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Don't Get Burned by "Hot Lists"By Steve Nye, eBay Certified Consultant 
If you are looking for new products to sell to diversify your inventory, then Hot Lists are the perfect place to start. The keyword here is start, not end. Let me tell a story to illustrate my point. A friend of mine sells basically whatever he can get his hands on. After watching an eBay hot list for a few weeks, he took the plunge and bought 100 re-furbished iPod Shuffles. Unfortunately, he wasn’t able to sell these for a profit. He was loosing money on every sale, and ended up dumping the remaining iPods with a lot sale to cut his losses. What went wrong? He followed the hot list. But basing a product sourcing decision that is strictly on a hot list is like playing with fire—you’re most likely going to get burned! A Little Information on Hot ListsIf you have never used a hot list, eBay’s is perhaps the most complete and can be found at eBay's Seller Central. But in order to use a hot list effectively, you need to know how these lists are created. Many hot lists are created for lower-level categories and are based upon averages. This means that some products in that category will sell above the average while some will sell below the average. These averages are for Listing Success Rate only. This means that products within that category are selling at a high success rate, usually selling 50% of the time. But don’t forget, some products will sell more than 50% of the time and some will sell less than 50% of the time. Aside from the numbers, what does “Super Hot,” “Very Hot,” or “Hot” really mean? I had to read through the definition several times and am still unsure as to how it helps me as a seller. You see what I am getting at? While the information is helpful, it is very vague, and cannot be used to make successful product sourcing decisions. Hot Lists: A Great Place to StartI’m not saying to avoid hot lists. All I’m saying is to only use a hot list as a starting point, and not an ending point when you are looking for new products to sell. My friend used a hot list as an ending point, and bought 100 re-furbished iPod’s. What he didn’t know is that re-furbished units were not hot. These were on the less than average side of the line and in the end he lost money. Instead, use a hot list as a starting point. For example, I went to eBay’s Seller Central and found the Baby> Strollers> Jogging Strollers> Single Category to be “Super Hot.” By now you should know that some of these single-carrying jogging strollers will sell above the average and some will sell below the average. Once you know which categories are hot, you can use a research tool to find out if this category is hot for your business. Reading Around the Average LineLet me illustrate what I am talking about with some research. 
In the results above you can see that the Baby> Strollers> Jogging Strollers> Single Category is Hot, selling just over 51% of the time on average. But how can we know which brands or types are above or below 51%? Two brands stood out to me, and you can see them in the figure below. 
While Schwinn strollers sell 62% of the time (above the average), Rhino strollers sell 32% of the time (below the average). If we would have simply gone off the hot list and purchased 100 Rhino strollers, we would have made a very bad assumption from a hot list. Finding What’s Hot for MeLet’s compare Schwinn and Rhino in a little more detail. After all, just because Schwinn sells 62% of the time doesn’t mean that it is a hot product for you. 
In this case, Schwinn sells more often (higher Listing Success Rate) and for a higher price (Average Sales Price) than Rhino. Obviously Schwinn is the hotter product right? On eBay yes—but for you—not necessarily. A product is only hot if you can make a profit on it. And you can only find out if you can make a profit by knowing your actual costs to source the product. Simply put, if your source for Schwinn strollers is charging you $100 each, then it’s not a hot product. On the other hand, if your source was charging $60 for Rhino strollers, than it would be a hot product—for you. In order to really find out if something is hot, you need to know your cost to source the product. It’s only after you compare the performance of the product to your actual sourcing costs that you can decide if a product is really hot for your business. Make the most of your auctions with research!Try HammerTap FREE for 10 Days and remove the guesswork!Determining what works and what doesn't when it comes to your listings requires research. Anything less puts you at risk of not making the sale or not making as much as you could be on each sale. A research tool like HammerTap helps you bypass the costly trial and error process by quickly giving you the key information you need for profitable online auctions. Why not take HammerTap for a FREE test drive? We'll give you 10 days to put HammerTap to work for you. Use its power to determine:
As a bonus, you'll receive 10-lesson Power to Profit course to help you immediately see the effects research can have on your auctions. We'll also throw in selling tips from Industry Experts in our members-only Auctionography newsletter. You owe it to yourself to take the guesswork and risk out of your auctions. Try HammerTap free for 10 days. If you are not absolutely sure you'll increase your eBay profits by the $19.95 subscription price, you're free to cancel. It costs you nothing to prove to yourself there's a more profitable way to eBay. Click HERE to See How HammerTap Gives You the Power to Profit |
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