(Part 1 of 2)
The internet is full of information advising eBay sellers to find a niche or specialize in one product category. There are search engine benefits to having a niche, because the seller will get higher search placement on items with fewer competitors. The downside to a niche is that sellers may become too specialized and experience slow sales when the demand for their product decreases or the product is no longer available.
Diversification is important from a financial investment perspective, and this concept applies to the eBay universe as well. When sellers diversify, risk is reduced. Return on investment is maximized, because different products and product categories are affected differently by the same triggering event.
Innovations in technology are a classic example of why a seller should never focus on one single product in the electronics, computer or mobile phone categories. Technology changes so quickly that these types of products and accessories become obsolete very quickly. Then the seller is back to square one finding a suitable product to sell.
To be continued–_