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Don't Get Burned by "Hot Lists"

By Sean Eyring, eBay Certified Consultant


If you are looking for new products to sell to diversify your inventory, then Hot Lists are the perfect place to start. The keyword here is start, not end. 

Let me tell a story to illustrate my point. I have a friend who sells basically whatever he can get his hands on. After watching an eBay hot list for a few weeks, he took the plunge and bought 100 re-furbished iPod Shuffles.

Unfortunately, he wasn’t able to sell these for a profit. He lost money on every sale, and ended up getting rid of the remaining iPods with a lot sale to cut his losses.

What went wrong? He followed the hot list.

Basing a product sourcing decision strictly on a hot list is like playing with fire—you’re most likely going to get burned!

A Little Information on Hot Lists

Many hot lists are based on averages.  That means that some products will sell above the average while some will sell below the average.

If you have never used a hot list, eBay has several different kinds of hot lists that can be found at on their eBay Pulse page.

The eBay Pulse contains several lists showing popular searches, stores, products, and more. These lists are a great way for you see what's hot in the eBay marketplace.

You can perform a search based on eBay categories.  The various lists on the main eBay Pulse page provide an overview of the entire eBay marketplace. You can also use the drop-down menu at the top of the page to refine and filter the lists to show content for specific categories.

There are lists of popular searches found within the eBay Pulse. Based on the keywords and phrases that are actually being searched for, you can get an idea of what people are looking for across the eBay marketplace.

Popular products are listed based on the number of recent purchases of certain products.  Keep in mind though, that this list only contains products that were listed on eBay including product details from the eBay catalog.

There is also a list that shows items that are currently the most watched on eBay, according to the number of users who have selected the “Watch this Item” link on an eBay listing page.

You see what I am getting at? While the information is helpful, it is somewhat vague, and cannot be used solely to make successful product sourcing decisions.


Hot Lists: A Great Place to Start

I’m not saying to avoid hot lists. All I’m saying is to only use a hot list as a starting point, and not an ending point when you are looking for new products to sell.

My friend used a hot list as an ending point, and bought 100 re-furbished iPod’s. What he didn’t know is that re-furbished units were not hot. These were on the less than average side of the line and in the end he lost money.

Instead, use a hot list as a starting point.

For example, I went to the eBay Pulse and looked at the category Baby> Strollers> Jogging Strollers> Multiple (meaning strollers that hold more than one child at a time).

eBay Pulse provided me with the 10 most searched for keywords and phrases that related to his category, a list of eBay Stores that contained the largest numbers of active listings for this category, and several of the most watched items within this category.  From this information I began to make a list of some brand names that kept showing up.

Once you know this information, you can use HammerTap to find out if this category is hot for your business.


Reading Around the Average Line

Let me illustrate what I am talking about with some research.

Research Results for Baby> Strollers> Jogging Strollers> Multiple.  Copyright 2009, HammerTap.

 

In the results above you can see that the Baby> Strollers> Jogging Strollers> Multiple category selling at 46.5% of the time on average.

But how can we know which brands or types are above or below 46%? Two brands stood out to me, and you can see them in the figure below.

While Bob strollers sell 83.56% of the time (above the average), BabyTrend strollers sell 33.6% of the time (below the average).

If we would have simply gone off the hot list and purchased 100 BabyTrend strollers, we would have made a very bad assumption from a hot list.

 

Finding What’s Hot for Me

 

Let’s compare Bob and BabyTrend strollers in a little more detail. After all, just because Bob sells 83% of the time doesn’t mean that it is a hot product for you.

In this case, Bob sells more often (higher Listing Success Rate) and for a higher price (Average Sales Price) than Rhino.

Obviously Bob is the hotter product right?  On eBay, yes. But for you, not necessarily.

A product is only hot if you can make a profit on it and you can only find out if you can make a profit by knowing your actual costs to source the product.

Simply put, if your source for Bob strollers is charging you $400 each, then it’s not a hot product. On the other hand, if your source was charging $99 for BabyTrend strollers, than it would be a hot product—for you.

In order to really find out if something is hot, you need to know your cost to source the product.

It’s only after you compare the performance of the product to your actual sourcing costs that you can decide if a product is really hot for your business.


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