Ecommerce merchants looking for additional sales channels might want to consider niche auction and marketplace sites.
There are many niche auction sites owing to the fact that most anyone can create one, just like most anyone can open an eBay account or start an ecommerce store. In fact, to assist people in creating online auction sites, different companies, such as Createauction.com and Instantauctionsites.com, offer auction startup software. Getting buyers to come to a new site can be extremely difficult, though. Merchants should factor in the size of the site’s buyer base before they start selling on it.
Targets interested consumers
In theory, niche sites should be a helpful solution for many ecommerce merchants. Instead of trying to cross-sell to the mass consumer population on auction giants like eBay, niche sites bring products to a group of customers interested specifically in that market. Sellers have the advantage of marketing to a community of buyers who are presumably just as interested in their products as the sellers themselves are.
Here are some questions to consider before selling on niche sites.
Do your products have a niche?
“Many antiques and collectibles dealers left eBay for storefronts on sites like Goantiques.com, Tias.com and Rubylane.com. In other niches, marketplaces have sprung up because eBay does not allow certain items on its site,” said Ina Steiner, a journalist and editor who covers online auctions on her site Auctionbytes.com.
Goantiques.com offers storefronts and auctions to antique sellers. Its president is Jim Kamnikar. “Niche market sites like GoAntiques.com focus on aggregating buyers who are of like mind. (Niche sites are) the best way to hit the correct target market for your inventory,” said Kamnikar.
Keep in mind that while some niche sites can work well for a seller whose products slide comfortably into that niche, a merchant selling products more loosely related may have trouble. For example, selling sewing machines on a niche site for fabrics may not work as well as a site that only sells sewing machines.
Does a good auction or marketplace site exist for your specific niche?
The best niche sites are gathering points for interested parties. For example, if a whole group of button and zipper enthusiasts started spending a lot of time buying, selling and communicating at a certain site, that site would quickly become a center of community for that specific niche.
Before deciding to sell on a site, check out the features that bring in return customers. Can buyers and sellers create accounts on the site? Can buyers subscribe to RSS feeds to let them know what new products are available (check out Goantiques.com for an example of feed use). Are newsletters and blogs in place to generate return traffic? If an auction or marketplace site has these features, chances are that it is in tune with its niche buyers for your products to get seen.
Goantiques.com’s Kamnikar said sellers should look for “traffic and a strong understanding of sales channels” when searching for the perfect niche site.
Another potentially niche is one not covered by eBay, due to its rules and regulations. Sites like Gunbroker.com and Auctionarms.com sell firearms, and since eBay will not allow them on its site, these sites have prospered in the niche online auction market. Take a look at eBay’s prohibited items page. For a seller whose inventory won’t make the eBay cut, a niche auction for these products could be lucrative.
Do you have the time and energy to sell in a niche?
Selling on niche sites will take some work. Merchants who sell on these sites must be aggressive in their marketing techniques. There is also the risk of selling on a site with low traffic, poor search engine optimization and shoddy usability. Also, merchants who use niche auction and marketplaces sites have to keep track of inventory separately from the products sold on their online store and other sales channels.
“Many can no longer sit back and expect to make a healthy profit margin through passively listing,” said Auctionbyte.com’s Steiner. “Sellers need to be more proactive when selling on niche sites, employing marketing techniques such as email marketing, cross-selling and search engine optimization.”
Sometimes that risk can be worth it, according to Steiner. Even if a merchant already has an eBay account, Steiner said he or she can still make use of smaller niche auction sites. They can be utilized in different ways.
“No online auction site competes on the size and scale of eBay, which gets huge amounts of traffic from shoppers. Many sellers have changed their strategy over the years and now use eBay as an advertising and customer-acquisition tool. They build their own websites and sell on multiple channels, including niche sites, in order to get eyeballs,” Steiner said.
Tias.com is a gathering destination for consumers interested in antiques and collectibles, and it allows merchants to build a store on it and also cross-sell items from that store into other channels. Phillip Davies is President of Tias. “Sellers must take more responsibility for their store when selling on a smaller niche site,” said Davies. “It’s your own store, your own brand,” Davies said. “Unlike eBay, it’s your responsibility to generate traffic. If you don’t want to do (the work), don’t sell in a niche.”
In other words, selling on a niche site can put a seller’s indentity on his or her products much more effectively than on a large auction site. While some PowerSellers have built their own brand on eBay, smaller merchants may have an easier time building a customer base on a niche site.
“(Buyers) become your customers, not eBay’s,” Tias.com’s Davies said.
To Sell Or Not To Sell?
Succeeding in a niche site depends on whether a merchant’s products have a niche community, whether there is a viable existing niche site for these products and whether a merchant is willing to do the marketing work it takes to sell on these sites. It also involves, potentially, managing inventory separately from an existing online store and other sales channels. Because of these variables, it’s hard to say whether or not selling on a niche site can be lucrative, but exploring another sales channel can’t hurt.