What Can Last Year's Auctions Tell Us About Today's?
By Steve Myers
Our lives follow yearly patterns. It's February, coming
up on Valentine's Day. It's approaching "tax time." We intuitively
sense it's time to start getting ready to procrastinate filing
our taxes. These things are as seasonal as birds flying south
as the weather gets colder. Like a flock of geese, 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. As tax
time approaches, we may pick up the latest tax software.
Around Valentine's Day, we may need to pick up a gift for
someone we care about. However, we might not think about
how many computers consumers purchase this 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'll take a look at Godiva Chocolates, a favorite Valentine's
Day gift. By the way, if my wife is reading this... Hint!
Get in Their Heads
In selling, you'll hear about a concept called "mindset
got to get into the heads of your customers. Dig a bit to
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,
then justify it with facts."
Not convinced that our purchases are more influenced by
emotion than logic? Ask someone who owns a Mercedes Benz
why they bought the car. You'll hear all about the superior
German engineering, safety features, and other perfectly
sound reasons they bought it. Phooey!
Why did they really buy it? Maybe it's a blast
to drive. Maybe they like the prestige of the car. Maybe
they just like how they feel driving it. When they took the
car for a test drive and decided to spend twice what they'd
spend on a less prestigious car, do you really believe for
one minute that engineering was on their mind?
For the sake of our economy, thank goodness people buy what
they want and typically not just what they need. Whole industries
would collapse if they did. Here's a list of just a few products
that prove we buy what we want, not what we need:
- Perfume - Do we really smell that bad?
- iPod Music Devices - What's wrong with the radio?
- Junk Food - Does anyone really believe it's good for
- Cruise Trips - There are quicker ways to get from point
A to point B (though my wife tries to argue these are indeed
a necessity from time to time)
you're looking for good items to sell, it's key to understand
what your buyers want. The time of year is one factor which
influences what they want to buy.
Let's go back to the Godiva Chocolate example. Many who
buy chocolates as Valentine's Day approaches do so for a
spouse, lover, or loved one. But seeing advertisements on
television for these decadent treats may prompt some to buy
for themselves. The approaching holiday didn't influence
them so much as the advertising around the time of year.
You have to think beyond the obvious to better understand
What Sells When
The three charts below illustrate one-week-long snapshots
describing listings on eBay for Godiva Chocolates in the
weeks around Valentine's Day. As you take a look at each,
let's focus on two things:
- Listing Success Rate (how likely are you to sell this
item on eBay)
- Average Selling Price
Figure 1 - Godiva Chocolates sales on eBay February
Figure 2 - Godiva Chocolates sales on eBay February
Figure 3 - Godiva Chocolates sales on eBay February
So what did we discover? We find that the Listing Success
Rate fell from 76% the week of February 1-7 to a low a week
after Valentine's Day of 33%. Wow, what a difference a couple
of weeks can make.
What else did we find? We saw how during the week where
you had the worst chance of selling chocolates, you would
actually sell them for more! Prices climbed from a low of
$28.20 to a high of $43.00. Here's where you have to get
in the mind of not only the buyer, but the seller to see
The Buyer's Mindset
Who are likely buyers of chocolates? With auctions closing
a week before the holiday, some last-minute shoppers might
purchase Godiva chocolates as a gift. As a guy myself, I
can attest that procrastination is the rule here.
The Seller's Mindset
The seller has completely different drives during the weeks
around Valentine's Day. They may be thinking they will have
less competition after the holiday, so they can get more.
It appears that indeed a lot fewer chocolates were sold the
week after the holiday (9) than the weeks leading up to it
(up to 143).
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 Godiva chocolates as we approach the holiday
season. Those wanting to give them 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 the week before Valentine's Day.
Why Do They Buy?
That makes sense. From a buyer's perspective, the chocolates can still arrive in time for
gift giving. The lowest price during this period was the
week of February 8-14, when it's too late to buy chocolates
before the holiday. From the buyer's perspective, the desire
for them tapers off, so the price drops as the urgency
to purchase them decreases.
What's Behind Seller Pricing?
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
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 Godiva chocolates,
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. And worse yet, with perishables like chocolates, if they don't sell right away, they are no longer fresh. You may never be able to sell them in that case.
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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