What It Takes to Succeed on Niche Marketplaces

Competition in eCommerce is fierce, especially since the COVID-19 pandemic. Consumers are buying online more often, while retailers and small businesses are relying more heavily on online sales strategies to supplement lost revenue. 

To succeed as an online seller, you need to use innovative business ideas and stand out among your competition—or drastically reduce the competition and find a niche. One way is selling in niche product categories, and another is selling in niche marketplaces. 

In this guide, we’ll break down everything you need to know to choose a niche marketplace platform that’s right for you. 

Why Sell in a Niche Marketplace?

There are millions of success stories from people selling online, many of them on sites like Amazon. After all, the online giant has cornered the lion’s share of eCommerce sales with 38% of the market. That means more potential eyeballs on your product listings than you can get on your own website. However, millions of other third-party Amazon sellers are trying to leverage those same eyeballs—over one million new sellers already this year

You’ll face heavy competition on top marketplaces like Amazon, Walmart, or eBay. In contrast, selling in niche marketplaces increases your sales chances. Generally speaking, there will be fewer sellers and more eager customers seeking unique or specific items. 

Profitable Niches: Marketing Strategies

No matter where you sell online, you need to implement smart selling strategies to give you a competitive edge. To find success with your niche business, follow these tips:

Defining your target audience

Whom does your niche marketplace serve? What types of products are they interested in buying? How can you add value with your own products? How can you find your target audience?

Use high-quality media

You don’t need a professional photographer for your products. But you do need images that ideally show your items in terms of color, function, and scale. Opt for high-resolution images and videos that show your product close up and in a natural, everyday setting. 

Consider adding videos to illustrate the product. Since your buyers won’t get to see, touch, or try on your product before buying, video walkarounds will help them understand what they’re buying.

Adjust listings for SEO

Use relevant keywords, categories, search terms, and tags, following these eCommerce SEO tips.

Personalize your shop

Your shop profile allows you to tell your story and humanize your business. Be personal enough to make connections with your customer base. Post photos and talk about why your products and services mean so much to you—and why they’ll add value to your customer.

Use outside channels

Promote your eCommerce shop on different types of social media (check out our guide to TikTok for eCommerce businesses). Consider starting a blog to establish your brand further, and build an email list to boost engagement and sales.

Prioritize customer service

Be responsive to customer questions or issues and offer competitive shipping options like fast-and-free shipping. Give buyers multiple payment options, send timely order updates, and do things like adding a handwritten note to each package. If you can delight your customers, you increase your odds of positive reviews, repeat business, and referrals.

Common Niche Marketplaces to Consider 

Now that you know some key selling strategies that can set you apart on niche marketplaces, it’s time to evaluate your options. Here’s the rundown on eight niche marketplaces, what customers they cater to, and the pros and cons of selling on them.

1. Etsy

Etsy is the go-to marketplace for artisans to sell crafts, supplies, and vintage goods. They consider themselves “the creative marketplace” and cater to millions of shoppers each year. Learn more about their selling program.

Etsy-specific resources

Join the Etsy community, a place for Etsy sellers to collaborate, participate in forum discussions, and more. Their community provides great chances to network and get more visibility for your shop. 

Etsy Pros:

Reach

Millions of shoppers come to Etsy every year.

Built-in buyer interest

Buyers on Etsy are usually looking for something specific and unique, so if they find your listing, you’re more likely to make a sale. This is particularly true of seasonal products like wedding items, bachelorette party accessories, holiday gifts, or seasonal decorations. 

Seller-friendly tools

Use the Sell on Etsy app to manage your orders from anywhere, at any time. You can also build a custom website that Etsy powers.

Etsy Cons:

Product restrictions 

You can only sell handmade items, vintage goods over 20 years old, or craft supplies.

Competition

There are 1.8 million sellers already on Etsy. It can be hard to get noticed if you don’t pay to boost your listings. 

2. The RealReal

The RealReal is an online luxury consignment shop on a mission to extend the life cycle of luxury goods. Learn more about selling on The RealReal.

RealReal-specific selling strategies

Try reselling items from top-selling fashion brands—like Chanel, Louis Vuitton, Christian Louboutin, and Gucci. Ensure they are 100% authentic and in the best possible condition, such as like-new or with tags.

