Market analysis is very important to determine what sells and what doesn’t. When you’re paying eBay $100 listing fees for featured auctions or $20.00 listing fees for category featured dutch auctions, you need to continually evaluate the profit potential, profit margin, and sales percentage of your products as relates to the length of auction, type of auction (featured, featured in category, bold face title, etc), description & sales pitch, price, and a number of other factors.

I’m not going to provide you with a complete plan for performing a market analysis because this isn’t an economic manual, but I will give you a few tips. The best way to perform market analysis on your products is to use a spread sheet which automatically calculates your best-selling items and recommends which items you should discontinue and which items you should feature. The auction manager I reccomended before (Auction Tamer) can help make this a simple and quick task.

In particular, you should evaluate the following points FOR EACH OF YOUR PRODUCTS:

• Sales percentage (number of listings for a certain item / number of sales)
• Profit margin (average profit of the item)
• Profit potential (largest profit from the sale of the item)
• Category sales percentage (sales percentage for a certain item listed in different categories. Which category does it sell best in?)
• Featured auction profit margin vs. category featured profit margin (does your profit margin from featured auctions for a certain item exceed your profit margin for category featured auctions? If so, you should feature the item. If not, you should only category feature it)

Performing a market analysis is one of the most important ways to maximize your net revenue once you have listed enough auctions to collate plenty of raw data.

I use an easy-to-use tool called ProfitCalc to help me perform my market analysis. It turns a long laborious task into mere minutes of work.

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