Just as any other business, you must ensure you stand out from the crowd and show you are different in ways which encourages and convinces prospects to buy from you. There are really two things rolled into one here – first, maximizing your efforts to attract a pool of potential customers and repeat business, and second, extracting the maximum value from that pool of prospects and repeat customers so you end up with more bang in profit and sales for your bucks invested and have happy customers in return.

By the time you have attracted a potential buyer to your auction site, you have invested a great deal of the time and money required to promote your business. Now you must seek to maximize that investment; if you have a potential customer, soon to become a customer in fact, you should do everything possible to create as much value for them as you possibly can.

How do you do this?

The most effective strategy is to carve out a niche for yourself and not to spread yourself too thin. By concentrating on a narrower range of products, you maximize and focus your concentration upon that product area; your knowledge will be so much better and your marketing efforts can be completely focused on promoting a narrow product range.

What drives these cost savings and increases the opportunity for cross-selling of related but different products is known as synergy. For a small eBay business, you must use synergy within niche marketing to ensure you are absolutely concentrated on a specific target audience with very specific product offerings. Then you also will be able to develop far more effectively the cross-selling and repeat business opportunities which are available as a consequence. This again in return will create a happy customer.

Let’s take a practical example.

Selling DVD’s – the DVD market is huge and though one major product, it is very broad catering to an extremely wide range of tastes with numerous different movie genres, documentaries, travel and education as well as home DVD productions for weddings and special occasions. For a newcomer entering the market, you cannot possibly compete across all forms of the market without an enormous investment of capital to promote yourself and have the buying power with suppliers to offer competitive prices.

Narrow the range you are offering to, say, popular TV series boxed sets; all you offer are boxed sets of current popular TV shows such as House, Stargate SG-1 or Two and Half Men. Now you are not promoting new film releases or need to compile and promote movie marketing information for such a very wide sector – you are focusing your marketing and promotion upon existing TV shows and that you are selling complete seasons as boxed sets. You have dramatically reduced your product offering and now have focused all your marketing on “boxed sets”.

By selling only “boxed sets”, you are able to hold an intelligent negotiation with the suppliers – you will obtain better pricing and terms from them because you have cut out the rest of the lines they offer and can show you are only selling a specialized part of their line. More than this, you only need to track new boxed set releases into the market and maybe current developments with the popular shows you are offering.

By building your business upon a niche you specialize in, you will come to dominate the mindset of your prospects and customers; they think “I want to buy XYZ Season” and automatically they are more likely to think of you and come back for more. They see SG-1 Season 1 on sale, you have the opportunity to cross sell Season 2 or combine them as ‘special offers” and discounts for multi-buys.

Even better, as you grow and you negotiate ever more competitive pricing from your suppliers you gain competitive advantage by being able to undercut the general competition who then find they cannot compete against you at your pricing levels nor on your knowledge of the products and that micro-market. You raise barriers to entry by exploiting and dominating your niche market.

Please check out a very entertaining short video on finding your niche HERE – in this example to follow what  already has been proven to sell (in this example DVD’s) will allow you to find your own niche.

In our next piece, we are going to be looking at how you source your products and the resources and suppliers beyond Craigslist and yard sales who are vital to growing an eBay business including dropshippers, wholesalers and other product sources.

Wishing you rippling success! Your comments and questions are always welcome!

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