The RealReal Pros:

Fast sales

According to their website, most items sell within 30 days.

High margins

You could earn up to 85% of the final price.

Minimal work

Their team of 100+ experts will list and sell the items for you, taking quality photos and handling product storage, shipping and fulfillment, and more.

The RealReal Cons:

Restrictions

They only resell luxury items. Still, they accept many luxury brands and categories

Little control

The RealReal sets prices for your items, and they often run sales, which means your item could sell for much less than you’d like—and you’ll make less commission as a result. 

They also might not list everything you send. So after you mail the items, you have to hope they bring a reasonable price while waiting for the RealReal to send back whatever they didn’t list.

3. Wayfair

Wayfair is the largest online home store selling “a zillion things home.” Click here to learn how to sell on Wayfair.

Wayfair-specific selling strategies

Because the competition on Wayfair is so fierce, you should prioritize your SEO strategy. That way, your listings make it to the top of search results.

Wayfair Pros

Reach and opportunity

Wayfair has more than 19 million customers that have spent $8 billion in the last year.

No fees

Wayfair doesn’t charge fees like other traditional marketplaces. Instead, they operate on a wholesale cost model and pay sellers the wholesale cost of their items. Then, they set the retail price and pocket the difference.

No shipping cost

Wayfair follows the dropship model, so they’ll send a customer order directly to your warehouse for you to pick, pack, and ship. Wayfair arranges and pays for the entire shipping cost.

Wayfair Cons

Competition

They sell millions of products and host over 5,000 different furniture, lighting, and cookware brands. 

No price control

Wayfair sets the retail price for your products.

No warehouse

Because they run on a dropship model, they do not have a warehouse for you to store your inventory. It’s up to you to find a warehouse or fulfillment center.

4. Houzz

Houzz connects homeowners and home professionals with the tools, resources, and products they need to build their dream homes. To start selling your products on Houzz, follow the simple steps outlined here; for Houzz merchant questions, check out their FAQs.

Houzz-specific selling strategies

Houzz merchants get a Seller Score that indicates your success in driving sales and delighting customers. Houzz rewards sellers with high scores. To keep your score high, follow these tips.

Houzz Pros

Less competition

As of 2019, there were only 20,000 active sellers on Houzz.

Price control

You have complete control over your prices and shipping charges. If you’re not sure where to start, Houzz’s support team can offer guidance.

Houzz Cons

No warehouse

Houzz uses a dropshipping model, so they don’t have a warehouse for your merchandise or provide shipping labels. As a seller, you’re responsible for your own shipping charges and fulfillment processes.

5. Newegg

Newegg is the #1 global tech marketplace. Newegg buyers are generally looking for new, used, or refurbished electronics such as computer systems, gaming items, and more. While Newegg has traditionally been a technology marketplace, they now allow third-party sellers to list items in almost every category. Learn about selling on Newegg and how commissions work.

Newegg-specific selling strategies

Newegg, along with ChannelAdvisor, published a guide on six ways to increase sales on Newegg. Check it out for some great selling tips.

Newegg Pros

Global reach

Newegg reaches over 40 million customers across 20 countries.

Embedded financing options

Newegg sellers can opt to get paid the next day, every day for their sales. They can also get a capital advance based on future sales with Newegg Capital, powered by Payability

Discounted fulfillment services

If you choose, Newegg will house your inventory and pick, pack, and ship orders on your behalf with Shipped by Newegg.

Advanced marketing tools

Newegg can help you build your brand and drive sales with its full suite of marketing tools. These include video tools, sponsored advertising options, email marketing, and more

Newegg Cons:

Delayed payment terms

Many marketplaces, including Amazon, pay sellers on delayed terms. This delay makes sure customers are satisfied with the items and helps prevent fraud. However, it can be a cash flow constraint to sellers who want to restock and reinvest in their business. Learn more about how Newegg’s payment terms work and how you can get paid every day for your Newegg sales using Newegg Capital

6. Reverb

Reverb is an online marketplace for musicians and music enthusiasts to buy and sell used and new instruments and other music gear. Read this guide on successfully selling with Reverb.

Reverb-specific selling strategies

Reverb recommends taking well-lit photos, writing detailed product descriptions, pricing competitively, and allowing buyers to send you offers. About half of all sellers’ counter offers result in a sale.

