Research Shows Sellers with Focused Expertise Do Better on eBay

[eBayNews]

eBay sellers do better when they focus on the category or categories they know best, according to Stanford Business School researchers. Sellers whose goods or professional identity span multiple categories do not perform as well as sellers whose offerings or expertise are more clearly associated with one or two product categories. The research currently appears in StanfordKnowledgebase.

The researchers examined consumer responses in two areas: Hollywood films and eBay auctions. Stanford Graduate School of Business Professor Michael Hannan and co-researchers Greta Hsu of the University of California, Davis, and zgecan Koak of Sabanci University in Turkey, found that films identified by audiences as belonging to one or two genres - such as western, comedy, or science fiction - were rated more favorably than those they slotted into more than two genres. In other words, a comic sci-fi story set in the Wild West would have proven just too much for most people's taste.

A second part of the research that looked at eBay auctions suggested that sellers do better when they stick to the category or categories they know best. The researchers examined nearly 1,500 online titles that sellers posted to identify their auction items in a host of categories such as dolls, Elvis memorabilia, and toy trains. They found that certain sellers used sophisticated lingo in their titles that would be known to experts in a particular category, and that this resulted in more successful auctions.

"Acronyms like CPK for "Cabbage Patch Kids dolls," and quality markers like "Certified MS63," for example, were important signals to bidders that the seller was knowledgeable about the doll or coin categories," according to Hannan.

Sellers who used the more expert titles tended to auction other items in only a few categories, while those who used generic titles frequently posted other items in a host of other unrelated categories. The odds of completing a sale for sellers who listed items in more than one category were only a third as high as for sellers who focused on a single category.

Link to research summary