4
Researching Products and Pricing
It’s impressive just how many buyers and sellers trade on eBay. Remember that there are 179 million active eBay buyers! What’s truly glorious is that you can connect with these eager spenders while typing in your robe and bathroom slippers. (Shh. It’s our little secret.) What’s equally amazing is the extraordinary transparency to be discovered in the data available on eBay from pricing to sales lead time to reviews and ratings. All those sold and unsold items tell a clear story of what works and what doesn’t.
Price research is one of the best ways to research products before you list and a primary indicator of a product’s appeal on eBay. If you have talent with research and organizing things, then price research comes naturally. Please enjoy the information, but don’t allow yourself to be ruled by it. A rare military button from the Civil War will have a less predictable value than last year’s Reeboks.
Studying pricing involves greater understanding than just the information displayed on the screen. It also means being pragmatic, practical, and patient. Commodities can be priced using eBay search data or tools such as Terapeak, which is complimentary with an eBay store subscription.
Items that occur on eBay infrequently require more study. As incredible as it may sound, there are “eBay rarities.” One of my customers was gloating because he scored an exceptional deal on a Loetz vase that I sold him. It was apparently worth many times what I charged for it. I didn’t realize it was Loetz and listed it as a nice “antique” vase. A few quick pictures posted up on eBay’s discussion boards at the eBay Community (which you can access using the QR code included below in Figure 4–1) would have revealed the true value of the piece. I stumbled upon the buyer’s blog entirely by accident, where he was not only bragging about the low price he paid, but was using my picture on the blog. He had even asked me to offer a discount on the sale, which I had foolishly agreed to. I was clueless of the vase’s high value. The gall of that guy!
FIGURE 4–1: The eBay Community
But the pendulum swings in both directions. I have also realized incredibly high prices for items that I felt were essentially overpriced. The auction-style listing format is ideal for generating the excitement and competition needed to raise prices to lofty levels. When you’re scratching your head about value, your instincts are probably saying, “Use an auction.”
In this chapter, we’ll be looking closely at how to research items and how to decide on the ideal price. We’ll also see how you can start to develop a knack for discovering opportunity in price research.
How in the world do you sift through all those eBay listings and settle on the value of what you’re selling? Would you believe that eBay used to post the actual number of listings on their homepage? I remember when it was less than 800,000.
eBay uses a proprietary search program called Best Match that determines the default way that eBay presents listings. Best Match may present what eBay interprets as relevant to you, but you might want a different way to dive into this pool of products.
When you conduct an eBay search, Best Match is the default view—the way that eBay first displays the search results to you. You can sort by time ending soonest, newly listed, lowest price, highest price, or nearest to you. A plethora of filters allow viewing by format, condition, item specifics, distance, whether or not sold, and a multitude of other ways. In estimating value, sellers are generally interested in viewing completed, sold listings sorted by highest price. The search results page offers optional filters to bring clearer meaning to the sold item data.
In order to fully understand search, you need to comprehend listing best practices. Become a master of eBay’s search tools so that you’re optimizing your own listings for maximum buyer visibility. Add robust information and complete the item specifics on eBay’s item to catalyze a more favorable position when eBay uses their Best Match protocol.
Item specifics are fields within the eBay listing form where you enter data that goes beyond the title and description. Item specifics vary by item category. Some information within item specifics may be prefilled. The eBay site also stores and recalls data from their catalog for certain categories, and the use of the catalog data is mandatory on some products. eBay knows that some things sell better when consistent information about those items is shown to buyers. eBay allows users to find merchandise by browsing and typing in keywords, but also by searching for a product using a part number or a Global Trade Item Number (GTIN), such as the Universal Product Code (UPC), International Article Number (also known as European Article Number or EAN), or International Standard Book Number (ISBN).
When a product has a unique identifier such as these, sellers may be required to list those items from the eBay catalog database—the online library of details and images for products in a wide range of categories. This requirement benefits everyone because it streamlines the buyer experience and provides sellers with timesaving stock photos, item titles, thorough product descriptions, and pre-filled item specifics. Here’s a further explanation of these identification numbers:
▶ Manufacturer’s part number (MPN). An identifier of a specific part design used to provide a pinpoint reference to that part that is unique to the manufacturer. Examples include products such as vehicle parts, hand tools, heating and air conditioner system replacement parts, and many millions of other products across thousands of industries. Because an MPN is only unique to the manufacturer and that same number may be used by other manufacturers, buyers will use the MPN in a search along with the brand name, e.g., “Acme 6789.” If the MPN is truly unique, the product can be found by searching for just the MPN.
