While the Internet has been busy getting its groove on EBay, the first real online auction site, has been quietly working away without Meg Whitman. Whether you are looking for Prada shoes of LED HDMI cables, EBay is a one stop-shopping extravaganza. The really interesting thing about EBay is that it is without a doubt one of the best marketing analytics tools available on the web. Moreover, it is just sitting there free for the use. EBay is exceptional for market/brand research. It also measures two difficult things:

1. EBay accurately measures brand desire and trends in real time.

2. EBay rates customers.

Both of these things when applied analytically to any niche market are extremely valuable. It’s likely that Neiman Marcus have been using EBay for market research and brand exposure for their Last Call stores for quiet some time. Priced much higher than most of the used merchandise on EBay, these items rarely sell. However, similar items do sell and EBay helps Neiman determine what will and won’t sell in their Last Call stores and to a degree in their regular stores.

Brand Desire and the Aspirational Shopper

The truly rich section of society probably doesn’t shop on EBay, why would they? However, many luxury sales are driven not by the really wealthy but by aspirational shoppers. These are people that can’t afford a 6 million dollar ski house or charter a plane. However, they can afford an Armani suit or maybe a pair of Prada boots. Aspirational shoppers are what drive brand sales for everything from cars to cell phones. EBay is the homeland of the bargain hunting aspirational shopper and this is why it is excellent for brand research. By watching the auctions of popular brand name items it is possible to see the magical power of branding at work and quickly determine what is “hot.” For example, what makes a used Moncler jacket command a $250.00 ending price with 11 bids while a comparable Cinza Rocca Due jacket goes unclaimed at $59.98? This is powerful information for anyone in online marketing or retail.

Watching brand desire on EBay also makes it possible to spot trends. For example, some of the most sought after items in women’s clothing are Fossil purses and North Face puffer jackets. These items can sell used on EBay for close to their new retail prices. What is interesting about these two brands is that they are not top of the line traditional aspirational brand names like Versace, Prada or Pucci. New, these items are not wildly expensive. However, they are cute, well made, and functional and shoppers want them. This is reflective of a new trend in aspirational shopping that reflects a more money conscious buyer. The fascinating part is that a used Fossil purse (new at about $200.00) can demand a higher price on EBay than an authentic Pucci purse from a top rated seller (new at about $1,000.00). The level of desire for the product dictates the value.

Watching desire on EBay works in almost any category. For example, it is possible to buy HDMI cables to hook up sound and video systems. Certain types of cables sell much better than others. Moreover, using EBay’s geographical tools it is possible to determine the demand for different types of cables in different markets. This in turn reveals the penetration of different types of audiovisual systems depending on the region. The audiovisual cable shopper on EBay isn’t an aspirational shopper so much as a shopper in search of convenience and a deal. If you happen to be an online seller of HDMI cables it would make sense to design your website high lighting cables that are in high demand on EBay.

EBay: Judging the Buyer

Bum buyers have been a problem on EBay so buyers as well as sellers have ratings. Sellers can also block bad buyers from bidding on their items. Rating buyers in the past has been the sacred land of credit agencies and credit card companies. However, this is an excellent metric that has the potential to transform all online commerce. Simply put, sellers would love to know the star rating of their buyers. Good buyers = happy sellers and lower prices. Bad buyers are not worth the energy. They are slow to pay, they return things for no reason and they provide substantial losses for any business. Distinguishing bad buyers isn’t generally easy even on EBay. Sellers cannot leave anything but positive feedback for buyers so the scores are not as valuable as they could be. However, certain categories tend to attract bad buyers much more readily than others and this is easy to see by comparing bidding categories and buyer ratings. Online sellers and marketers can analyze the ratings of buyers in different categories to cherry pick customers through their choice of inventory. In addition, in categories where there is a high level of bad customers a seller can institute strict return policies to protect profits.

EBay: Niche Communities

Every section of EBay is full of niche communities and niche sellers within these communities. Many of these sellers have established themselves as their own brands and they have strong followings. Niche sellers’ items sell better and get higher bids than non-niche sellers on EBay. Following any category identifies the niche sellers. These are social communities too and members occasionally chat with one another while they are asking questions about an item. Anyone interested in online selling can learn a lot from EBay’s successful niche sellers. They know how to use online marketing, keywords, photo listing services, descriptions and images effectively.

One example of a niche EBay seller is lassiefaire. This seller targets budget-minded working women with high quality used clothing made out of natural materials. As a convenience to her buyers she coordinated outfits together so that it is easy for them to buy an entire outfit at one time. Return buyers come back because they can trust that the quality and condition of the clothing has been hand picked by lassiefaire. It’s cheaper and easier for time-strapped working women to rely on her as their personal shopper than to try to tackle any other kind of store. Their choice to buy used items is also eco-friendly. This particular seller is expanding her business into an EBay storefront called “Transit of Venus” to further capitalize on her customer following. This type of niche targeted selling is the antithesis of Costco and it is likely to dominate online sales in the future because it is so much easier for the consumer. Niche selling brings buyers exactly the types of items they are interested in buying quickly and efficiently.

EBay tools allow a searcher to break down almost any metric and collect data about almost anything and then save the searches to test them again at a later time. For anyone interested in online market research this is one way to gain a valuable perspective.