Question

Topic: Research/Metrics

Secondhand Market Statistics / Market Research

Posted by yurp_82 on 1/27/2011 at 7:25 AM ET 25 Points
Hi everyone,

Really hoping somebody can help me with some advice and possibly some solutions! :)

I'm working on my business plan for a new online marketplace for secondhand goods and handmade items. I have conducted some survey research for same and collected data on existing websites/companies that are relevant to the market/s I seek to enter inlcuding the larger and smaller competitors.

My main difficulty is establishing the size of the market to enable me to establish an idea of expected percentage share. I would like to do this to predict growth and income over the coming years. Being a particular yet varied section of the online retail market I am struggling. For example, online shopping figures include figures for high street online retailers, which are in a different market.

Whilst I have facts on internet access, number of online users nationally and internationally and total online spends/predicted future spends, I feel I need to defie the specific share of this particular market. I obtained facts from eBay in relation to the number of users, listings and 2009 sales figures, but it seems without knowing the market share I can't work out any percentages and therefore they are not that helpful.

I was hoping to use such figures to work out percentage shares in the following way:

Total market / sales = fraction 100/fraction = gives the percentage

e.g 50 billion / 100 = 500,000,000 = 1% of online sales

Ebay UK’s percentage:
Revenue £? / 50 billion = ?

I also wish to work out the figures for the UK and those globally e.g eBay Uk and eBay.com- then there is the issue of Uk, Europe, America and all countries. I'm not sure which statistics would be better. I look to start of as largely UK and grow to include other countries.

As you can tell, I am far from an expert in this area, and given the amount of time I've tried to find the answers/ways to work these things out through my own research thought it was time to ask here and hope some knowledgable person is willing to help. I may well be way off the mark, so any advice would be greatly appreciated!

Kind regards,

Emma
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RESPONSES

  • Posted by Peter (henna gaijin) on 1/28/2011 at 12:53 PM Accepted
    If this is a class project or the boss really wants to go this way, then you'll need to keep searching.

    The markets you are after are likely so huge that going with a percentage share doesn't seem to be that useful to me. How do you know you will get 1%? Maybe it will be 0.9%, which changes your projection by 50 million. Seems too much of a guestimate with huge variations based on your assumptions.

    Instead, if I was starting this business, I would look the other direction - how much sales can we find through our planned promotion activities. Are you going to strongly promote this new site, then you might get decent sales. Or if not, the sales will come very slowly.

    What you may want to do is look at the results of eBay and Yahoo Auctions and similar when they go into a new market. They have name recognition, so likely would do better than a new site, but it still could be educational to see how long it took them to get to what sales level.
  • Posted by yurp_82 on 1/28/2011 at 1:25 PM Author
    Hi Peter, thanks for your response, ceryainly given me things to think about. I am serching for the information for my new business to try and work out financial projections for my business plan. I could be way off, but without them it just seems to be like plucking figures from the air. Everything I seem to read put a big emphasis on market research and figures which has also become my sticking point.

    I thought working out a percentage share, even as a tiny, tiny percentage, at least gives me somewhere near solid projection figures. For example, if I could work out eBay's market share, then the smallest relevant site I have some figures for (and I think with strong promotion can do far better than) then I can realistically pitch my figures and business.

    I can see the way you said you would approach things, how many sales can I generate with planned promotions. My only difficulty with this is trying to figure this out to be as accurate a possible. That's why I thought the percentage share was the way to go.

    Even if I could look at it in terms of registered user numbers or unique daily site visits...Maybe that's the way to go? I wonder if classing eBay as having the bigest share at X amount of visits per day as 100%, then stack the others against that, so I can work out how many visitors I can look to attract and then work out the amount of sales this could generate based on the standard sales conversion rate. This wouldn't tell me anything about the income generated.

    A lot of that's thinking out loud! I'm looking to take the business plan forward for investment purposes which is why I need it to be so tight- well the main reason anyway. All input is greatly received! I thought I'd put the points for the question as 250 to attract help and now it wont let me alter it!

  • Posted by yurp_82 on 1/31/2011 at 1:57 PM Author
    Keep checking in to see if anyone has any suggestions...please help someone, I know there's people out there who have this kind of know how!
  • Posted by Jay Hamilton-Roth on 1/31/2011 at 2:17 PM Accepted
    Look at eBay's Investor Relations page for their public data: https://investor.ebayinc.com/
  • Posted by yurp_82 on 1/31/2011 at 2:30 PM Author
    Hi Jay, thanks for replying to my plea! I have had a look on the eBay site that you recommended and have hold of the information on the site.

    I'm looking to find how that data fits in terms of the secondhand market. I need specific market research on this market and also the handmade market.

    In terms of my business plan it's not good enough to say there is clearly a market out there, I need to talk figures, how popular it is, how much money it generates and where my business will fit in. And... I am still struggling to work out the best way to do this! All input helps.
  • Posted by yurp_82 on 2/4/2011 at 1:17 PM Author
    Thanks for the advice to those that tried. I've received an email stating the question question will be closed tomorrow if I haven't done it myself so have decided I better do it! I'll maybe post again with more points on offer and see if I can find some more help :)
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