▶ Universal Product Code (UPC). A barcode system used in the U.S. and Canada, as well as some other countries, for tracking merchandise in stores. The package or product hangtag has the UPC barcode and the UPC number printed on it.
▶ International Article Number, also known as the European Article Number (EAN). In the world of retail sales, the UPC and EAN are the two primary barcode formats used on products. The EAN is used virtually everywhere that UPC is not used.
▶ International Standard Book Number (ISBN). Every published book is assigned an ISBN number. The ISBN identifies a book’s edition and publisher. A modern book will usually have either a UPC or EAN as well as an ISBN number.
eBay integrates the Terapeak research tool into the Seller Hub, allowing access to years of real-world sales data. The tool allows searches by keyword(s), MPN, UPC, EAN or ISBN. I’ll discuss the use of the Seller Hub in-depth in Chapter 7. Researching items by a unique identifier greatly increases accuracy.
I’ve noticed some sellers embellishing their item titles and descriptions with spammy keywords that they use as clickbait to attract more eyeballs on their listings. This can confuse people and may simply be counterintuitive. I believe the practice reduces buyer trust and hurts sales. It also makes product research more challenging because unrelated items will pop up. When conducting research, consider the quality of the sellers’ work with titles, product images, shipping and handling practices, etc. A listing with misspelled or too few keywords, poorly-lit and out-of-focus images, and excessive shipping charges does not serve as a good comparison because you won’t be making those rookie mistakes.
Let’s practice searching for products. Using the simple search phrase “Blacklist Blu-ray” will return the results of all listings with Blacklist and Blu-ray in the title in any order—and in the description if you selected the option for eBay to search the item description. See Figure 4–2 on page 61 for the results of this search. There are filter options just above and to the left of the search results. The filters are dynamic and change depending on the category of merchandise in the results page. A common mistake is to add too many keywords into the search, making it less likely to discover what you want. Start with few keywords and embellish more words as you refine and reduce the number of results. Making the search very specific provides a more digestible list of results as well.
FIGURE 4–2: The Search Results Page for the Keywords “Blacklist Blu-ray”
Include the model number in searches when the product has one. For example, type “Samsung RF28HDEDBSR” vs. “Samsung refrigerator.” The model number narrows things down. For a unique model number like that, you won’t need to enter the brand name.
Use these additional tricks to improve your searches:
▶ As a seller, you’ll want to see what sold, so limit your searches to the sold items option, which is available on the left side of the search results (you’ll probably have to scroll far).
▶ Drill down to the condition you want, new or used, to cut down the clutter in your search.
▶ Filter your results to view only auctions if you’re sourcing product on eBay to resell back on eBay or if you’d like to evaluate if auction-style listings generate a better price for what you’re selling.
▶ Try using the price range feature (to weed out low price accessories or high-value wholesale lots that match your search terms).
▶ Filter by category to see items only in a specific category. The exception to this would be when you’re hunting for seller mistakes and want to discover those misplaced bargain items.
Once you master the basics of the search engine, you will save lots of time and effort searching for products, whether for purchase or for research. Though the search engine can be used effectively with this knowledge alone, there are some additional searching tricks that are available to you.
If you’re a techie or just want to act like one, try the Boolean search operators; these are cool ways to search using simple tricks that expand the power of your eBay search capabilities. Remember that eBay searches are not case sensitive. Let’s walk through a few ways you can use Boolean operators to maximize your search capabilities on eBay.
Placing a minus sign in front of any word acts as the NOT operator, which means that the word is excluded. The search “–faux pearl necklace” will omit the results with the word “faux” and only return pearl necklaces.
Placing parentheses around a group of words acts as an OR operator. The search “sterling (pin,brooch,necklace,pendant) –gold” will return all listings that have the word “sterling” and any of the words in the parentheses, but not the word “gold” since I excluded it.
