Should I Focus in a Niche in my eBay Business?

Many times I've heard people debating:

Should we focus in a particular niche of items when selling in eBay? Or should we expand the scale with as many diversified items as possible?

Before going into the discussion about eBay, let's take a look at the real world first.

When you go shopping in a mall, trying to look for some decoration candles. You shop around and find a shop specializing in hundreds of candle items. No wonder you'll dash in see what interest you. However, you may not notice that a gift shop just next to the candle shop also sells quite a number of pretty candles good for decoration. Seems like there's an obvious advantage for a specialized shop, focusing in particular niche, isn't it?

Not really. We have an assumption that the specialized shop hits the demand well and therefore, it can absorb a lot of sales. But how big is the demand for candles? Is it good enough to support the operations of the shop? Are there many people looking for candles throughout the whole year? Or is the demand seasonal? Is it more vulnerable if selling one type of item only?

How about the more diversified gift shop? It may not catch the demand for decoration candles well. But they may have attracted a lot more of customers who don't have a very strict shopping target. They may not know what exactly they want until they walk around the shop. They may search for a card holder at the beginning, but end up with a purchase of few more photo frames they don't expect. Besides, different items may have different demand at different times. A more diversified shop is definitely more sustainable throughout the year with a more stable sales.

OK, now back to the eBay world. Is it the same as the real world? First, you have to think about: how do people get into a listing or an eBay store? Do they "walk" around eBay before they can find the items they need, just like you walk around a shopping mall? Most of the time not. They do by searching. If they are interested in some decoration candles, they may start by typing the keyword "decoration candles". Then hundreds of related listings shown. Do they know if these listings come from a niche shop, selling candles only? No, of course not. Even when they've clicked in the listing, they'll not know until they further click to the seller's eBay store.

But what a big deal if the customer goes in a non-niche shop? If he thinks the item is good and reasonable, if he believes the seller is trustable based on the feedback profile, he's very likely to buy.

So you can see, the advantage of attracting particular demand for a niche market in the real world may not apply in eBay. However, the advantage of a diversified shop in the real world can exist in eBay on the contrary.

Image that a candle buyer clicks in a listing of candle which interests him. Then he finds some cross promotional boxes showing some other interesting items. He may keep clicking and see what he can buy from the same seller at the same time, probably with certain combined shipping discount. Just the same as the real world.

Have you determined how you should set up your sales strategy?