Reverb Pros

Free to list

There is no fee to list an instrument for sale on Reverb. Once it sells, they’ll deduct their fees, which typically amount to 7.7% of the selling price + $0.25.

Reach

Few eCommerce sites limit themselves only to musical instruments. As a result, millions of prospective buyers from all over the world are searching for gear on Reverb.

Support

If you have any questions about your instruments or selling in general, Reverb has a team of gear experts ready to help you make a sale.

Reverb Cons

Low-ball offers

Reverb sellers have noted in online forums that they often get low-ball offers from potential buyers. Some sellers price their items 20% higher than their lowest price to combat these and get an acceptable offer. 

Payment holds

When you start selling on Reverb, they may withhold payment for a few orders or until a buyer signs off on the item they received.  

7. Amazon Handmade

Amazon Handmade is the eCommerce giant’s version of Etsy, an “artisan-only” community of sellers. Learn about selling on Amazon Handmade.

Amazon Handmade-specific selling strategies

Leverage Amazon Handmade’s Artisan Profile, a personalized page you can use to tell your story. Regular Amazon sellers do not have this option. It’s an excellent chance to introduce yourself and humanize your brand and products.

Amazon Handmade Pros

Transparent fees

Creating a shop and listing products on Amazon Handmade is entirely free. When you make a sale, Amazon deducts a 15% referral fee.

Custom URL

You’ll get a custom Amazon URL to make it easy for your customers to visit and find your shop.

Amazon’s reach

Amazon is the largest global eCommerce site, putting millions of potential customers at your disposal.

Profitability

According to Jungle Scout, 33% of Handmade sellers have profit margins above 20%.

Amazon Prime benefits

You can opt to use Amazon FBA and get the Amazon Prime badge for your Amazon Handmade shop.

Amazon Handmade Cons

Competition

Not only are there millions of third-party sellers on Amazon, but you also have to contend with Etsy. Etsy firmly established itself as the go-to place for handmade goods, so consumers might search there before Amazon Handmade.

Amazon owns customer relationships

Amazon has ownership over your customers, which means you cannot contact your customers outside of Amazon. For example, you can’t take their email address and add it to your mailing list.

Long(ish) approval process

Amazon vets all Handmade candidates to ensure that their business is authentic and that their products are, in fact, hand-made. This process can take a few weeks.

8. CrateJoy

CrateJoy is the all-in-one subscription box eCommerce platform. According to their website, they are the first and only marketplace for subscription box entrepreneurs. Learn more about selling on CrateJoy.

CrateJoy-specific selling strategies

To stand out on the CrateJoy marketplace, follow their 5 tips to improve your listings.

CrateJoy Pros

No monthly fees

You don’t have to pay a monthly membership fee to sell through CrateJoy. Instead, CrateJoy charges 11.25% per transaction, plus payment processing fees.

Reach

CrateJoy gets 4 million monthly page views and 30,000+ monthly sales, including from pet owners looking to spoil their furbabies. 

Business support

CrateJoy offers built-in tools and marketing support to help you grow your subscription box business.

Niche-specific

The people shopping on CrateJoy are specifically looking to buy subscription boxes. So if you’re selling them, you’ll immediately have a very relevant audience. 

CrateJoy Cons

You still manage everything

CrateJoy provides a destination for you to market and sell your subscription boxes. Still, they don’t fulfill any of your orders. You’re responsible for curating, packaging, and shipping all packages. 

Next steps

As you can see, there are a variety of eCommerce platforms and niche marketplaces to leverage for your online business models. No matter which target markets you choose, you’ll want to follow our strategies to gain a competitive edge. As you grow, you might need assistance with cash flow. If so, Payability can help. 

We help all kinds of eCommerce sellers—on platforms from Amazon to Newegg—get paid daily on their sales with Instant Access. Or, get an advance based on future eCommerce sales with our Instant Advance. There are no credit checks, since we base approval on account health and sales performance.

Victoria Sullivan
Victoria Sullivan is a Marketing Manager at Payability. She has over eight years of social media, copywriting and marketing experience. Prior to joining the Payability team, Victoria developed social media content and strategies for top technology brands such as Skype and Samsung. She holds a degree in Advertising from Syracuse University’s S.I. Newhouse School of Public Communications. She can often be found in a yoga class or working on her fashion blog.

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