EcommerceBytes-Update, Number 128 - October 10, 2004 - ISSN 1528-6703     3 of 8

Terapeak: Market Research for eBay Sellers

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New tools are promising to help eBay sellers research data to show them what categories are hot and how they can improve their selling practices to increase sales and average selling prices. AERS Inc.'s Terapeak is one of the eBay-sanctioned tools and offers two versions: Research Complete for $16.95/month, and Research Lite for $9.95/month (http://www.terapeak.com).

Terapeak licenses data from eBay through the "eBay Data Licensing Program" (http://developer.ebay.com/DevProgram/membership/data.asp). eBay controls what licensees can do with the data and how they can market the services. eBay also requires licensees to pay for the data and to give them a percentage of revenue when used for commercial purposes.

Terapeak chose to track 16 out of eBay's 32 categories. Anthony Sukow, CEO of AERS (Advanced Economic Research Systems Inc.), said he chose the categories that make up most of the revenue on eBay.

Here's a list of the categories tracked by Terapeak:

Books - 267
Business & Industrial - 12576
Cameras & Photo - 625
Clothing, Shoes & Accessories 11450
Collectibles - 1
Computers & Networking - 58058
Consumer Electronics - 293
DVDs & Movies - 11232
Entertainment Memorabilia - 45100
Everything Else - 99
Home & Garden - 11700
Jewelry & Watches - 281
Music - 11233
Sporting Goods - 382
Sports Mem, Cards & Fan Shop - 64482
Toys & Hobbies - 220

I took a look at some of Terapeak's features. Some of this may be hard to understand without seeing the actual tool in action. I've tried to keep it simple, but if you have questions, visit the discussion forum at http://www.auctionbytes.com/forum/phpBB/viewtopic.php?t=11831 and I'll invite Terapeak to answer your questions.

What's Hot on eBay
You can use Terapeak to see top-performing categories. The day I checked, "Computers & Networking" was the top-selling category.

You can check the "Hot List" to see which categories are Super Hot, Very Hot, and Hot. I was surprised to see " Sporting Goods > Triathlon > Bike" was a "Super Hot" category.

How does Terapeak define "hot"? I looked in the help file, and didn't see that topic listed. But when I typed in "hot list" in the search box in the help section, it came back with a detailed explanation:

"The Hot List is based on a few different factors.

Every Hot category must have over $25,000 in revenue for the past 30 days.

Each Hot Category must have at least 700 bids in the past 30 days.

A category's hotness is found by adding the bids up for the past 30 days. Then the bids are added for the one day less than the current day's past 30 days. Once these 2 totals are found they are used to develop a bid growth. If the bid growth exceeds the listing growth by 35% the category is Super Hot, if it is between 15-35% the category is Very Hot otherwise the category is just Hot."

It went on to explain how users can use the information:

"By using the Hot List you can see which is the hottest categories. These categories have a higher demand then supply and therefore are a great place to place auctions."

Browse Categories
I decided to do two kinds of data searching using Terapeak: Browse Categories and Search Listings. First, I browsed the Longaberger basket category. Longaberger baskets are pretty designer baskets popular with the home-decorating set and are highly collectible.

From the Terapeak homepage, I clicked on Browse Categories and drilled down as follows:

Collectibles-->Decorative Collectibles-->Longaberger-->Baskets -->2003-Now

Then I changed the view from September 17, 2004, which is currently the default view, to the month of September to get more data and therefore a better average view of the category. I learned that for the month, the number-one seller listed 145 items, giving it 2.59% market share. I also learned the number-one seller had a 62.07% sell-through rate.

The highest-priced item that month went for $1,775, and the lowest-price item went for 50 cents. Most of the listings were "bid auctions" (91.12%) with a 57.73% sell-through rate. eBay Store items made up only 1.93% of the listings and achieved only a 38.12% sell-through rate.

A list of features shows what percentage of listings used each feature along with the sell-through rate. For example, 0.12% of the listings used the Highlight feature, and of those, 81.82% sold.

With all data, a few unusual items can skew the results, so I retrieved the two prior month's data for both Bold and Highlight features to see if 81.82% was a typical result for using the Highlight feature. The results are shown below:

-Bold Feature-
Jul: 63.16%
Aug: 76.05%
Sep: 71.28%

-Highlight Feature-
Jul: 57.14%
Aug: Highlight 60.00%
Sep: Highlight 81.82%

I then compared this with the average sell-through rate for each month for bid auction type of listings:

-Sell-through Rate-
Jul: 64.38%
Aug: 64.37%
Sep: 57.73%

So while the Highlight feature did well for auctions in September, giving those auctions an 82% sell-through instead of the average 58% sell-through rate, it didn't raise sell-through rates higher than the overall average rates in the previous months. (Of course, if those items didn't use the Highlight feature in those months, the sell-through rates may have been even lower. But my guess is even using Highlight on an unpopular item isn't going to help much.)

Experienced sellers of Longaberger baskets could no doubt add context to help them understand the results of the data and their implications.

Some of the other data available on this page included:
- "Key Ratios" (like bids per listing, bids per seller, revenue per seller);
- a bar chart of "price buckets" to quickly see what price range the majority of successful auctions fell into);
- usage and success rate by listing duration;
- usage success rate by hour of day;
- and average ending price by hour of day.

Search Listings
I went back to the home page and typed in Longaberger baskets in the search box and hit "Search Listings." This brought back one-day's results. I could see how to search for up to 7 days, but not for a whole month's snapshot.

I stayed at the Results page for one day: auctions ending September 17, 2004. The highest-price item went for $733.05, and the lowest-price item went for 99 cents. At the bottom of the page was a list of all the auctions that ended that day, and I could click on each one to review more details. (The list included items that did not sell.) But first I clicked on "End Price" to sort by price. After a few moments, the list came back sorted by price, and there was the highest-priced item at the top of the list:

"Large Lot of Retired Longaberger Baskets!" that sold for $733.05.

This was an "aha" moment, reminding me that "average selling price" can be a deceptive statistic. This was not one basket that sold for $733.05; instead, it was a lot of over 40 items.

The Results page also contained "Top 5 Resulting Categories" and indicated what percentage of successfully closed listings came from each of the top categories. For example, 15.52% of successful listings were listed in the "Collectibles - Decorative Collectibles - Longaberger - Baskets - 1995-99" category.

Some of the other data available on this page included:
- "Search Totals, Ratios & Feature Efficiency";
- usage and sell-through rates by features like bold and highlight;
- a "price buckets" chart;
- and usage and success rate by listing duration.

Summary
Looking at statistics is inherently tricky, and with eBay data, it can be a minefield. Seasonal variations, keyword spamming, phantom items are some of the factors that can affect or even pollute the data. It's up to users to be aware of the pitfalls and use data as just one component of their decision-making process.

According to Terapeak's Andrew Sukow, the version of Terapeak I reviewed is only a taste of what's to come. Sukow explained that Version 2 will be available on November 9, and has an easier-to-use interface.

eBay does not allow data licensees to include raw numbers in the Category data, so Terapeak includes ratios only. This makes it impossible to see how many items are listed in a category. Totals would enable sellers to make better-informed decisions. It's uncertain whether eBay will relax these restrictions in the future.

I look forward to hearing users share their experiences using market-research tools and techniques, and I'll continue to keep an eye on new developments.

Discuss Terapeak and other market research tools and techniques at http://www.auctionbytes.com/forum/phpBB/viewtopic.php?t=11831


About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.


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