“Which is the best niche for me to sell in and what is the most profitable product to sell in that niche for my eBay business strategy?”
This is a question that pops up daily in my inbox and quite frankly it is guaranteed to get my eyes rolling and my blood pressure soaring! Why? Well because it is akin to the ‘million-dollar question’.
It’s like me asking you..
- ‘What’s the perfect food to eat for my dinner this evening and what portion size should I have?’
- ‘What colour jeans should I wear today and will they look good with my stripy top?’
Firstly, details are lacking. I am unlikely to glean from your niche question what your interests might be, what you have some knowledge about or what you overall eBay business strategy might be. I won’t know whether you are a newbie or have experience. I won’t know what your buying power is or how big or small you want your business to be…
Just like you are unlikely to know what my favourite foods are or how big or small my appetite is, what colour jeans I own or what my stripy top actually looks like!
So, the best you could do in an attempt to answer my question about dinner for example, is to take a lucky guess. You might hit the nail on the head and I might end up eating a deliciously satisfying meal of just the right proportions, or you might suggest something that I acutely dislike.
Either way, there’s no real harm done in this scenario. However, lucky guesses are definitely not an option when choosing the ‘perfect niche and product’.
And that’s why there is no definitive answer to the question. There are lots of factors involved, including as I’ve said, your experience, interests, capital available, goals and aims. But what I want to give you an insight into today is something that can help you at least in part, determine the niche and product that may be the best for YOU based on your own interests, knowledge and ideas and more specifically how the actual size of a niche can affect the potential for you and help you carve out your ideal eBay business strategy.
Niches can be too big… or too small – finding the right balance is key to developing your eBay business strategy
I must make it clear that only you can decide which niche you want to sell into. Choosing a niche is only as difficult as you make it and many, many would be sellers end up procrastinating for way too long over this. Again, think about what your longer term eBay business strategy is. My advice is always to start with something that interests you, that you know about or is connected in someway to your lifestyle or a hobby or a passion. This makes it easier.
Once you’ve done that you’ll need to find out what the total sales are in that whole niche over a 30 day period. So, for example, if you have chosen the ‘Dog Supplies’ niche you should research the total combined number of sales for all doggie products over the past 30 days.
This could include dog leads, dog collars, dog coats and so on – you’ll need to make a list of products ready for your research. The niche will likely contain a variety of products like this which you’ll investigate and then eventually add all of your data together to get a total sales sum.
Now, I’m not expecting you to start counting products sold from individual sales listings. You’d still be doing it this time next year! There’s a far easier way and that’s by using Terapeak – specifically their ‘In Depth Research Tool’. You can get a free 7 day trial on that here.
Find the exact data you need by searching for each product individually (e.g. dog lead, dog collar etc) and then simply adding up all the sales. You’ll end up with a total number of sales for the niche as a whole that you’re interested in selling within and this will give you a general insight into whether that particular niche is too big for for your eBay business strategy for you to consider, or indeed too small.
But wait. I haven’t stated what exactly makes a niche too big or too small. No, I’m coming on to that now because there’s something else you need to consider in order to decide whether a niche is viable or not and that is your buying power. Just like a niche – your buying power can be too big – or too small.
Big niche. Buying power too small
Let’s assume for this example that you are a newbie and have a start up budget of around £500 to £1000. If you’ve done your research and discovered that the niche you are interested in has 30 day sales of £300,000 then it’s very likely that the niche is just too big for you to get into with such a small amount of capital.
You would need to spend your entire budget on stock and then there is the chance you would run into cash flow issues. But all is not lost – if this is the case then simply narrow things down to a smaller sub-niche – for example ‘dog leads’ – again calculating the monthly sales figures, and base your start up around just one or two products in that sub-niche instead. This way you’ll become more specific and your budget will go further.
Small niche. Buying power too big
Yes, it’s possible to have too much buying power that would be wasted on a tiny, tiny niche. At the opposite end of the scale, if the niche you’ve researched only has 30 day sales of £5,000 then it’s going to be far too limited for you to make any real money. The exception to this rule is if it’s for example a £5,000 per month niche with only a couple of sellers in it. This would be extremely rare, but it can happen.
The issue here is that a new seller in such an unsaturated niche will definitely cause waves, simply because those original few sellers will immediately see a drop in sales as soon as you enter the market. The knee jerk reaction to this will probably be price cuts from the original sellers and ultimately this causes a price war – and this is not good for anyone.
This doesn’t happen when you enter a larger niche because any impact from a new seller is offset across lots of other sellers rather than just one or two.
Don’t forget too that when a niche is too small to consider, the potential is there for your buying power to take you much further and much more quickly. The key is to make the best use of your budget and get a good return on investment.
So, consider the 30 day sales in the niche, consider your budget and also make sure you look at your competition – particularly sell through rates. You can see all this information very easily using Terapeak. Whatever your eBay business strategy it’s worth taking a look at this. Just so you know, this is not an affiliate link and I will not receive commissions for any sign-ups
With Terapeak you can make a far better informed decision as to which is the ‘perfect niche’ and the ‘best product’ for your eBay business strategy for you to sell, bearing in mind the actual size of the market and your own individual future business goals.