Last Year's Auctions Predict this Year's Success
By Steve Myers
Fall's back to school, cleaning the leaves out of the gutters,
getting ready for the holidays. We think little about these habits.
We just do them.
But maybe we don't think about how many of our buying patterns
also follow the seasons. Some of these seem obvious. When the kids
head back to school, we need pencils, paper, scissors, and glue.
However, we might not think about how many computers get purchased
that time of year.
Seasonal eBay Buying
Many products sold on eBay follow seasonal patterns. That's
why HammerTap Auction Research software gives results for last
year's auctions. It gives the data we need to predict patterns
in buying behavior based on the time of year.
We might think about how Christmas trees and decorations might
become more of a hot item as the holidays approach. But less obvious
products related to the season also show seasonal buying trends.
Take humidifiers, for example. In the winter months, the air gets
dryer in many places. It makes for rough skin. I'd also expect
lotions to get more popular during the winter months. With colder
weather, people open their windows less, so the air gets more stale.
Scented candles and oils may get more profitable in the winter.
Get in Their Heads
In selling, there's a concept called "mindset marketing." You've
got to get into the heads of your customers. Understand their wants,
needs, and fears and you'll find what makes them buy. And here's
another key to understanding those who buy your products: "People
buy based on emotion and justify it with facts."
They buy what
they want and typically not just what they need. So when you're
looking for good items to sell, it's key to understand what they
want. The time of year is one factor which influences what they
want to buy.
Let's go back to the humidifier example. I tried to go beyond
the obvious things people look for as the holidays approach. It
will surprise no one to find that Christmas decorations get more
profitable as the holidays approach. Since your competition will
see the obvious as easily as you do, reach a little further as
you look for seasonal products.
What Sells When
The four charts below illustrate one week long snapshots describing
listings on eBay for humidifiers in the weeks around the holidays.
As you take a look at each, let's focus on two things:
- Listing Success Rate (how likely are you to sell this item
- Average Selling Price
Figure 1 - Humidifier sales on eBay December 4 - 10
Figure 2 - Humidifier sales on eBay December 11 - 17
Figure 3 - Humidifier sales on eBay December 18 - 24
Figure 4 - Humidifier sales on eBay December 25 - 31
Understanding Your Customer's Mindset
So what did we discover? We find that the Listing Success Rate
climbed from 59% the week of December 4-10 to a peak two weeks
before Christmas. It then began to fall again, finally dropping
all the way back to 54.6%.
What else did we find? We saw how during the week where you had
the best chance to sell a humidifier on eBay (December 4-10), its
price dropped from an average $44.37 to $36.77. Here's where you
have to get in the mind of not only the buyer, but the seller to
The Buyer's Mindset
Who are likely buyers of humidifiers? With auctions closing
a week before the holidays, some last-minute shoppers might purchase
a humidifier as a gift. Maybe they anticipated company coming and
wanted a nice atmosphere for them.
The Seller's Mindset
The seller has completely different drives during the holiday
season. They may be thinking about making that last push to unload
their seasonal inventory before the holidays are over. So what
do you do when you want to dump things fast? You lower the price.
Where what the buyer wanted and what the seller desired converged
resulted in lower prices. Lower prices often drive more sales and
that's just what we see happen.
So how do you take advantage of this kind of knowledge? From a
buyer's standpoint, we may be able to predict a dip in the price
of humidifiers as we approach the holiday season. Those wanting
to give one as a gift know it takes a while to ship an item, so
the clock's ticking. The highest price during this period of time
was achieved on listings closing between December 4th and 10th.
Why Do They Buy?
That makes sense. From a buyer's perspective, there's still enough
time to have the product shipped to them in time for gift giving.
The lowest price during this period was the week of December 25-31,
when it's too late to buy a humidifier before the holidays. From
the buyer's perspective, the desire for humidifiers tapers off,
so the price drops as the urgency
to buy one decreases.
What's Behind Seller Pricing?
Again, let's get in the head of the seller. The week of December
25-31, holiday shopping is pretty much over. The seller may have
humidifiers in stock they have to unload quickly. They are willing
to take less. They may have lower start prices or Buy It Now prices.
When you understand the needs, wants and fears of both the buyers
and the sellers you can better understand why products fluctuate
in price and demand. But do you really have time to get in the
heads of your customers when you sell most products?
Actionable Real-World Knowledge
Auction research lets you make decisions based on predictable
trends. You may not even care about the "why" behind it. If you
find a source for inexpensive humidifiers, what you most need
to know is if you can consistently sell them at a profit.
Knowing last year's trends help you go beyond what's selling now.
It gives you the tools and knowledge to predict eBay buying patterns
over the coming weeks. You'll quickly determine when demand for
seasonal product will peak. You'll know when it may fall, helping
you better determine the right amount of inventory to buy so you're
not stuck with a garage full of product you can no longer sell.
Auction research gives you the power to determine future profits
based on past findings. It helps you avoid risk by anticipating
drops in demand for a product.
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