We were recently asked by the Wall Street Journal to provide some data on sales for one of the hottest items last fall—Snap Spectacles for Snapchat users.
When we looked at the sales data for Snap Spectacles, we saw a familiar trend. It was a product affected by both explosive niche demand and, at the same time, a period of very low availability. As a result, eBay Prices climbed to many times the retail price for a number of days, then just as quickly began to rapidly fall until they essentially returned to retail levels once again.
This kind of boom-bust cycle is familiar to arbitrage and some holiday season sellers. It's often directly driven by shoppers that are willing to pay top dollar to be "the first on the block" to own a product that, after a period of low availability, eventually becomes commonplace. During the low-availability period, however, margins can be very high.
With every year that passes in e-commerce, this cycle becomes more common throughout the year, so we thought it was time to offer four basic tips to sellers that are going to try their hand at repeatedly selling the hottest, trendiest, hardest-to-get items on eBay. Here they are:
Do your research—beforehand and day-by-day. Just because a product is hyped by the press as rare and in-demand does not automatically mean that it's worth a great deal online. By the time the press starts talking about a product like Snap Spectacles—and what they are going for on eBay—the biggest part of the boom cycle is often over. Use Terapeak to see what prices are really like and how many are actually selling. Keep your eye on this data every day. As prices start to fall, at some point acquiring more inventory no longer makes sense. While prices are still rising, on the other hand, the data will help you to understand how much you can afford to pay for inventory and how much you can likely sell.
Consider selling at auction, rather than at a fixed price. Around the time that Snap Spectacles were at their highest prices on eBay, most sellers were selling them via auction listings. That's the right idea. One poor seller, however, sold a brand new pair of Snap Spectacles at a fixed price. Sure they brought in significantly more than MSRP, but the seller ended up selling for hundreds of dollars less than the average auction price for that day. When hot trends and media coverage are driving must-have buying, prices can fluctuate wildly and bidders compete with one another. Whenever those two things are true, you're better off letting bidders set your price, rather than trying guess at what you can get for an item.
Don't flood the market. If you've managed to find a steady source for a hot-but-rare item, don't rush to list dozens of them all at once. Look carefully at how much inventory is available and at how much is already in the channel. List too many at once and prices could fall as a result—meaning that you sell two dozen items for exactly as much as you'd have earned listing just four or five or them. Research unit volumes and bid counts carefully. If there are lots of bidders for each listing and sales are brisk, you're probably good to list in quantity. If there have only been a handful available for sale, however, listing too many all at once could crater prices. Under those conditions, you're probably better of listing just one or two at a time.
Don't get greedy. Enthusiasm buying tends not to last very long, and it tends not to visit any one product a second time. You're in this to make money, so turn your inventory over as quickly as you can without flooding the market. Your goal is not to hold out for the highest possible margins, nor is it to drive the highest number of sales. Your goal is to ride the crest of the trend's wave and move product at inflated margins—for as long as they last. So while you should be careful not to flood the market, you should also avoid hanging on to inventory to hold out for a particular price or return on your investment. Instead, move inventory through your hands quickly as it arrives, at whatever price the market is willing to pay—even if this means slightly smaller margins—because today's trendy products can and do become next week's has-beens.
Keep these tips in mind and you'll be in good shape to earn whatever profit is available the next time you find yourself well-positioned to flip low-availability products that determined shoppers are clamoring for.
Research a full year of online sales in detail for any product or keyword—average prices, sell-through rates, top listings, and more. Try Terapeak Professional today!