You can place the minus sign in front of the parentheses search to tell eBay to look for listings that do not including a group of words, like this: “–(platinum,gold).” A search keyed in this way “necklace –(platinum,gold) will return a list of necklaces that are not made from platinum or gold. In another example, you’d key in “sweater –(polyester,wool)” to find sweaters that don’t contain polyester or wool.
Adding quotes around a set of words changes the search quite a bit. Placing quotes like this: “floor mat” will search only the words in that sequence. This may be critical when you’re searching a person’s name, “Marilyn Monroe,” or a make and model, “Samsung Galaxy”. All of the above examples will return massive search results, which you’ll need to cut down even further with filters.
An asterisk is the way to search wildcards. A wildcard search is a magical tool that will expand your search. When you use an asterisk after the beginning of a word, the eBay search engine will automatically complete the word without regard to spelling or other factors. For example, I’m fond of fossil sharks teeth, and the eBay community hasn’t quite fully mastered the spelling of megalodon, the largest of the extinct shark species. Listings with misspellings tend to fetch lower prices. Try this search …
meg* (shark,sharks,shark’s) –replica
… which will find the misspelled examples and will weed out replicas. The meg* means that the search results will locate any word starting with “meg” will be included along with “shark” OR “sharks” OR “shark’s,” not including any listing that has the word “replica” in the title.
While Booleans are not absolutely vital to use, it is clear that they can give you superpowers in certain scenarios. Search engine knowledge alone, however, will not carry you to eBay riches; let’s talk briefly about sourcing your products. In Chapter 10, I’ll dive deeper into product sourcing, however product and price research go hand-in-hand with three product sourcing concepts: drop-shipping, retail arbitrage, and eBay arbitrage.
▶ Searching for Sales Timing and Trends
You can use your searching skills to investigate timing trends that can help you best position your own items. For example, you will want to avoid listing on a day that will result in your auction-style listings ending on a holiday, even if that day is a Sunday. Festive moments are very distracting. Check the holiday calendar and use common sense.
Just for curiosity, I looked up a particular style of popular Samsonite luggage (check out Figure 4–3) and looked at the sales trends across an entire year. Sales for luggage clearly spiked to their highest figures just before the Thanksgiving holiday. I would imagine July would not be the best month to list winter outerwear unless you are selling to customers in Reyk]avík, Iceland where summer’s high temperature rarely rises above 55 degrees Fahrenheit.
Start to think about ways to profit from the results of your eBay research. As you explore what’s listed, you can examine the opportunities that are available from drop-ship vendors as well as local retailers—even eBay itself.
Drop-Shipping: The Pros and Cons
Two common subjects that I discuss with my readers and social media followers relate to buying for resale and drop-shipping, a supply method in which you don’t hold physical inventory, but transfer orders to the wholesaler or supplier, who then ships the products directly to the customer. eBay refers to drop-shipping as product sourcing. The manner in which you perform pricing research will be different when you operate a drop-shipping business. Please keep in mind: “There’s a sucker born every minute” is an aphorism that simply doesn’t hold water. Access to smartphones and computers gives us all superpowers. We can research pricing instantly. We can find out virtually anything anywhere we are.
Drop-shipping sounds awesome: Someone else buys high-demand, high-quality brand-name goods and delivers them directly to your customer. Like rubbing Aladdin’s lamp, it’s a dream come true. The trouble is that everyone else is trying to do the same thing. And the drop-shipper has already incorporated a tidy profit for their own company in the price tag. Don’t forget to factor in eBay’s and PayPal’s fees. By the time all is said and done, there may be little or nothing left for you.
My advice is to test and explore before spending a lot of time listing someone else’s inventory. Be sure it makes financial sense, and do your homework. Before investing time (and eBay fees) into listing items for drop-shipping, be certain that your drop-ship partner hasn’t oversaturated eBay by working with too many sellers. When this occurs, it typically results in a race to the bottom.
Don’t confuse the very challenging business of drop-shipping with the very lucrative world of consignment. I am skeptical about the former and very fond of the latter. In no way am I saying that drop-shipping profits are as rare as a unicorn. I’m asking you to be careful about tall tales and wild claims. Drop-shipping opportunities are so well-advertised, you’ll need to apply your expert eBay research skills to determine if a particular offer is worth pursuing. Few are, in my view.
warning
eBay permits drop-shipping so long as the product is shipped from a wholesale supplier. You are always responsible for the safe, timely delivery of the items you sell on eBay even if you drop-ship them. Listing an item on eBay and then buying the item from another retailer or website that ships directly to your customer is not allowed on eBay.
