Auction eZine - Issue 14
________________________________________________ AuctionInsights Newsletter ________________________________________________ May 5, 2005 -=-=-=-=-=-=-=-=-=-=-=-=-=- Hi, Doug Feiring here from AuctionInsights You see them everywhere (even occasionally in this ezine), The 10 ten, super-hot, best-selling eBay lists. While these lists have their merits, Chris Malta, eBay Radio's Product Sourcing editor and publisher of the famed Drop Ship Source Directory, gives us some sage advice as to how the serious auction seller should approach these lists. Enjoy, Doug http://www.auctioninsights.info http://AuctionLink.to -=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=- NEW NEW NEW from AuctionInsights! ... Search thousands of wholesale suppliers with our new wholesale database. It's FREE!! Click -- http://www.auctioninsights.info/wholesale -=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=- o FEATURED ARTICLE... The Dangers of "Hottest Selling Product" Lists by Chris Malta You'd think the 'Hottest Selling' products on the Internet would be a good place to make money, right? Not necessarily! There are many places that publish lists of 'The Hottest Selling Products on the Internet'. They range from the big Internet Marketplaces like Yahoo and eBay, to smaller companies that sell software and ECommerce tools related to online selling.
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A 'Hottest Selling Products' list is a strange thing. It can be a good thing if used properly, but it can also be a bad thing if you're not very careful.
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You should approach these lists like you would approach a large, dangerous looking dog that you've never seen before. Do the right thing, and the dog just might sniff your hand and lie down at your feet. Make the wrong move, and you might end up missing a hand or a foot! The good thing about a 'Hottest Selling Products' list, when it comes from a reliable source like eBay, for example, is that it gives you a good picture of what really is selling well on eBay over a reasonable period of time. That's important information to have when you're selling online, whether you use eBay or not. There are two potentially bad things about it. The first potentially bad thing is that these lists are generated from very simple statistics. If a large number of a certain type of product is being advertised and/or sold in a certain marketplace, then that product gets on that marketplace's 'Hottest Selling Products' list. The problem is that the 'Hottest Selling Product' list does not take profit margins into account! A very good example of this situation is the Electronics market. Computers, DVD Players, Stereo equipment, etc. Electronics is, in my opinion, the absolute lousiest market to make money in on the Internet. For some reason that nobody really understands, almost everybody who first starts out in Internet Business wants to jump right in and start selling electronics! I'm not saying it can't be done, but it is very difficult. That market became flooded with competition years ago, which caused everyone to undercut everyone else's prices over and over again to stay in business, which left a very slim profit margin in Electronics that still prevails today. You have to really sell a lot of Electronics to make any real money, because the individual sale profits are so small. Yet, Electronics are almost always at the TOP of all the 'Hottest Selling Products' lists! Why? Simply because so many people starting out in ECommerce are advertising them and trying to sell them! The second potentially bad thing is that when these lists are published by a large Internet Marketplace like Yahoo Store or eBay, everybody sees them! That can be a bad thing, even if the product in question is a NEW product that just made the top of the list! Let's say, for example, that a new blockbuster adventure movie comes out in the theaters. The super-spy star of the movie, Dash Rimrock, constantly uses a brand new kind of palm-sized computer/video phone throughout the movie to save himself and many beautiful women from all kinds of dastardly and dangerous bad guys. The product is called the ViddyPuter, made by a company called VidTechie, and it looks really cool. Now, this is a real product, and most people don't realize that the manufacturer, VidTechie, paid the movie studio millions of dollars to feature that product in the movie constantly. It's a promotional tool that offsets production costs for the movie studio, and works very well for manufacturer. That's why you see all kinds of brand-name products prominently featured in movies; it's a very expensive form of product commercial. Suddenly this product becomes a market trend and everybody wants one, because everybody wants to be as cool as Dash Rimrock. That is exactly the result that VidTechie was hoping for when they paid the studio to feature the product in the movie. Pretty soon, the quickest of the market-savvy ECommerce Sellers are starting to sell the ViddyPuter on eBay. Before you know it, so many of them are out there that the ViddyPuter makes it to eBay's 'Hottest Selling Products' list. So, when you see the ViddyPuter suddenly appear on the 'Hottest Selling Products' list, should you immediately jump in, find a supplier for that product and try to sell it on eBay as well? Probably not. Why not? Because when the ViddyPuter hits that list, millions of people are going to see that at the same time you see it! Chances are that ViddyPuter market is very quickly going to become flooded with new Sellers, and then the price-slashing frenzy begins. Too much competition equals everybody trying to undercut everyone else's prices, which equals the ViddyPuter's profit margins bottoming out in a very short time after it hits the 'Hot List'. So, from a straightforward 'What Should I Sell' perspective, 'Hottest Selling Products" lists are not a good place to draw your inspiration from. However, there IS a way that you CAN make a 'Hottest Selling Products' list work for you, and the most successful sellers out there know what that is. The way to make that list work for you, and make money on the ViddyPuter frenzy, is to attack the product's Vertical Market. A Vertical Market is simply a group of products that are similar to, or closely associated with that product. For example, instead of trying to sell just the ViddyPuter all by itself, like so many others will try to do, put together and sell a 'Dash Rimrock Super Spy' kit. Include the ViddyPuter, because that product is what will get your listings noticed on eBay or in the Search Engines. However, you sell the ViddyPuter at just about cost, and don't expect to make money on it. The other products that you bundle into your Dash Rimrock Super Spy Kit are the ones you take your profit margin on. Your Kit could include a cool pair of compact Spy Binoculars, a Spy Pen that contains a portable computer hard drive (yes, they exist!), and a pair of Spy Sunglasses that have backward-looking mirrors built into the frame, so that the wearer can see behind them! The additional products in your Dash Rimrock Super Spy Kit are the ones you make money on, because when you add several products into a very unique bundled mix, no one can really compare your prices against other sellers' prices. You can build decent profit margins into the other products. What you're selling is completely unique, allows no opportunity for price-shopping, and is part of the Vertical Market of a very hot-selling product. Instead of being just another one of the tens of thousands of people that are trying to eek out a small profit in the super-competitive ViddyPuter frenzy created by the 'Hottest Selling Products' list, you become someone who really does make a good profit selling a unique 'bundled' set of products in a very hot Vertical Market. Sales, whether on the Internet or in a store in your local mall, is a creative art, folks. It's not just a case of 'Here it is, buy it!' You can apply the method above to just about any kind of product; you just have to avoid the Herd mentality, and think about it a little first. :o) Chris Malta Founder/CEO Worldwide Brands, Inc. -=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=- About the Author: Chris Malta is the Product Sourcing Editor for eBay Radio. He has worked with computer Systems for 18 years. He's been involved in eCommerce systems, networking and site design for more than 6 years. He's taught college-level computer courses in Western NY. He developed The Drop Ship Source Directory, and he and his partners at Worldwide Brands, Inc., publish the Directory and run eCommerce sites of their own using Drop Shipping as their only business method. Learn about the Drop Ship Source Directory -- http://www.myaffiliateprogram.com/u/worldwid/t.asp?id=1637 -=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=- NEW NEW NEW from AuctionInsights! ... Search thousands of wholesale suppliers with our new wholesale database. It's FREE!! Click -- http://www.auctioninsights.info/wholesale -=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-
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