The eBay Research You Should Be Doing as a Seller
Even with the reams and reams of articles and books written about online selling out there, the business often mystifies sellers—particularly sellers that are just starting out or sellers with small or medium-sized operations.
It can seem like e-commerce is a kind of black magic, or that it's fundamentally unpredictable, a win-or-lose game not unlike a visit to a casino's blackjack table.
Most of the time, this feeling exists because the tutorial and how-to information about online selling doesn't emphasize the importance of research for online selling businesses nearly enough—or because when it does, it doesn't tell sellers exactly what they need to be researching, and what they're supposed to be learning as a result.
If reading this far has you nodding your head in agreement, then the list below is for you. Here are five fundamental kinds of research that are essential to eBay selling—why it's done, what it's supposed to tell you in each case, how the most successful sellers go about doing it, and what some of the possible consequences of not doing it are in each case.
Pricing research is the most fundamental kind of research, and most sellers—even casual ones—do it in one way or another. Pricing research is about looking at completed eBay listings, RedLaser, Terapeak, and/or other sources of pricing information to see how much you'll likely be able to get for a product on eBay.
For sophisticated sellers, pricing research can actually become rather involved—it's useful to know how price varies by season, by day of the week and time of day, by product condition and options, by geography, and so on—particularly when arbitrage is a part of the equation. Sellers that fail to do pricing research often expect more than an item is worth from a listing or sell their item far more cheaply than they needed to given what consumers are willing to pay.
Sourcing research goes hand-in-hand with pricing research if you're a frequent or professional seller, as a part of the process by which you decide what to sell. While pricing research can tell you what a product you're interested in might be worth on eBay, sourcing research tells you what sorts of products you can actually get your hands on, where, and at what prices.
Smart sellers are constantly looking for new and better ways to get their hands on potentially profitable products, at prices that offer a good margin, and with stability and volume that make it a pleasure, rather than a hassle, to sell a particular kind of good. They do this by actively searching for and pursuing manufacturers, wholesalers, and retailers and by building relationships with them.
Experienced sellers also spend a great deal of time doing competitor research, making sure that they understand who's already competing with them for sales, what advantages and disadvantages these competitors have, and who may be entering or exiting a product space on eBay.
After all, you're not just selling in a vacuum—your sales aren't only about what you sell, how you list, or the prices that you set; they're also about what your competitors are selling, how they list, and what prices they set.
Competitor research can also involve looking at completed and active eBay listings for the kinds of products that you sell, but it also goes farther than this. Those with the strongest competitor research skills monitor brands and feedback profiles, selling activities on other channels, and other similar kinds of data, and they tend to use marketplace research services like Terapeak as well.
There is a constant battle for bids and purchases on eBay. If you don't know what your competitors are doing, it's you may be completely missing the reasons for sales increases and declines, or missing out on new opportunities and trends that could have learned about by observing competitors and their sales activity.
Listing Practices and Keyword Research
The best sellers are also constantly looking for ways to improve their search placement and buyers' willingness to buy from them once their listings are seen.
Far beyond simple listing troubleshooting, this kind of research is about being proactive with your listings by looking at the listings made by others and by constantly trying to imagine new and better ways to present products. It can also involve the use of tools like eBay's listing analytics to help you to better measure how each individual listing is performing, and whether it's persuasive to shoppers.
Keyword research is a part of this, and can help buyers to find and understand your listings more quickly and clearly, but it also involves thinking about the ways in which you present photos and item descriptions, the ways in which you talk about item conditions, the ways in which you time your listings, and the listing upgrades that you use to promote your listings.
Strategic and Market Research
E-commerce doesn't stand still, and neither does traditional retail, for that matter. The tastes of the buying public change. New products and new kinds of products enter the marketplace. New sellers enter a product area and begin to compete with you, driving prices downward and drying up opportunities—even as new opportunities emerge for those that are looking for them.
This kind of research ties the previously outlined kinds of research together in the search for new opportunities, new things to sell, and new buyers to target, often in new ways. It's related to trend hunting though it's not exactly the same thing; a new opportunity often about new ways to list products or time product listings, about new variations on or bundles of existing products, or about new venues and markets in which to sell products.
It doesn't have to be about adding entirely new kinds of products to your selling, or new channels to the list of places where you sell—though it can be these things as well. Great strategic researchers are constantly on the lookout for rising prices or increased demand in a variety of product areas, for the particular features or variations of a product that consumers seem willing to pay a premium for, for keywords that consumers are searching for, and for products related to these things.
They rely not just on listings and their own sales and intuition, but also on hard data: what pricing trends look like over time, what actual searches are taking place on eBay, what new items or features competitors are offering, and what's going on on social media, in the news, and in social life amongst consumers in general. The lucky ones don't just follow trends, but in fact appear to create them—by seeing, thanks to sound research, changes in consumer interests and habits or unaddressed consumer needs before others do.
Many sellers fail to do this important kind of research, with disastrous results—the end of a business or worse. What does it mean to research your own business operations? It means to have a clear, dollars-and-cents understanding of how your products, listings, strategies, and sales are performing over time.
What products are making you money? What products are losing you money? What listing practices are generating sales? Which ones seem to fall flat? What are your top keywords? What are your top months? Which products incur how much overhead, or result in how many returns or defective transactions? Are these numbers trending upward or downward over time? Can they be tied to specific business decisions you've made or changes in your selling practices?
Even the simplest kinds of pricing research don't tell you much unless you also know what your costs are and what kinds of margins you can afford. Does it make sense for you to sell a particular product at a 20 percent markup if you have identified a source and your pricing research tells you that you can get it?
You can't possibly know unless you also study the operation of your own business in enough detail to tell you whether, after a 20 percent markup and the actual expenses involved in selling the product and running your business, you're in the red or the black overall.
For periodic sellers, this may not be a big deal—but anyone that's hoping to make an income or a living selling online will quickly find that without a clear, ongoing understanding of business operations, it's easy to be blindsided by unexpected losses when everything otherwise seems fine—and that it's not a question of whether this will happen or not, but when it will eventually happen.
Meticulous records, sound business sense, and attention to detail are key here. Accounting services can also help, as can sellers tools like Terapeak's MySales. This is part of "growing up" as a business, and different sellers have different strategies here—some use piles and piles of spreadsheets, others do it all online, and still, others file stacks of paper away in stacks of folders, tabulating them periodically.
The point is to do it—if you're serious about having made a profit once all is said and done, or about continuing to do so over the long haul.
Research, Research, Research
Much is made of doing data-driven selling, of selling globally, taking advantage of arbitrage, being careful to run your selling operation like a business, opening multiple channels, and so on—but what this all means in practice is getting a handle on the fundamental kinds of research outlined above.
For some sellers—those that are more creatively- and community-oriented, for example, this can sound overwhelming. The tools, however, are out there. Between the many kinds of web services listed here, eBay's own tools, and those offered by prominent third parties like Terapeak that specialize in helping eBay sellers, it's easier than it's ever been to do the kinds of regular research necessary to perform (and feel) like a sound, profitable business, rather than like a seller struggling to grope along through the eBay darkness.
If you're not doing these things, it's time to bite the bullet and start—today is as good a day as any other, and the sooner you begin, the sooner you'll reap the rewards.