Finding a Niche

Big Fish in a Small Pond

"Each category is like a little pond where you can be a big fish," says Mary Margaret Gibson, 61, president of Mirrors and Light Gallery (eBay User ID: maam1945), based in The Colony, Texas. Mirrors and Light specializes in unique, artist-made kaleidoscopes and jewelry. "Our plan was to have more and better kaleidoscopes than anybody else out there," says Gibson. "There aren't many who sell kaleidoscopes on a regu-lar basis [on eBay]," or in the volume that Mirrors and Light does. At any particular time, the company typically has 100 or so kaleidoscopes available through eBay for hobbyists, collectors and fans, ranging in price from $700 to $3,500.

Because its products are much more expensive than typical eBay merchandise, Mirrors and Light has worked hard to develop a level of trust with buyers, especially the 30 percent of its customer base that is overseas. Gibson knows that overseas customers may be wary of sending several hundred dollars to an unknown seller in another part of the world. To address any reservations, Gibson went so far as to write a book, The Kaleidoscope Collector's Guide. She also communicates frequently with the company's core audience about its artists and products.

Gibson explains that the kaleidoscopes being sold are either from private collections, self-representing artists, or a family or broker selling off an estate. And in some cases, Gibson acts as broker, helping research and evaluate individual pieces, and selling kaleidoscopes on eBay for individuals unfamiliar with them.

Starting from scratch in 2004, Mirrors and Light expects to hit sales of just under $150,000 in 2006 from its online sales of kaleidoscopes and new jewelry.

No Limits
Interestingly, choosing a narrowly defined niche does not prevent those outside your core customer group from buying from you, say Jennifer Basye Sander and Peter Sander, co-authors of Niche and Grow Rich. Rather, as a niche seller, you will have an easier time establishing yourself as the source for a particular type of product and still attract new buyers. For instance, if your niche is vintage Hermès scarves, your products will be presented to buyers who search for that exact phrase as well as to buyers simply looking for "scarves," "vintage" or "Hermès." Creating a niche doesn't limit opportunities; in fact, it often results in more business. You won't limit your buyers, and specializing in a particular product category will frequently make you a preferred seller to your target customers.

Scratch That Niche
To zero in on a niche that's not only profitable, but also fits your interests and background, check out these ebay tools.

The eBay "Hot List": A report provided by eBay and accessible from the "Sell" area of the site, the "Hot List" (http://pages.ebay.com/sellercentral/whatshot.html) identifies categories with the greatest increase in listings over a certain time period. Because people list more often in a category when demand is increasing, it's a useful gauge of demand, says John Bodine, product manager for eBay Market-place Research.

eBay Pulse: For a quick look at what buyers are searching for, eBay Pulse lists the top 10 search terms on the site (http://pulse.ebay.com). If you subscribe to eBay Marketplace Research, you can see the top 20 terms.

Keyword Search: Anyone can use this simple tool to search for types of products and see how many are already listed--essentially, how much competition there is. Search completed listings to determine the typical selling price of an item. Most important, say eBay sellers and experts alike, is finding a niche you love.

Gold Mine or Land Mine?
If you think you've found a winner, ebay marketplace research can give you the following information to help you determine whether your proposed niche will make you rich.

Size of The Opportunity: Using eBay Marketplace Research, you can search by product category to find the average selling price of products you're interested in. Then you can check the number of items sold in that same category. Multiply the average selling price by the number of items sold, and divide by the number of months reported (either two or three, depending on your subscription level), and you have the approximate size of the sales opportunity per month, explains Nick Donelson, product manager for eBay Marketplace Research.

Trends: You Ultimately want to enter a category with increasing demand and a rising average selling price, says Donelson. You can use eBay Marketplace Research to chart category performance by day or by week and to spot upticks in demand and price.

Sales Forecasting: To determine how long it takes for a type of product to sell, look up average selling price and success rate. This will give you a ballpark idea of how long it will take to sell something. For instance, if 200 listings for McDonald's memorabilia ended and 100 items sold, you can infer that 50 percent of the listings in this category are completed. Based on that information, you can opt to drop your price to sell your product faster, or you can expect to have to list your goods twice for them to sell, says Donelson.

The cost to subscribe to eBay Marketplace Research varies according to the term length, which ranges from two days to a month. A Fast Pass provides two days of access for $2.99 and up to 60 days of historical sales information. The Basic level costs $9.99 per month for 60 days' worth of data, and the Pro level costs $24.99 per month but provides up to 90 days of historical data and detailed information to help optimize your listings.

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Marcia Layton Turner's work has appeared in Woman's day, Health and Black Enterprise. She is based in Pittsford, N.Y.

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