business? I'm already a member of Worldwide Brands and I think it is a wealth of info.
Product sourcing is exactly what it sounds like – it is sourcing products to sell through your eBay business. Most eBay sellers start out using local sources, like garage sales and thrift stores. But to truly build a successful online business and generate sustainable profits, you’re going to need find steady, renewable sources of products that you can sell again and again in your eBay store and auctions. That means you’re going to have to find genuine, legitimate manufacturers and factory-authorized wholesalers that are willing to work with you, as an eBay seller. Serious product sourcing is the process of locating and verifying those suppliers.
The search engine keywords “wholesale,” “wholesale products,” “drop shipping,” etc., attract a huge number of people who own or are starting home-based online businesses. That’s because people who are relatively new to eCommerce are not yet aware that these are hotspots for wholesale scammers and Middlemen. Many people have learned the hard way that the search engines are the wrong place to look for REAL wholesalers.
You can start by calling the manufacturer of a particular product and finding out who their authorized wholesalers are. But you will then need to call each one listed and make sure that they will allow online retailer accounts (specifically eBay sales). This process is time consuming. Another avenue is go to local tradeshows and source directly from suppliers at tradeshows.
Product Sourcing research is what WorldwideBrands.com does best. We have a full team dedicated to qualifying wholesalers to make sure that they are legitimate . Through our membership you have the ability to look up pre-qualified wholesalers. We also have a free newsletter in which we post tradeshows throughout the year that you can attend.
I've had several other workshops specifically on this topic that goes into more detail. I recommend typing in worldwidebrandsinc to the community workshop board search field and you can find them there.
From post 21: Also, do niche products take longer to sell, would they require to be listed more often because traffic is slower for such items?
There is no straight forward answer to this question. It depends purely on the demand and competition for a particular niche. Once you think you have found a niche after doing your market research, you can then find a supplier for that product idea. You can then use product sourcing methods like dropshipping to test that product in the market. If it's selling very well and quickly then you can move into ordering light bulk quantities from your supplier. This will allow you to have more control on how many listings you have and your customers overall experience.
Remember, A niche does not necessarily mean that a product is unique or custom. Let's take Baby Products as example. Baby products are common every where. You can find all sorts of baby clothes in big stores local in town. But can you find organic baby cloth diapers? Now you can expand out from that thought. What organic toys are available for babies? These are examples of niche product ideas that are not unique or custom but could possibly do well in a baby products niche.
Thank you very much for the compliments. We always like to hear from our customers. If you would be willing, you can send a testimonial to info@worldwidebrands.com.
We look forward to seeing you at eBayLive. Please make sure to come by and meet us in person before or after the sessions. We always like to meet our customers in person.
To summarize, consumers are interested in an absolutely enormous range of products – far beyond the common items available on the shelves of their local mega-marts. The more unusual or rare that a product of interest is, the more likely the shopper will have to come online to find it. So rather than trying to compete with the national chains stores by selling mainstream products, you can build a very successful eBay business in the smaller niche markets where the big box stores can’t reach.
If you do your research and follow what it shows you, then you can find the product niches where you have room to compete effectively on eBay. Any remaining questions from this workshop can be answered for by reading our free materials at www.WorldwideBrands.com , calling our toll-free Customer Service Line, or emailing our Customer Service Department. The contact information is on our site.
Our company, Worldwide Brands' full-time staff is dedicated to finding and qualifying the factory-authorized wholesale suppliers with whom you can use all the various methods of product sourcing. We also publish all the results of our years of Research in our members’ center. There is a Free Preview available if you’d like to explore what’s available within our wholesale database.
Thank you very much for being here today, and thanks to eBay for providing this Workshop so that we could talk, and help each other learn more about becoming successful eBay entrepreneurs!
Thanks for answering my question. With today's market and consumers holding back on spending, are consumers still looking for niche products? From your opinion is their is any category you can recommend that are more resilient during the recession.
Hi time-4-more, please visit our eBay Live 2008 disscussion board. Some of the members who post there will probably have some great suggestions for you.
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