eBay Market Place Research: Value of Information and Intelligence

Last week I wrote how critical it is to leverage competitive market intelligence to formulate your marketing strategy and tactics. If that point needed any further emphasis, here it is: eBay is just launching its Market Place Research Service, a subscription-based service, to enable buyers and sellers to make informed decisions on their trading. For examples, buyers can figure out the price at which similar items have been sold in the past 90 days, while sellers can discern product demand trends as well as gauge the likely price their sale will fetch.

With the volume of data that eBay gathers, the information that buyers and suppliers have is definitely very representative and quite a good indication of the latest trends in the market place. Obviously, eBay realized that the data that they gather has the potential to be an excellent revenue stream by itself. Everything the company has done so far has been driven by the volume game, and this one is no different--- by pricing the service reasonably low (the entry level price point is less than $3 for access of data up to 2 days), it should be able to attract a sizeable chunk of its existing customer base to sign up for this service. The numbers are staggering --- even if the company just signs up a conservative 5% of its user base of about 168 million to opt for its entry-level price-point, we are looking at about $25 million in revenue!! As you can imagine this is a very conservative estimate... Just goes to show the value of data, if one knows how to use it...

Before I digress (getting carried away by how a company can potentially leverage its existing information to create a completely new revenue stream), let me look at it from our (affiliate) perspective as usual. Quite simply, this means that affiliates will have a lot more information at their fingertips, which they can use in deciding the products they want to promote at different times. Even if the data is internal to eBay, the numbers should make it reasonably representative for affiliates to correctly evaluate and forecast future buying trends and plan their promotions accordingly.

I believe affiliates will have to acquire a love for numbers and sharpen their analytical skills based on all the quantitative data that becomes available to them. That will have to be the fundamental basis for decision making--- sure, one mustn't lose that great virtue called instinct, but that is best used as a casting vote.

Until next time,

Ben Flux

P.S: i) Zanox UK Affiliate Academy will be held on the 18th at the Soho Hotel in London
ii) Check out TradeDoubler's Christmas promotions page

posted by Ben Flux - Traffic Junction @ 11/14/2005 05:58:00 AM