Has Etsy Paved The Way For Niche Marketplaces To Survive & Thrive?

Marketplace eCommerce has been around for over 15 years with the biggest names in the game Amazon and eBay both being founded in 1994 and 1995 respectively. So much so that most eCommerce businesses will have a multi-channel strategy that features both eBay and Amazon (If you don’t, then you probably should).

Whilst the largest marketplaces in the world right now, Amazon, eBay, Walmart.com and Alibaba are generalists in terms of what they sell, there is a smaller and yet very interesting dynamic happening in the marketplace eCommerce space.

This is the growth of the niche marketplace. The specialists rather than the generalists. Amazon started out as a specialist marketplace only dealing with books before expanding into other categories. Perhaps the most well known niche marketplace is Etsy.

The Growth of Niche Marketplaces

Etsy has been around since 2005 so is certainly not a ‘new kid on the block’ when it comes to eCommerce marketplaces. They have stuck by their handcrafted and vintage niche and even recently announced an incredible amount of opportunity that still lay ahead for them in their 2021 investor pitch.

Etsy has proven that niche marketplaces when run well and focused on both their sellers and customers can thrive in today’s eCommerce climate. Arguably this has led to the rise in more niche marketplaces over the years giving eCommerce businesses more channels to sell on and diversify the risk in their business.

Most of the largest and most popular categories in eCommerce now have a niche marketplace that sellers can use to increase their sales and product visibility. For fashion you have Poshmark, electronics you have Newegg and even recently for cosmetics and beauty you have RealSelf Shop.

The Opportunity For eCommerce Sellers

Amazon and eBay should be the first marketplaces that the majority of eCommerce sellers turn to, however where applicable, utilising a multi-channel software and expanding on to a relevant niche marketplace can be a wise business decision.

Here are 3 reasons why utilising niche marketplaces is a wise decision for eCommerce sellers:

1. Risk Diversity: When selling on marketplaces you have to play by the ever changing rules of the marketplace, which can leave your business in the hands of others. By spreading your business income across more marketplaces you spread the risk to your business, if one of those marketplaces got taken away.
2. Customer Loyalty: Niche marketplaces often have a very loyal consumer base consisting of die hard fans of the types of products you sell. This means that if you can provide a stand out service and product to your customers on the smaller marketplaces means you have a greater chance of retaining return customers and building brand loyalty to your business.
3. Less Saturation: The niche marketplaces offer you an opportunity to compete in a much less saturated market than the likes of eBay and Amazon. With a smaller audience but also lesser competition it gives you more freedom and opportunity to build your business processes and reputation.

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