Etsy: The Niche Market Strategy – Case Study #8

Have you considered creating a niche market for your business? In a way, this is an alternative to the Nintendo Blue Ocean Strategy we have talked about previously.
Think about it, you just created a new brand and right away, you have to face giants that have been in the market for way longer than you. So, how can you fight?
Create a smaller market, your own kingdom, and be the king (or queen, no judgment here!) of it!
The niche market strategy is a common strategy for many businesses, yet a great one used by many giants like Nike or Apple when they started.
Today we are talking about Etsy, the story of a brand that became the number 1 marketplace... for handmade products!

What is Etsy?

niche marketing examples

Established in the US, Etsy is an e-commerce website focused on handmade or vintage items and craft supplies. Sellers have the opportunity to sell handmade products or vintage products (over 20 years old). The categories are quite wide and go from painting to watches, stickers, jewelry...

niche market
Daily, Etsy features different shops to promote the best artists on the platform

Founded in 2005, by Robert Kalin, Chris Maguire, and Haim Schoppik, Etsy means... well nothing really. Kalin explained that they wanted to start a company from scratch so they had to come up with a name for the brand. By watching an Italian TV show, Kalin came with Etsy, similar to "Eh, si" (Italian for "oh, yes").

Since the beginning, Etsy was focused on providing a place to sell hand-made products. The marketplace was popular for the visibility it provided to its sellers with tools such as Flash-based visualizations and taxonomy of categories with tags, quite not common in the past.

In 2008, eBay was in trouble with dissatisfied sellers, people started thinking that Etsy could be a new strong competitor.
Unfortunately, Etsy had its own problems like being US-centric or having a "slow" interface...

Over the next few years, Etsy worked hard on improving the search for online stores by adding a Facebook look-a-like search engine to add people as friends.
They also focused on improving their fraud detection efforts as they got criticized for letting resellers sell on the platform...

Nonetheless, since 2013, Etsy accepted to have factory-made goods and drop shipping, provided the seller either designed or hired designers and that they took "ownership" of the process.

Now, Etsy became an online craft fair worth $195M!

Etsy's Niche Market Strategy

niche examples

People go to eBay or Amazon to purchase literally anything. Sounds great?

Yes and no.

Of course, the traffic for this kind of marketplace is huge as people search for literally anything but mostly for "famous" brands or useful products.
You should also consider that there is a lower rate of conversion (on average) for a general marketplace compared to a specialized marketplace where people have a more clear idea of what they are looking for there.

A Taste of Uniqueness

advantages of niche marketing

Etsy got the great idea to not focus on being a general marketplace but instead being the place to be when you are looking for unique & vintage products.

Of course, most of these products were/are also on eBay and Amazon but the purchase intention and the expectation for a visitor to find something unique on Etsy is what makes the platform successful.

Most of the sellers on Etsy are independent artists. Leading the marketplace to be synonymous with artisanal craftsmanship.

You can guess it, people visit Etsy expecting to find unique products that are not commercially mass-produced.

Sense of Community

One of the great moves of Etsy was the opportunity to share products you purchased or that your self you have in your store.

This was the first stone in the strong community around Etsy, people enjoyed sharing and presenting their discoveries on the platform.

As Robert Kalin said, the success of Etsy comes from many factors but mainly because "many people now want their buying habits to reflect their values."

Why is it great?

Because buyers get the same positive feeling about supporting local businesses and small artists. They will then be more likely to share their experience than when they purchase an SD card on Amazon...

Sellers and buyers feel more connection with Etsy than with other marketplaces as this one is focused on what they like.

This goes as far as Etsy users promoting Etsy outside the community for free!

concentrated niche marketing

For example, Susan Schuman was shocked to discover that her friends never heard of Etsy before so she created a little sign, that she made - "Did you Etsy today?" that you can stick anywhere you want.

A huge success, 250,000 members posted the sign and the hashtag #etsyday became a trending topic on Twitter!

Etsy Marketing budget for this $0!


Creating a niche market strategy, most of the time, can be a better idea than just to go for a generalist market, expecting to target everyone.

The best advantages of a niche business are:

  • You target one main audience so your message will be conveyed the same way to most of your visitors. It also allows them to appreciate each other more as they have similar tastes and habits. ==> easier to create a community around your brand.
  • It is easier to become the number 1 brand in a niche than to be the number 1 everywhere.
    ==> Instead of being one of many, be the one.
  • Most bigger brands started as a niche, this is not a lower strategy.
    Nothing will stop you to develop other niches and markets in the future.
    E.G. Uber started with driving services and now you can order food: 2 different niches...

Etsy is a great example of a brand that is the best in its own market and that is growing to different markets every year.
A niche is finite but starting from one to growing to many later is an infinite strategy.

Apologies for the late case study, we were quite busy last week. The rythm should be back to normal now.

As always, we hope this series of short articles, on marketing ideas and concepts, helps you or refreshes your mind about proven tactics.

If you need help with your niche market strategy or you need a team to take care of your online marketing campaigns, the KD team is there for you!

niche market business
The gold chains are paid by our successful clients of course!

As always, if you need support with your online marketing strategy, you can have a look at our different services or contact us directly if you are already convinced Krows Digital can help you!

more insights