This section is primarily made for those selling a wide range of products but it can also apply to informational products and people selling just a few primary products.
Your inventory is not just about the items you have for sale but also the way you price them and what type of variety you have.
It’s often a good idea to have several varieties of the same product (different colors, sizes, styles).
Fortunately this subject has been studied and researched greatly and so finding out how to price your products is easy.
Using Ebay To Find Out What People Are Buying
EBay is by far the largest e-commerce site on the web. Million of transactions are occurring daily over Ebay and the have supplied its merchant account members with a wide variety of tool to assist them in selling.
By seeing how well certain products do on eBay you’ll get a better idea and a more realistic picture of what you can expect once you start selling your product.
Check out the top sellers on eBay and see what they do to be so successful, it may be a backend thing that helps them sell but also see what they do with the front end…you can learn a lot.
EBay Pulse is a resource for eBay merchants and it keeps track of the major trends occurring in eBay. Pulse will indicate the top items being searched, the biggest stores, and the items that are being most watched. According to pulse there is a lot more demand than supply with a certain items (hint hint… lots of opportunity).
You can find eBay pulse at:
- http://pulse.ebay.com
Terapeak is another excellent tool offered by eBay but it has a monthly fee of about $24.95. You can find it here:
- www.terapeak.com/signup
Terapeak offers a free trial and we highly recommend it.
Doing Your Research
Research is everything in business.
You want to keep track of the numbers and see what works and what doesn’t.
Not only can research be used to validate your idea but it can be used to give you knew ideas and point you in a new direction in regards to marketing.
There is plenty of research data available for free on the internet (just make sure it’s recent).
If you have money to spare you can hire the services of a market research company. Their reports range in price from several hundred dollars to several thousand dollars depending on how much data you’d like.
We recommend the following resources for market research:
- www.ecommerce-guide.com/news/research/
- www.emarketer.com
- www.forrester.com
- www.jupiterresearch.com
How To Price Your Products
Once you’ve done your research you should have a good idea of how in demand your products are and what the average going price is for your product.
The price you set can change the image of your business so you should price the items in accordance to image you want to give out.
If you want a warehouse image you should price your items at a more competitive price. If your market is the upscale type you can go for a higher price without too much difficulty.
The price you set should be based on the following factors:
- The demand of your product.
- How your competitors price their product.
- Your position in the market (if you have control you can afford to charge a little more).
- The expenses incurred by buying and selling the product.
- How much profit you’d like to make.
You should calculate all the expenses incurred by your product (the pricing floor). This is the lowest you can possibly go without losing money.
You can price items based on the perceived value of the item (some items, although cheap to make can be worth a fortune… like art)
Pricing your items can be a fine art but as long as you stay within a certain acceptable range, people will buy the product from you.
The secret to maximum profit is finding that perfect number where you don’t price it so high that you lose buyers but you don’t price it so low that you make too little profit per items.
How To Handle Your Inventory
Depending on the type of business you plan to run, you’ll need a certain amount of inventory on hand.
There are many questions you need to be able to answer when it comes to inventory.
- How many types of products do you plan to sell?
- How much of each item should you have on hand?
- Do you have enough room for all the merchandise?
The business with the largest array of products has no correlation to how successful that company will be.
More is not always better.
Marketing Your Self As A Low Price Leader
If your shtick and marketing plan is advertising yourself as having the lowest price items you’ll want to:
- Provide many choices
- Offer a lot of sales
- Find new and different products to sell.
Low price shoppers are looking for good deals and the quality usually comes secondary to price. Offer them many sales/coupons and discounts and they won’t be able to say no. Low price shoppers are always looking for a good deal on an item, cycling your inventory and changing items is a good idea with this type of person.
By cycling your items you’ll be able to see what items sell the most.
Keep a close eye on how and when your items are being bought. If you detect a pattern you may be able to capitalize on it.
Keeping A Limited, Specialized Inventory
This is probably the easiest method to take when selling online. By focusing on a niche you’ll have an easier time tapping that market. Niche markets are usually willing to pay much more for an item since the item is typically much more rare.
A niche market would be something like ladies perfume or Japanese tea pots.
Try to find a niche that doesn’t have too much competition but has a big following. With niche markets you should focus on acquiring the highest quality and most unique items.
When dealing with a niche market people want to trust that you know everything about the subject and that your items are the best out there.
Niche markets have small communities and usually have social networking groups. By joining these groups, you can make a name for yourself very quickly.