The eBay experts I have read are all in agreement as to what it takes to build a successful business on eBay –which is that you must find a profitable market niche.

For those of you who are not familiar with niche marketing, here's an easy way to think about it: Women age 18-34 are a market. However, it's a difficult market to crack because it's huge and its members are very diverse. And it would be very, very expensive to advertise to it.

So, what a smart marketer would do is look for a market niche, or slice of this market, that's smaller and easier to define.

For example, one possible slice would be woman age 18-34 who spend a lot of time with their hands in water. You could then define your market niche as “women age 18-34 with dry, chapped hands.” This gives you a smaller, market that would be easier to target, and your advertising message practically writes itself.

So, how do you find a profitable market niche on eBay?

You need first to pick a market, for example, “dog lovers.” However, like women age 18-34, that's a pretty big and diverse market. So, the next step is to define a potential niche within that market. For example, one niche might be dog lovers with small dogs (10 lbs. or less). Another could be dog lovers who own a specific breed such as Beagles. You could narrow things down even further by defining your niche as dog lovers who own Beagles and want to protect them in cold weather.

Here's another example. Start with the market male golfers. Next, narrow it down to, say, left-handed male golfers. Finally, to get even “nichier,” how about left-handed male golfers who are having trouble putting?

Next, comes the profitability part

How do you determine whether your market niche would be profitable? The answer is simple. You test, test, test.

Find products that you think should appeal to your market niche, put them up on eBay and see what happens. eBay is a great research tool because it costs so little to list items. You can list different items to see which attract the most attention. Or you can list the same items but with different sales messages (descriptions) to see which message does best. You can even test pricing by listing the same items at different “buy it now prices” or by starting the auctions at different levels.

It may take time and effort but, yes, you, too, can become a successful niche marketer on eBay.

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