Yesterday I received an email from a woman, who had just read a post I made on an auction forum three years ago finding profitable eBay niches in the antique/collectible categories, wanting to know if I still considered the information to be valid. My response was that basically, three years later, I’m still using the same methods to come up with new eBay niches and sub-niches to target.

Since the original post was made on a forum inside a paid subscription site with a limited subscriber base, and since it’s three years old, I thought I’d post it here again because it gives an accurate description of how you can go about finding these eBay niches. Then, since I’ve been researching one of these sub-niches and am about to dive into it, over the next week or two I’ll show how I found this niche, how I researched it, how I plan to exploit it, and how you should be able to also.

The biggest mistake people make when looking for something they can profitably sell on eBay is that they go about it entirely backward. They start their search for a niche or product on eBay, choose a niche they see hundreds or thousand of other people already in, decide it must be profitable, and then go looking for product sources.

Lets be honest. If you can’t buy a product in sufficient quantity to keep a steady stream of auctions running it doesn’t do you much good. Additionally, if you can’t buy that product at a price that affords you a reasonable profit margin, what’s the point?

You will increase your chances of success a thousand-fold if you start at the opposite end of the search process. First find a niche or product that fits certain criteria, then see if there’s a market for it on eBay. Here’s how I go about doing it in the antiques/collectibles market.

I look for items in antique stores/malls, flea markets and antique shows that fit the following criteria:

1. The item must be readily available in fair sized numbers. You will probably find numerous examples for sale in nearly every mall or flea market you go to.

2. You should be able to find numerous examples priced in the $1 to $10 range with most priced in the lower half of that range. This low pricing is important because it indicates that while most general-line dealers know people collect these items, they don’t perceive them as having much value.

3. The item should be a small sub-niche of a larger niche that already has a large collector base. For example, advertising is a sub-niche of the larger antique/collectibles niche. Tins are a sub-niche of the advertising niche. Coffee tins are a sub-niche of the tins niche. One pound keywind coffee tins are a sub-niche of the coffee tins niche. It’s these small sub-niches buried several layers deep within a larger niche that you should look for.

4. It should be an item with a large number of variations. There were thousands of different brands of coffee sold in one pound keywind tins years ago.

5. Ideally, there shouldn’t be a book or price guide written about the item. Once someone writes a book about a sub-niche, dealers buy the book and prices at the malls and flea markets rise significantly. (Under certain circumstances there is a way to can use the publication of a book or price guide to your advantage and we’ll discuss this special situation later.)

Once you find one or two sub-niches that fit these requirements, then it’s time to start looking on eBay to see what kind of activity there is in that sub-niche. Here’s what you should look for:

1. There shouldn’t be a huge number of items listed each week but there should be a steady stream of auctions week after week. A regular 20 to 100 weekly is attractive.

2. You should see a consistent sell-through rate of at least 50 to 60 percent within the sub-niche week after week for all but the most common variations.

3. Most of the items should have multiple bids. Obviously the more the better, but you should look for a minimum of five to ten bids on most items that sell.

4. You want to see a small group of at least five to twenty bidders who regularly bid each and every week. If you look at closed auctions you will see this same group of bidders competing against each other on a regular basis.

5. Final selling prices for at least 50% of the successful auctions should be $25 or higher - preferably $50. You should also see several items each week selling in the three figure range or even higher.

When you find a small sub-niche that meets these ten criteria you’re well on your way to having found an eBay niche that you can easily profit from.

In part II we’ll begin looking at a specific sub-niche I’ve been looking at and how it fits each of the criteria shown above.

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