Cracking the Code: Increasing Your eBay Profits!
By Jen Cano, HammerTap Market Research Expert
Have you ever tried to guess the right combination to unlock a triple-combination lock? Imagine a triple-digit briefcase lock, for example. How long would it take you to crack the code? An hour maybe? Not too bad—but that’s just three numbers. With three numbers there are only 1,000 possible combinations.
Now imagine if there were millions of possibilities. Would you still try to crack the code, or would you just randomly start guessing?
Unless our briefcase was full of money, it probably wouldn’t matter too much if we didn’t figure out the combination. But when we post our eBay listings we’re also trying to find that perfect combination, and if we don’t “crack the code” for our eBay listings we’re losing out on profits.
Unfortunately, eBay listings are a little more complicated than our triple-combination briefcase lock. To find all of the possible combinations for our eBay listings we would have to multiply all the possible closing days, times possible auction types, times listing features, times categories, time products, times styles and brands… and you get the picture. There are millions of combinations! And yet, we’re looking for the perfect one that will “unlock” the buyer who is willing to pay the very highest price for each item we sell.
Trial and error does work eventually, and I’m sure that those of you who have been selling a product for a while could teach us a few things about how to sell your item. But if you want to learn from the competition’s experience, and you want to learn quickly, you need eBay market research!
eBay market research helps you crack the code.
Measures of eBay Success
As we try to figure out the best auction features for our product, it’s important to understand that when a product goes to market, its position is determined by several factors, two of the most important being sales volume and profit margin. The same holds true for eBay listings.
Often an eBay seller will create a strategy based on one of two areas: either the number of successful auctions, or increasing profits, both of which are solid goals. Great eBay sellers however, understand that positive movement in both these areas is essential to generating the highest overall profit.
The diagram below helps us visualize and understand that the best product placement is where both volume and profit margin are the highest. In other words, we always want our product to be in the top right corner of the diagram.
Figure 1: Profit Margin vs. Volume Sales
As with any other business, it is important to understand that each sale on eBay places your business somewhere on this diagram. The difficulty then is trying to understand which auction factors and features move your auctions to the top right corner of this grid.
Finding the answer to this problem with only trial and error can be compared to cracking the code on our briefcase by slowly and systematically trying different combinations—it is possible to find the combination, but it’s also very difficult.
However, market research makes it much easier to find that perfect combination because it allows us to quickly learn from the mistakes and triumphs of our competitors. Let’s take a look at some actual market research for a couple of eBay listings. We’ll use a football and volleyball I have sitting in my garage.
But before we actually look at the market research, I’d like you to make some guesses about ways to sell each item.
First, let’s imagine that I need to make sure my items sell quickly. I’m leaving on vacation and don’t have time to hang around waiting for a sale. What’s the best starting day for my auctions? And does starting day really matter?
Second, let’s imagine another scenario where I’ve got all the time in the world, and I just want to make sure I make the most money possible off my two items. What is the best starting day now? Again, could that really make a difference?
While you’re guessing, I’d like you to pay attention to how confident you are when you decide which days are the best in each scenario. Remember, without auction research, you’re guessing all the time.
Now, let’s see what the research has to say. We can find the answers to our questions in the Findings report within our HammerTap search. Let’s look at the football data first.
Figure 2: Football Start Day
Here we can see that if I am mostly concerned with successfully closing the sale (LSR stands for Listing Success Rate) it might be in my best interest to start my auction on Friday. However, if I am more interested in getting the highest possible sales price (ASP stands for Average Sales Price) for my football I might want to start my auction on Tuesday.
What about my volleyball? Again, let’s look at the research and see what we can find.
Figure 3: Volleyball Start Day
With my volleyball, if I’m primarily looking to have a more successful sale (or have a higher LSR), it is in my best interest to start my auction on Tuesday. However, if I am concerned about getting the highest possible sales price (ASP) for my volleyball I want to start this auction on a Wednesday.
Let’s sum up our findings.
1. Best start day for auction success = Friday
2. Best start day for high sales price = Tuesday
1. Best start day for auction success = Tuesday
2. Best start day for high sales price = Wednesday
When you made your guesses earlier, were you right?
And remember when I asked you to pay attention to how confident you were in your guesses? Well, notice how much our confidence level in our choices goes up now that we’re basing our decisions on factual data, not trial and error or lucky guesswork.
After we’ve looked at which day would be best to start my auction on for each of my two goals individually, I’m ready to look at the data a little deeper and make a much more important decision. Up to this point, I have been asking you to decide between two strategies: a better chance of selling or a higher price. Now, we’re going to try to maximize them both.
So now we’re asking, “On which day should I start my auction if I want to have the highest possible chance of a successful auction and at the same time maximize the final sales price?” Remember the chart we posted earlier?
Figure 4: Profit Margin vs. Volume Sales
In other words, which starting day will move me towards the top right of our graph?
Once again, we’ll find the answer in the Findings report of my HammerTap search. This time we’ll look at the third column, which combines the listing success rate and average sales price, for the best overall day to start the different auctions for both my football and volleyball.
Figure 6: Volleyball Overall Start Day
For my volleyball, we can see that Tuesday is the day that will give me the best chance of selling and the highest average sales price.
Would you have thought there would be such a difference between two balls from my garage?
It’s important to remember here that these differences exist with every product listed on eBay, and they change relative to every possible auction feature.
Again, let’s think about the “code” we needed to crack. Today, we used data research to quickly discover one digit of our code—auction start date. Although the process was quick and easy, we’ll need to continue with a few other features (end date, title keywords, starting price, listing enhancements, etc.) to completely reveal the entire code to higher eBay profits.
Once the process is complete we can sell with the confidence that comes from knowing that guesswork has been eliminated and that our decisions are, instead, based on actual data.
I hope that today’s discussion has helped you realize how many decisions go into just one listing. It can be somewhat overwhelming when you truly understand how much you really are leaving up to chance. But hopefully you now see how quick and easy quality research tools, like HammerTap, can make it as they provide you with vital information that can help you discover the best time of day to start your auction, the best starting price, the most profitable categories and title words, and much more.
Over the next few weeks you’ll receive other articles that will explain how you can use HammerTap to truly “crack the code” on your eBay listings. We’ll talk specifically about how to find the best ending day, how to choose winning title keywords, how to set the starting price that will help inspire a bidding frenzy, how to know which listing enhancements are worth the extra fees and much more, all so that you can “unlock” those profits waiting for you!