03-02-2007 01:10 PM
It is much easier for the small seller to find a niche market that is not dominated by large competitors. I always get emails from eBay sellers who want to sell the latest digital cameras, DVD players, stereo equipment, and computers or they want to know the secret source for Gucci handbags or Under Armor T-shirts. Selling brand name products is a very difficult business to enter. You will often see advertisements for wholesale lists and so-called drop ship companies who claim to have the source for Nike shoes, Sony cameras, Hitachi Plasma TVs, Prada handbags and shoes and so on. Believe me, these companies do not sell directly to small sellers like you and me. They only deal with their own stores or large national distribution chains that can buy and sell in large quantities.
In the early days of eBay, the site was predominately used to sell collectibles including sports cards, comics, toys and Beanie Babies. As eBay expanded more expensive collectibles and antiques began to be sold. Within a very short time consumer goods started showing up. At first most of these were used or overstock items and "As Seen on TV" items. During the first two years almost every eBay seller was essentially working in a narrow product area or a niche.
What denotes a niche market? A category is not a niche. For example, if you sell all kinds of toys, you are a toy vendor. If, however, you only sell children's wood toys, then that is a niche. It used to be if you sold only digital cameras that would be considered a niche, but today the digital camera market on eBay is so large that you would have to sell only one brand of cameras, such as Nikon, to be considered a niche in the camera market.
There are two primary benefits of niche marketing -- Sourcing and Selling
Let's look at sourcing first. The more time you spend in a market or product category you will learn all the sources of supply for that market. The more you know about a product the better you will be able to buy it. Also, the sources will get to know you. If you continue to buy from a small number of sources they will start to see you as a valued customer.
When you decide to specialize in a niche of any kind the first thing you want to do is become expert in that area. Learn and read everything you can about it. Study the history of the product. Get to know the companies that manufacturer the product and their distributors. The more you know the better you will be able to buy.
The other benefit of niche marketing is selling. The very fact that you are selling in a narrow market segment means you will have less competition and therefore you can command higher margins. Also, people prefer to buy from someone who is knowledgeable. A friend of mine is one of the largest and most well-known sellers of antique toys on eBay. People seek him out for his knowledge and his integrity. Everyone knows that when he describes a toy in one of his auctions, the description is accurate, he doesn't sell fakes or reproductions and he will stand behind everything he sells.
I get lots of questions from eBay buyers. If you are selling something and you get a question, as an expert or a specialist you will be able to answer the question with authority and detail that will give the bidder instant confidence and more than likely result in a bid.
The other selling advantage of niche marketing is the ability to accurately describe products in your auction descriptions. The added knowledge you have from being a specialist allows you to add more data and "insider" information that someone else can not. A potential bidder looking at your auction will have more confidence and perhaps bid more liberally than otherwise.
Finding your niche is a matter of research and brainstorming. You may already have a hobby, interest or life and work experience in an area that would make a good sales niche on eBay. This is where you should start. Work is always more fun and usually more profitable if you are doing something you like.
Read Chapters 3, 4 and 5 of Three Weeks to eBay Profits for niche market ideas and how to research them. So what are some of your ideas for a niche market? Have you seen any really unique niches markets on eBay and wondered how those people got started? To see a good example of a niche market, just pick any category on eBay and start looking at all of the sub-categories. Here is an example: Category Collectibles > Advertising > Coffee & Tea > Starbucks. See if you can find some other interesting categories.
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