There is one very common theme in a lot of the emails I get from people who have lost money on eBay, and that is – a lack of research!
I’m honestly sometimes just shocked that someone would invest their hard earned money in an idea or product without properly researching it beforehand.
I mean, why!? I can’t think of one good reason not to research the product and niche you want to build a business around.
Of course you’ll never know for sure that the product you’re planning to sell is going to be a success and market research doesn’t give you a definite yes or no answer (if only business was that easy!) but nowadays with the internet and the wealth of information we have access to, it’s simply crazy not to do proper market research BEFORE you decide on a product and start sourcing it.
Market research is something that’s covered in great detail in my best selling home study eBay course – Easy Auction Business, and I also have a number of in depth market research guides on this very blog, all of which you can find using the archive section (simply click START HERE at the top of this page).
- How Are Some Items Sold on eBay So Cheaply?
- How To Find 100 Products to Sell on eBay in Just 30 Minutes!
- Best Products to Sell on eBay for 2016 EXPOSED!
- eBay vs Amazon Price War – 50 Products Tested!
- Which Colour/Style/Size Sells BEST on eBay?
- Does SIZE Really Matter?
- Terapeak + Alibaba: The All-in-One Sourcing Tool?
- TOP 100 Best Selling Products on eBay for 2015!
- How to do Post-Holiday Terapeak Research?
- Terapeak 2.0 is AWESOME! (My Review)
But if you take a quick look through those guides, you’ll notice that they mainly focus on using Terapeak, and for a good reason – I think it is the no.1 tool for any eBay seller and it makes market research incredibly quick, easy, and accurate.
Now there is a cost involved, either £24.95 a month if you opt for monthly billing, or £199.68 for a full year’s use, which is equivalent to £16.64 a month.
In my mind that’s a bargain, considering the features, ease of use and convenience of Terapeak and I simply wouldn’t consider selling on eBay without it.
However, I do understand that for some people it doesn’t matter if it’s incredible value for money, the fee is just too much and they simply can’t afford it.
So does that mean that you shouldn’t do any market research and just go with your gut?
No, of course not!
You can still do in-depth market research manually, and in today’s post I’m going to show you exactly how it’s done.
But before we really get into it, there is one thing you need to bear in mind:
Market research involves a lot of numbers and calculations, so you will need to do some counting, adding up, multiplying etc… I suggest you get a calculator basically!
So after that warning and without any further ado, let’s get to it!
For our manual research we won’t be using any other tools or services as though there are some free ones out there, they’re useless and simply not even worth trying.
Instead we’ll be using eBay itself, and specifically the Advanced Search tool.
I’m often shocked to find out that a lot of people don’t even know about this tool, although in fairness it is fairly well hidden:
Using this advanced search, we can research and get data for past eBay listings, and it offers a variety of options and settings for us to use.
For example, in our research we’ll be filtering for completed and sold listings – as we want to get real data from actual sales that have taken place on eBay.
And just like I recommend doing when using Terapeak, we’ll be doing our research based on the last 30 days (one month).
There are 6 main categories/pieces of data that we want to research:
- Total sales
- Sell-through rate
- Average price
- Sellers per day
- Sales per seller
- Competitor research
And we’re going to cover the step by step process for getting each of these, starting with total sales!
Total sales, as the name suggests, simply tells us how much in total a product makes in sales in one month.
In order to find this out, you need to search for a product and filter for SOLD listings – plus I would also suggest selecting NEW items only filter, to make your results more accurate.
Now in my example, searching for a “2l waterproof bag”, I get 102 results.
Next I need to go through these listings one by one and add up the sales amount to get a total figure.
Now in this case there are variations for the product, such as 10 litre and 30 litre sizes, so I need to ignore those and add up all the sales for the product I’m researching – the 2L bag.
So I simply work through all the results like this, adding them up as I go.
Before you start complaining, yes that’s what you need to do! It’s called manual research for a reason and it is a very tedious and time consuming task… which is why I personally always use Terapeak.
In this case I only have 102 results to go through, but it can sometimes be much more, so here are a few tips to make the process a little easier:
- Use the additional keyword filters
After you enter your keyword(s) to search for, there are additional options to the right, such as:
- All words, any order
- Any words, any order
- Exact words, exact order
- Exact words, any order
So each one is pretty self-explanatory and obviously selecting exact words, exact order is going to get you a lot less results than any words, any order. I personally actually suggest using the other two – all words, any order and exact words, any order. You can use the exact words option if you’re getting too many irrelevant results from another product type that has one of the same keywords.
- Use categories
Unfortunately with eBay’s advanced search you can’t specify the exact category you want to search in, but just the broader category levels – but this can still be useful to narrow down your search results.
