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The eBay Hot Items Report is a monthly report provided by eBay characterizing the previous months activities for items sold. EBay describes it as:
“Hot...Very Hot…Super Hot! Discover which categories and products are on fire—where bid to item ratios are high and demand is outpacing supply!”
So just what type of information is provided by the Hot Items report? eBay’s introduction to the report says:
“The Hot Categories Report (a.k.a. “The Hot List”) is updated monthly and gives an unadulterated view of level 4 (L4) categories that meet the following criteria:
In the interest of providing clear and actionable information, L4 categories named “Other” have been omitted.
Definition of degrees of “Hotness”
“Super Hot” – at least a 35 percentage point spread between bid growth rate and listing growth
rate. For instance, month-over-month bid growth for the L4 Category may be 50%, while month-over-
month listing growth for the L4 Category may be 10%. Because the percentage point spread
(40 percentage points) is greater than 35%, this category is deemed “Super Hot.”“Very Hot” - a percentage point spread between 15% and 35%. For instance, month-over-month
bid growth for the L4 Category may be 10%, while listing growth may be -10%. Thus, this
category is deemed as “Very Hot.”“Hot” - remaining hot L4s with spreads up to 15%.”
ARGGGG! My brain is shouting “English, John, English!” Math has never been one of my greater skills and when people start pumping statistical information at me, I start hearing the waves hit the shores of the beach on some far away island. Let’s see if we can figure out exactly what the Hot Items Report is really providing. Ok. The Hot Items Report begins by saying:
“The Hot Categories Report (a.k.a. “The Hot List”) is updated monthly and gives an unadulterated view of level 4 (L4) categories that meet the following criteria.”
So what exactly do they mean by Level 4 (L4)? Level 4 is basically a way to describe how distinctly (from a category standpoint) you define an item. WHAAAATTTTT???? Ok, let’s start from a much higher level. When you open the Hot Items Report for the previous month, the index shows the various categories that made it to this issue of the report. Typical categories from a report I pulled up are:
“Antiques
Baby
Business & Industrial
Cameras & Photos
Cell Phones
Coins
Collectibles
Computers & Networking
Consumer Electronics
Crafts
Dolls & Bears
Dvds & Movies
Ebay Motors
Entertainment Memorabilia
Everything Else
Health & Beauty
Home & Garden
Jewelry & Watches
Music
Musical Instruments
Pottery & Glass
Sporting Goods And Fan Shop
Sports Cards And Memorabilia
Stamps
Toys & Hobbies
Video Games”
This is basically a list of the Level 1 categories. Let’s look at the category of “Cameras & Photos.” A partial screen capture for the previous month reveals the following breakdown:
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In this example we see the 3 categories of ‘Hotness’ and then within each category, the subcategories of “Cameras & Photos” that made the cut. What the report tells me is that “Camera Body Accessories” “For 35mm Rangefinders” was a Super Hot seller for the previous month. So in this example, Level 1 is the main category of “Cameras & Photos,” Level 2 is the subcategory of “Film Camera Accessories,” Level 3 is a subcategory of “Film Camera Accessories,” called “Camera Body Accessories” and Level 4 is the more descriptive category of “For 35mm Rangefinders.”
When researching for an item to sell, Category 4 might draw you focus, however when it is time to actually sell, all of the categories will be important to properly categorize your auction since many shoppers still search by category, rather than by searching all categories.
Now for the math part. What exactly do the following statistical statements mean?
1. Month-over-Month bid growth is at least 1% at Level 4.
This one is pretty simple actually. Let’s suppose 2 months ago, there were 10,000 bids on the level 4 category of “For 35mm Rangefinders”. That means for this Level 4 category to be listed in this month’s report (last month’s business), it had to have had 10,100 bids. To make it to the report next month, it will have to have had 10,201 bids, etc. Basically eBay is looking for growth in the category each month.
2. Month-over-Month bid growth is at least 1.5 times greater than month-over-month listings growth.
Ok, this one hurts my head a bit, but let’s see if we can figure it out. Basically eBay is saying that to show popularity of an item (how hot it is), they want more bidders than they had in the previous month, but it can’t be just because there were more auctions.
This makes sense actually. For instance, suppose that in Month 1 we had 100 auctions and each one had 1,000 bidders. That would be 100,000 bids for a given Level 4 category. Now, suppose in Month 2 we have 200 auctions, each with 1,000 bidders (200,000 total bids). This increase in bids would meet the criteria of #1 above that says “Month-over-Month bid growth is at least 1% at Level 4.” Bid growth is actually 100%, however, popularity growth is assumed 0%. In this example there were just more auctions and no real evidence of bid growth. #2 is an attempt to show real bid growth in as scientific a way as possible, without looking at actual IDs of each bidder for each auction (that would probably hurt the head of eBay’s computer).
So in this example if there were 100 auctions last month with 1,000 bids each (100,000 bids total for this level 4 category) and 200 auctions this month, in order to get listed, there will have to be a total of 300,000 bids to make the cut as a hot item in Level 4:
Month 1 Auctions = 100
Month 1 Bidders = 1,000
Total Month 1 Bidders = 100,000
Month 2 Auctions = 200
Month to Month listing Increase= 200% (2 times as many auctions)
Month to Month bid growth requirement = 1.5 times (150%)
Required number of bidders for Month 2 = 300,000
2 X 1.5 X 100,000 = 300,000 Month to Month Listing Increase X Month to Month Bid Growth Rqrmt. X Month 1 Bids Total Bids If the number of listings remained at 200 for the following month, then #1 above would apply and 303,000 bidders would have to bid on the 200 auctions in this Level 4 category.
3. Bids-per-item is greater than the average for the relevant level 3 category.
Let’s use our example of “Camera Body Accessories” (Level 3) for this explanation. If we look at the available subcategories for “Camera Body Accessories,” we find the following Level 4 categories:
LEVEL 3 CATEGORY LEVEL 4 CATEGORY # of Bids Camera Body Accessories ----> For 35mm Rangefinder 850 For 35mm SLR 235 For Medium Format 680 For Large Format 750 TOTAL BIDS = 2,605 LEVEL 4 AVERAGE (Minimum Bids to Qualify for rule #3) = 651 While it appears in this example that we have three Level 4 categories that would qualify, each would still need to meet the requirements of Rules #1 & #2 to be listed on the Hot Items report.
4. Conversion rate for the L4 category in the most recent month was at least 50%.
Rule 4 is pretty straightforward. If we meet all of the requirements of Rules 1-3, then at least 50% of the auctions for the Level 4 Category must have ended in a completed auction (Someone won the bid).
5. Level 4 category must receive at least 100 bids per week.
Rule 5 is also pretty straightforward. If we meet all of the requirements of Rules 1-4, then the Level 4 category must receive at least 100 bids in each week of the month, so simply having 400 bids in a 4 week month will not qualify the category. There must be 400 bids total, 100 in each week.
While having a complete understanding of the above information is not imperative from a research standpoint, it helps the user to appreciate the relevance of the items listed and how they relate to the previous month. However, it may not provide as complete a picture as is needed to determine the marketability of your product or service. For instance, the 100 bid per week rule will keep many items from being listed that could very well be items that could easily sustain your business for many months to come. While it may be true that a given item is not the ‘hottest” as evaluated by this rule set, it still may be a very marketable product and provide a substantial income for the seller.
If you are fortunate to have marketable products matching the Hot Items report, then it probably is not necessary for you to utilize the other tools that are available, other than to determine your ability to complete. However, if your product is not listed, then further research is required to determine your product’s marketability.