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A niche market is a small area of a specific market on which an Etsy seller might focus to meet a need that has not yet been met. It’s important in a marketplace as large as Etsy to find a niche within your area of expertise to help yourself stand out, but this is easier said than done. Niche marketing for Etsy sellers is in some ways the hardest part of being an Etsy seller and one that many sellers overlook. It involves thinking outside of the box and problem solving, and often comes means a greater initial struggle with marketing and getting your product seen. However, if you are successful finding a niche, you may go from being a small handmade shop to something you might see being pitched on Shark Tank.
Testing the Etsy Market
As I discussed in Etsy Tip #1 – Be Original, there are so many competitors in the Etsy marketplace for cliché handmade goods. The marketplace is swamped with jewelry, baby items, clay items, wedding items, etc. which is great for buyers but not as much for sellers. To begin finding your niche, think about the things you have made and how people have reacted to them. Have people ever told you that something you’ve made was unique, something they’d never seen before, or really creative? Not that they admired your skill or ability to do it, but the product itself was something truly special? If not, don’t despair, but if so, this is where you should put your focus. Make a list of these things and do some market research.
One of the products I initially started with was a fabric covered party hat. At the time these were relatively rare on Etsy, so these ended up really helping my shop take off. I also started offering pennant banners and appealing to moms and photographers who wanted cute first birthday photoshoot props. While I was making these, I realized that the iron on appliques I was using to make them were really cute as t-shirt decorations and so I put up a listing offering a group of them for a baby shower craft station. At the time there wasn’t really anyone offering these sets on Etsy.
Listen to Your Customers
Luckily I attracted a buyer who wanted me to make a set of them for her sister’s baby shower and she wanted me to go get the bodysuits for her and sell everything as a set so it was ready to go right out of the box. This was something I hadn’t considered, but obviously there was a market out there for people who wanted a cute DIY baby station, but didn’t want to do the creative end of making decorations or the shopping and prepping of items to decorate. Literally no one else on Etsy was doing this at the time, so this is how I came across my niche market. Along the way, I learned that a lot of people wanted just the appliques, some people wanted applique sheets that people could just draw on and cut out, and some people wanted the whole package. So I ended up adding all three to my shop. The party banners and hats that I was making were taking more time and had less of a return, so I let those go by the wayside and just focused on the iron on appliques. Eventually I limited my offerings to just appliques, but this was because I have had to keep my shop somewhat small to balance the other obligations in my life. If I decide to grow my shop larger in the future, I feel confident that I can.
What to do if your niche gets too crowded
As you become successful in your niche, you are guaranteed to gain competition. Competition is not always a bad thing. Other sellers may be bringing awareness to the niche market, and they can also encourage you to up your game. What can you offer that they are not offering? What can you do to make your products even better? One thing I definitely discourage you from doing if you find that others are crowding your niche is lowering your prices. DO NOT lower your prices in a case like this. In fact, you may consider raising them. Since I began selling iron on appliques for baby shower craft stations, a lot of other people have as well, and many of them sell for a much lower cost. But I didn’t lower my prices to compete with them for several reasons. One, I consider my products to be better quality and the service and expertise I provide to be worth the cost to my customers. Two, I’ve realized that it is not worth my time to sell my items at a lower cost than what I currently do. And three, I’ve found that lower costs turns off the customers I do want (those looking for custom, boutique-style items who are willing to pay more) and attracts customers I don’t want (those who demand a lot of attention, want lower prices, and are more likely to be dissatisfied or find fault). If your niche becomes crowded I recommend doing the following:
- Rise to the top – Increase your prices and offer things buyers want like customization and personalized attention
- Be inventive – alter your product offerings to fit current trends, or set new trends by making your product just a little bit better or different than your competitors
- Develop a unique style – try using a new material, altering your color scheme, or presenting your item in a unique way.
- Connect with competitors – you may find that you’re swamped with orders and just can’t meet all of your customers’ needs. It’s always nice to have someone whose work you admire to send referrals to. Who knows, maybe they’ll return the favor.
Analyze Your Worst Sellers
Not every item I listed on Etsy was a success. I tried selling other things as well. Initially, I had some handmade cards listed (never sold any) and for a while I experimented with hair clips, but the market there was swamped and they were expensive to ship which was a turnoff for buyers. As I mentioned in Tip #1- Be Original, just because you can make it doesn’t mean you should sell it. There are going to be missteps along the way. There are going to be items that don’t sell. You need to periodically take a look at your statistics and see what isn’t selling or what isn’t getting any traffic. Then either improve those items or ditch them. You need to be able to step back from your shop and be a little objective. At a certain point, relisting an item over and over gets costly. You’ve already put a lot of time and energy into making and marketing it. Consider it a loss and a learning experience, and maybe find someone who might like it as a gift.
Sadly, this may happen with your Etsy shop as a whole. There are sellers who are on Etsy for months, even years, and just don’t make sales. As difficult as this may be, our failures are often our greatest learning experiences. But to be able to learn from the experience, you need to be able to step away emotionally and question why things aren’t working. Sometimes it’s not the product itself, but your photos or your descriptions. I saw a beautiful Etsy shop the other day with really unique items and beautiful photography. On the surface she seemed to be doing everything right. She’d even found a niche! But her items weren’t getting noticed. There were some tweaks she could do with her SEO (search engine optimization, or keywords which I will talk more about in a future blog post) but overall she was doing everything by the book and just not as successful as she had hoped. Ultimately I think she may have chosen too small a niche, which leads to my next point.
What to do if your niche is too specific
If you are finding yourself in this situation where you seem to have done everything right, but you’re still not making a lot of sales, you may have too small of a niche, or Etsy may not be the right place for you to be marketing. What if you make items for a customer base that has just never heard of Etsy? You may still want to sell your items on Etsy (after all, if you make your own website, you’re going to have to reinvent the wheel a bit and Etsy still has a lot to offer) but you may have to educate your customer base on where to find these items. You may consider going to conventions, or advertising on niche websites or in magazines your customers are already reading. Try connecting with your potential customers through Facebook groups, forums, or Meetup groups.
While niche marketing for your Etsy shop is essential, it also shows one of the limitations of not just Etsy, but handmade goods as a whole. Unfortunately, you can only find a limited amount of financial success selling handmade goods. Be sure to check back for Tip #5- Invest Carefully!
I hope you’ve found this information on niche marketing helpful. For more Etsy tips, check out my other blog posts: