EcommerceBytes-NewsFlash, Number 1467 - February 05, 2007     4 of 4

Five Things to Learn from Your eBay Competition (Vendor Monday)

By Michelle Waldorf

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In today's AuctionBytes "Vendor Monday" column, eSeller Street Founder Michelle Waldorf reviews ways that eBay sellers can analyze their competition to improve their own businesses. Each week, runs an article submitted by a vendor or marketplace in the online-auction industry about a topic helpful to online sellers. Story submissions are welcome by emailing the editor.

Buyers perform a side-by-side comparison of your product listings to those offered by other eBay sellers. Subtle differences in sales technique make a big difference in a buyer's decision.

Fortunately, it's easy to do your own comparison and to adjust based on your findings. Learn by example using eBay seller research and use your imagination to "try on" their business. Borrow ideas from their strengths, find opportunity in their weaknesses.

First, stay true to your goals. Picture what you want from your eBay business. Identify the workload can you manage and the amount of money you want to risk in inventory. Do you want a multi-employee enterprise, a one person show, or a part-time hobby for supplemental income?

Next, look closely at your eBay competition. Choose any eBay seller that catches your attention and use a licensed eBay research service to get a complete sales report on the seller.

Give the seller a grade (A, B, C, D or F) based on your criteria of a good eBay business. For example, if your goal is to have a 1 person, high profit, low volume business, then a liquidation business that sells 3000 items per week at $1.60 would get an F grade from you. The same liquidator may get an A grade from another person with different goals. Grade based on the following:

1. What they sell and how much
Determine if the seller is a niche specialist or an odds-n-ends seller such as a liquidator or auction drop off store. Specialists usually command the best prices because they are highly experienced with their type of buyers. About 50% of PowerSellers are specialists.

Look at their total sales and the number of items sold. This indicates how much inventory they carry, the amount of cash invested and the workload required to operate this business. Divide their monthly item quantity by 22 to see how many packages they ship each weekday. Listing and shipping 60 packages a day is a full time job for 1 or more people. Will this level of sales at your profit margin be enough to meet your income goals?

2. Average end prices and success rates
If the seller has better prices and success rate than their product's market average, you know this is a very skilled seller and the one to study! Buyers value this seller above other sellers.

Are their sales limited by buyer demand or by their inventory supply? If their success rate is > 65%, they are inventory limited - they could sell more if they had more inventory. If their success rate < 50%, then they are demand limited - they have more inventory than buyers. Match your level of inventory to the reality of the eBay market or you could be stuck with dead stock.

Now study their sales techniques and decisions.

3. Pricing and listing format
Take a look at their listing format, durations, and weekday performance. For example, if a major seller never ends auctions on Saturdays, it may be an opportunity for you even though conventional wisdom says not to end on Saturdays.

Review the seller's closed listings to determine if they use the Buy It Now option and if buyers actually use it. BIN on auctions is good for capturing both auction and fixed price buyers. You can raise the buyer's expectations by setting the BIN price above the market average price.

I lean toward creating higher prices by setting higher than average start prices and offering a high level of customer service, such as a refund policy. It's a price-maker approach rather than a passive price-taker position. It's a positive sign to find a competitor that consistently sells above the market average. You can be sure that buyers in that market value service oriented sellers and are willing to spend more to deal with them.

4. Titles
Even experienced sellers can be surprised. I'm a Silver PowerSeller of women's suits of 2 years. When I researched a highly successful seller in my market, I noticed they used both "New" and "NWT" (New with Tags) in their listing titles. I was only using "NWT".

Buyers searching for "New suit" will see the competitor's listings but not mine. I had eliminated my listings from a common search! Based on that insight, I've now added "New" to my titles so my listings are included in both searches, which potentially doubles my traffic.

5. Listing Description
This is the value proposition to the buyer. It is a marketing concept that clearly states a need that will be fulfilled or an emotion the buyer will feel with this product. It goes beyond the description of the physical product. Top sellers will use wording, pictures and templates to convey the product's value.

If the seller has above average sales results, then buyers of this product are influenced by value propositions. Some products are commodities whose end prices cannot be influenced by marketing. Items such as books, electronics and mass produced toys are commodity markets.

Finally, reinforce the unique and successful aspects of your eBay business while incorporating the "best practices" of other sellers into your sales strategy. Keep tabs on the competition by researching monthly.
Michelle Waldorf is the Founder of eSeller Street, provider of pay-as-you-go eBay Market Research, and an active Silver PowerSeller. eSeller Street helps eBay sellers improve their sales through seller and product sales research. Sellers use research on other sellers,, to learn the best sales strategies without trial and error. Ninety days of licensed eBay US statistics is available now, and eBay UK is soon to be released. For more information, visit

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