If you have hundreds and hundreds of listings to go through, adding up all the sales can just be too time consuming, but you still need at least a rough idea of how many sales are made in a month.
So here’s what you can do – add up the sales for a smaller time period, say 3 or 5 days and the use that date to get an estimate for the whole month.
Step 1 – Add up all the sales data for your chosen period, 5 days for example.
Step 2 – Divide your total sales by the number of days you researched and then times it by 30.
That may sound a bit complicated but it’s not at all! I’ll quickly show you how to do it so you can simply copy me if need be.
Let’s say I’ve gone through 5 days of research and the total sales are £350. I take that number and divide it by 5 to get the sales per day > £350/5 = £70. I then take the sales per day and times it by 30 to get a monthly estimate > £70 x 30 days = £2,100.
Pretty simple, right? Good, let’s move on to the next market data we need…
If you don’t already know, the sell-through rate basically refers to the percentage of listings for that product that end in a sale.
So if there are one hundred listings on eBay and all have at least one sale, that will mean a sell-through rate of 100%.
In order to count this manually, you need to search for completed listings rather than sold.
And this time you’ll notice that some of the results are black and some are green:
Green means a sale was made and black means it ended unsold.
So sort your results by end date: recent first and then count the total number of UNIQUE listings in the last month (very important – don’t count the same listing multiple times!).
Next you count the number of listings that ended with a sale. You can either do this by counting the green listings or to make it easier you can just count the black listings and then minus that number from the total.
And you’re now ready to work out the sell-through rate!
Here’s how it’s done:
You take the number of listings that ended with a sale, divide that by the total number of listings, and then times your answer by 100%.
So for example, from my 138 results for the 2l waterproof bag, there were 98 unique listings and 54 of them ended with a sale.
54/98 x 100% = 55% sell-through rate
Once again, very simple!
Let’s move on to the next piece of data we need:
The average price is incredibly quick and easy to work out, because you’ve already done all of the hard work!
You just need to take the total sales and divide that by the number of listings.
So if the total sales for the month was £9,000 and there were 300 listings, that gives an average price of:
£9000/300 = £30
Sellers Per Day
To get an idea of how many other sellers you’ll be competing with should you decide to sell this product, you need to find the number of sellers per day.
And you do this by searching for your keyword(s), filtering for completed listings and once again sorting your results by end date: recent first.
Then all you need to do is count the number of unique sellers per day. But to get an accurate a result as possible, I suggest adding up the number of sellers for 7 separate days and then getting an average.
So if my results are: 20, 18, 27, 17, 18, 19, 16… then my sellers per day would be:
(20 + 18 + 27 + 17 + 18 + 19 + 16) / 7 = 19.3 so 19 sellers per day.
Sales Per Seller
Next we want to find out how much money each seller is making a month in sales. So we take our total sales figure (for the whole month) and divide that by our number of sellers.
So if the total sales for one month is £18,000 and we have 19 sellers per day, that gives a sales per seller of:
£18000 / 19 = £947
Of course this only shows an average and it could be that a few sellers are dominating the market and making the majority of sales between them, but most of the time this number gives you a pretty good indication of the “normal” turnover for this product/niche.
That brings us nicely on to the last part of our manual research:
In my mind one of the most effective forms of market research is to take a close look at one of the top sellers on eBay for a product and see what else they’re selling.
Let’s say I’m researching a certain product – I’ll use our old favourite the lens mug for this, and I came across a seller who has sold a lot, such as this one:
I can then take that seller’s username and use it in an advanced search. So on the left hand side, instead of find items, I’ll click “By seller” and then enter the seller’s user ID and hit search!
And what do I get? A nice list of the best selling items from that seller!
691 sold, 689 sold, 5922 sold!, 802 sold, 983 sold and so on!
This is really priceless data and it works incredibly well when you want to find related products in a certain niche or if you want to evaluate the overall potential of a niche.
And there you have it… I’ve shown you step by step how to find the 6 pieces of market research data that you need – all without needing any tools or software – in fact, without having to spend a single penny!
It does go without saying that this method takes a lot of time though, which is why I strongly suggest you use Terapeak if you can. Considering how much time and effort you’ll save, especially if you need to research multiple products, it really is a no brainer.
And it’s not as if you have to sign up for a whole year, not at all! In fact I often recommend only signing up when you’re ready to start your market research as that way you can easily get it all done within a month so the total cost to you will be just £24.95 if you cancel in time.
Well that’s pretty much it for today!
I hope you’ve found this guide useful and as always, if you have any questions or comments then please leave them below and I’ll get back to you within 24 hours, Monday to Friday.
Otherwise, until next time!
All the best,