3 Rules For Creating A Successful Niche Marketplace

We all know the big marketplace players: Amazon, Alibaba and eBay. But this list of superstars has the potential to change as more retailers discover the benefits a marketplace can have on their business. In fact, companies such as Crate&Barrel are putting their own unique spin on the concept, by offering a niche marketplace to further engage with customers.

Niche marketplaces provide a variety of exclusive benefits that consumers may not get on Amazon, including:

  • A carefully curated extended aisle of inventory they won’t find in stores;
  • Access to an online experience similar to what they’d find in-store; and
  • The ability to create a community of like-minded individuals to share product reviews.

As many as 53% of consumers who shop online are already making purchases on marketplaces three or more times a month, according to a 2016 study from Forrester and Mirakl. Additionally, 27% have shopped on more than three different marketplaces, purchasing a variety of products, from apparel and books to electronics.

“We’re noticing a big push to niche marketplaces that have a very specific and unique value proposition, above and beyond huge marketplaces like Amazon and,” said Ben Zifkin, Founder and CEO of Hubba, a B2B network that connects brands with retailers. “We’re also starting to notice a little bit, for the first time, a pull back from the excitement around having to list on Amazon. [Smaller players] care more about some of these boutique retailers and niche marketplaces.”


While marketplaces are a growing but not yet dominant force in the U.S., they offer plenty of potential, which is being proven in other countries. China, for example, sees 90% of e-Commerce sales coming from marketplaces. This is partly a function of Alibaba’s dominance in the country: 75% of the marketplace sales are transacted through Alibaba. But 62% of Chinese e-Commerce retailers sell their products via Amazon China. It’s possible that the growth of niche marketplaces could help U.S. businesses gain traction in the country and beyond in Asia.

Crate&Barrel Niche Marketplace Is An Extended Aisle  

So how does a niche marketplace differ from the big players? The key factor is in the types of products offered. Niche marketplaces offer a curated selection of items that showcase what the brand or retailer stands for.

“We’re at the early stages of seeing the notion of [retailers] either launching or growing a marketplace where all of the products are curated, much like they would be for an in-store experience,” said Josh Wexler, CEO of RevCascade, a marketplace platform provider. “So when a consumer goes to a retailer’s marketplace, they’re seeing products that reflect the sensibility of the retailer. This opens up a pretty massive revenue opportunity for both the retailer and the vendors they sell on their site.”

Crate&Barrel is the perfect example of this. The retailer recently worked with RevCascade to launch its own “Crate&Barrel Exclusive Marketplace,” which can be accessed right from its e-Commerce site. The marketplace features a highly curated yet broad selection of products based on Crate&Barrel’s merchandising expertise.

Crate&Barrel’s marketplace was created to offer customers an extended aisle of unique products, and it includes:

  • Curated products from new brands;
  • New products from existing brands;
  • Additional product categories that complement Crate&Barrel’s existing products;
  • Exclusive products only available on the Crate&Barrel Exclusive Marketplace; and
  • One-of-a-kind, high-end products from designers around the world.

“Our goal is to enhance the moments that matter for our customers,” said Doug Diemoz, CEO of Crate&Barrel in a statement. “By expanding our assortment, we will significantly increase the choices available to our consumers and offer them an extended aisle of beautiful, curated products from the best designers and manufacturers from around the world. All of the new products complement our existing product lines and uphold our commitment to quality, style and customer service.”

The World Is Big Enough For Niche Marketplaces And Big Players

For a retailer looking to follow in Crate&Barrel’s footsteps, it’s important to understand that it’s not necessarily just about competing with the big players. Zifkin illustrated this point in his example of “the cool street in the neighborhood” that competes with giants such as Walmart. The key difference there is the unique experience that the local retailer provides that Walmart can’t.

“A lot of these niche marketplaces are cultivating a community and a great experience,” said Zifkin in an interview with Retail TouchPoints. “So, if I am a consumer, I like going to niche marketplaces because the products and content they curate are related to me, and the information that I care about, such as how it’s made, the eco-commitment, etc. is tailored to me. That’s what niche marketplaces are able to provide.”

This unique experience allows consumers to be a part of a community, he added, where there are reviews and discussions that make people feel like they’re part of a group, versus simply going in and ordering something on Amazon.

“I would say it’s less about competing with Amazon, and more about executing the vision of what your store is about and what your consumers look for from your store,” said Wexler in an interview with Retail TouchPoints. “It’s really more about connecting with your consumer and delivering that [in-store experience] online. And online, it’s so much easier to offer an extended aisle, where the products you’re selling are being fulfilled by your vendors.”

3 Key Pillars Of A Successful Marketplace

If you’re interested in offering shoppers an extended aisle of curated products, note these three pillars shared by Adrien Nussenbaum, U.S. CEO and Co-Founder of Mirakl:

  1. Understand what it means to set up a marketplace. “The first element of a successful marketplace is making sure the organization is aligned with it. Part of it is helping them to realize that having a marketplace does not mean putting a button on a site and allowing people to sell what they want. Our retail clients call it a closed marketplace, as opposed to the open marketplace model that Amazon is. We call it a curated marketplace, where vendors can be selected and the catalog is controlled by the retailer operating the marketplace.”
  2. Find the right technology to operate the marketplace. A lot goes into operating a marketplace, from time-sensitive price information to sending orders to sellers and enforcing quality of service. Technology can help. “All this, at the end of the day, is promises and technology.”
  3. Have a strategy when inviting third-party sellers to join your marketplace. “You are relying on third-party sellers to do the majority of the job, such as pricing products and shipping the products. And you are charging them a commission, so you need to adapt the way you deal with new parties”.

Niche marketplaces have the potential to up the ante on a traditional e-Commerce experience for shoppers. When done right, these marketplaces can deliver a boost in sales and revenue without adding on additional inventory risk. 

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