Why Research Is Important

You should never launch an eBay businessor any business, for that matterwithout doing your homework first. You might think you have a great idea for an eBay business, but you won't know for sure until you do some research. When you start poking your nose around the eBay community, you'll get a much better idea of which types of items are good sellers, and which aren't. In short, you use this preliminary research to help you determine your business modelthat is, the type of eBay business that you want to run.

To determine your eBay business model, you should research a variety of different product categories on eBay. It's as simple as looking up the historical sales for specific items (by model number) or for entire product categories. There are several questions you want answered, including

• How many items of this type are listed each week, on average?

• What is the sell-through percentagethat is, the percent of all auctions that end with successful bids?

• What is the average final selling price?

• Are sales of this product increasing or decreasing over time?

For example, I discovered that during the month of June, 2006, there were 3,185 listings for Nikon Coolpix digital cameras on eBay. Almost half (44%) of those auctions closed successfully, at an average selling price of $167.97a fairly hot category.

In contrast, during the same month there were 834 auctions for men's golf jackets. Of these auctions a third (32%) closed successfully, at an average selling price of just $20.16a less-exciting category, by all measurements. If I had to choose between these two products to sell, I'd be a lot more interested in those digital cameras than I would the golf jackets.

How did I get this information? Read on and discover the many ways to research prior sales on eBay.