The Value Of Niches On Ebay - By Philip Weslow

So why are niches so important? REASON ONE, less competition! Let’s say that you are selling the latest and greatest MP3 player on eBay. Let’s also say that there are 200 other auctions for some variation of the model of MP3 player you are selling. How do you know that even if a given person is searching for the particular model that you are selling that your auction listing will get seen?

Let me start by asking you this, how many of this item are you selling at once? I will give you an oversimplified example. Let’s say that there are only two sellers selling your particular item. You yourself have one auction listing posted on eBay and your competition has 15 listings posted. As I understand eBay’s current polices, eBay limits you to 15 identical listings at once. So I would say that the chances are 15 out of 16 that any given potential buyer will find your competition’s listing before yours.

So what’s the answer? Should you go out and buy 15 MP3 players and list them all at once so that you can compete? Unless you already have experience selling that model and have a listing written up which you know works, and based on your experience, you feel comfortable that you will make a profit with that listing given the current supply and demand for the particular product, then I would suggest you might want to shy away from being in a hurry to do 15 listings at once.

If you are testing the waters and are not sure how much profit, if any, you will be able to get selling XYZ model of MP3 player, then why would you hurry to sell 15 at once? If none of your listings sell you might be facing having to pay for 15 listing fees and no sales. That would mean you would take a loss on each and every listing. I would suggest that you test the waters and find an item and listing description combination that you know earns you a profit.

Should I pay for listing upgrades so that my auction gets featured? Once again if you are going to experiment with listing upgrades then I would start small. I would suggest you try experiment slowly with each possible factor. I would not suggest that you “go all out” and get a bunch of upgrades and sell 15 items at once if you are just starting out. If you do pay for extra upgrades and none of your items sell then you will be stuck paying the listing fees on 15 separate items, only this time your cost per listing will be higher then the previous example because of the extra cost involved with the upgrades.

Don’t get my wrong, you may well find out that you sell more units if you opt for a certain combination of upgrades. What I am saying is that you should carefully examine the cost and return of each and every upgrade that you decide to invest in. You should conduct your own “cost benefit analysis” and treat the fees that you might pay as “investments.” This is your business we are talking about so you are the one who is ultimately responsible for its success or failure.

This is one of the great things about niches, if you can find an item that people want (has demand) and that has very few other people selling your item (competition) then you might well have a money maker on your hands. Why, you might ask? Because if people want your item then you should not have too much problems finding interested buyers, and if you are one of the few people who are able to get your hands on this item in order to turn around and sell it on eBay, then you have found a way to limit competition. You would have found a “barrier to entry,” and that’s a good thing.

Clearly there are a lot of ways to profit on eBay. That much is clear since there are a great many people who make their full time living using eBay. What I am saying is that you should start small, analyze cost and benefit, and grow a business that works for you.

Best Wishes for your success on eBay.

-Philip Weslow

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