Comparing yourself against the market is a great way to assess if you alone are experiencing an up-lift or a downturn. It’s a good start to identify how to troubleshoot sales issues and it gives you a big picture of how everyone else, in the same boat, could be going.
Here are the steps in building a market comparison.
1. Define your market segment.
If you’re a specialised online seller, for example – selling Bee Keeping goods – then defining your market segment could be pretty easy. The eBay subcategory Bee Keeping, or the search term “Bee Keeping” could very well define your market.
If your online store and inventory are not so narrowly defined, look up several subcategories or search terms that can be used to summarize the top performing products you have in your range.
Go with the 80/20 rule. Select subcategories or product groups that drive most of your revenue. Consider your foundation products and your transient fashion or seasonal products.
For example, your foundation products could be camp gear, but for this season, your revenue could be strongly supplemented by a few palates of Ugg boots. You might want to define your market, especially for that season, with data about camp gear and Ugg boots.
You need to feel comfortable with your definition of your market so run a few Top 500 Live Listings Reports to assess whether you’ve found the best comparable sellers and products. Refine your report criteria with keywords and categories until you think you’ve found the best representation of the market you compete in.
2. Compare yourself to the market.
The simplest way to compare yourself to the market, and to your direct competitors, is to find yourself in the Top 500 Live Listings Report. There are two key metrics to focus on:
Your share of listings in the Top 500. In the left filters, put your own seller id into the Seller field to see how many listings are in the Top 500. You want to ensure you have a solid presence in your market, otherwise your buyer will hardly ever come across your products and you will washed out against your stronger competitors.
Your rank in the Top 100. Use the Rank filter on the left to see if you make it within the Top 100 or even the Top 50. Not only do you want to be highly ranked, you want to own as many positions within the Top 100 and Top 50 as possible. This way when the buyer is browsing, they are mainly viewing your product listings. The rule of thumb is that the buyer is hard pressed to get beyond page 3, so the higher you rank, the more likely you’ll make a sale.
Now examine the listing share and rank of your competitors. You must know who is the strongest in market so that you know what you’re up against. You can learn from their stronghold and get an idea of their pricing and merchandising strategy to dominate visibility and rank.
3. Get an idea of market & competitor performance.
Now run the same report criteria with the Average Weekly Sales report.
The Average Weekly Sales report offers an indicative view of the average sales being made every week, based on longer term sales performance. The most important metrics for this report are:
#Sold/week: The average number of items sold per week.
$Sold/week: The average revenue per week from sales achieved.
At the top of the report are the Summary Box metrics. Total #Sold/week and Total $Sold/week give you an idea of how, as a market, how much those listings are selling every week.
Again, find yourself and your competitor in the data. This sampling of data gives you the best indication and comparison to how you and your competitors are performing against each other.
Regularly checking yourself against the market is a great way to assess performance and to get an idea of how you are tracking against everyone else. It can give you signs for areas for improvement or validate any business decisions you may have implemented.