Before you become seduced by the YouTube dude standing in front of his red Ferrari offering to allow you to enter his “circle of special friends” by granting you access to his special “system,” please run the other direction when you’re asked for a credit card number. Hard work beats systems. Knowledge also beats systems. Knowledge is abundant, and there is no system in the world that will motivate you to work hard and do your homework, which isn’t going to cost you anything. While you’re busy studying someone’s expensive system, your competition is busy taking photos, writing descriptions, packing and shipping, and counting dollars. I tried drop-shipping, and it didn’t turn a profit for me. Consider consignment instead. eBay buyers aren’t just buying on eBay. We all shop at different places, at different times. I’m skeptical about there being a huge amount of buyer loyalty out there. Customers want it faster, cheaper, in perfect condition, and with free shipping. There are always opportunities to make money.
As you research products and their prices on eBay, start to think of ways to profit from retail and eBay arbitrage. Retail arbitrage is a technique used by eBay sellers who buy high-demand sale and clearance merchandise from local retail stores or their online sites (where purchases can be delivered to the local store) and then sell those products on eBay for a profit—after accounting for eBay fees plus packing and shipping costs. Retail arbitrage isn’t brain surgery. Anyone can engage in successful arbitrage with a bit of practice. Visit local retailers with your phone at-the-ready to conduct price research. Look for deals on the websites of retailers that offer free shipping to their local store. I love Atkins bars and buy them from Walmart online. Today, you can buy a box of Atkins Endulge brownies at Walmart for $5.48, and a box of the same brownies sold on eBay with free shipping for $15.59.
I ran the term “Endulge™ brownies” through a 12-month search on Terapeak, a price research tool offered at no cost to eBay Store subscribers. Here are some statistics I found:
▶ 56 sellers
▶ $4,697.34 in total sales
▶ 493 boxes sold
▶ $9.53 average selling price
▶ 88.99 percent of the sales offered free shipping
Perhaps there’s a new business opportunity for me trading in Atkins products!
Many eBay sellers make serious listing mistakes. The magnitude of these selling errors is so huge that skilled researchers buy products on eBay to resell back on eBay. This is referred to as eBay arbitrage. This is another way to leverage your skill as an eBay researcher and fill your pockets with cash! In my experience, only a very small number of people bother to try their hand at eBay arbitrage. It’s a simple process, but not necessarily easy. If it were easy, everyone would be making money doing it. Arbitrage requires skill. You’ll have to study and practice to get great at it. Finding seller mistakes can be highly profitable. Here are some ways to source deals on eBay:
▶ Become an expert in a handful of product categories so that you’re quick to recognize a deal when you see it.
▶ Look for commonly misspelled keywords. If a buyer can’t find it, the item won’t sell (so many sellers don’t bother to use spell check).
▶ Look for abbreviations. Many sellers shorten or abbreviate because they run out of space in the title.
▶ Look for missing important keywords in titles. (Can you believe sellers forget to mention even simple things like what it is they’re selling?)
▶ Look for listings with horrible images (most buyers gloss over them).
Once you’ve found a deal and it looks like you’ve scored a home run, make your move and buy it! Be sure the total price including shipping is still going to turn a profit.
I’ll discuss how to list your eBay items in the next chapter; however, I’d like to bring focus on the research that you’ve been conducting and my recommendations moving forward. Pinpointing product value takes experience, time, and patience. The success of your research will grow as you become better at using the search techniques that I’ve discussed here.
Unless you like to gamble with your money (and maybe you do), don’t start auction-style listings at a penny or 99¢. Those days are over. With so much inventory on eBay, it’s possible you may only receive a single bid on an item. Hot products will spark bidding. Even still, skip the reserve and start your bidding at a reasonable price based on your research. Along that line of thinking, it is unwise to consider auctions with very low starting prices as meaningful to your research. As you spend time exploring eBay, start to notice products on eBay and in local retail stores that you can use to profit from arbitrage.
In the next chapter, I’ll address the limitations of selling on eBay, selecting the appropriate listing format and placement, understanding and avoiding common issues, staying in compliance with eBay’s marketplace rules, and ensuring your listings are well-presented for maximum impact.