And so it was. Steve Jobs returned to Apple in 1997. Apple was in dire financial straits. Apple had a wide range of products, many of which were doing terribly. A transformation needed to occur - the company needed to narrow its focus to become successful again.
Jobs began by cutting many underperforming products, such as the Macintosh clones and the Newton "PDA." By narrowing its focus, Apple was able to concentrate its resources on creating innovative products.
Jobs began by cutting many underperforming products, such as the Macintosh clones and the Newton "PDA." By narrowing its focus, Apple was able to concentrate its resources on creating innovative products.
Job's new approach helped the company recover from its financial troubles. From the brink! Eventually, Apple became one of the world's most valuable companies (as you likely well know).
Want to gain traction? Narrow the focus of your online marketplace as well:
- You'll have an easier time understanding your target market (yep, it's true). By focusing on a specific niche, you'll better understand the users' preferences (down to their nighttime routine)
- You'll have an easier time differentiating your online marketplace. Your marketplace will be easier to distinguish from larger, more general marketplaces (those crazy ones like Walmart, Amazon, you know …)
- You'll have lower marketing costs (it's hard to market to the whole world)
- You'll have a stronger community. Your niche marketplaces will tend to attract passionate customers (beware of the passionate ones, they can get a bit crazy)
- You'll have less competition
Patagonia did something similar in narrowing its focus. Patagonia decided to focus on a vertical. Specifically, high-quality, environmentally friendly clothing.
Patagonia did something similar in narrowing its focus. Patagonia decided to focus on a vertical. Specifically, high-quality, environmentally friendly clothing.
Patagonia is known for its anti-consumerism stance, as shown in its "Don't Buy This Jacket" campaign. The message behind the campaign is "if you don't need this jacket, don't buy it."
The new focus allowed Patagonia to appeal to a specific and passionate customer base. The focus helped them establish a strong brand.
Online marketplaces are similar. When you're starting, to be successful, you need to focus on a smaller niche. One vertical, one city until you get some traction.
Online marketplaces are similar. When you're starting, to be successful, you need to focus on a smaller niche. One vertical, one city until you get some traction.
Narrowing Your Focus Allows You to Target High-Intent Customers
You can't be all things to everyone. Having a narrow focus allows your marketplace to target a specific audience.
Targeting everyone is a waste of time!
Targeting a specific audience (like a particular niche, city, or product category) makes it easier to market. Competition can be fierce (get your bulletproof vest on).
Ready to fight? Differentiate yourself by creating a smaller platform that caters to high-intent customers.
Your high-intent customer is a person who is actively searching for a product or service. The high-intent customer is likely to make a quick purchase!
Your high-intent customer has a strong desire to buy and is further along in the buying process than a customer with low intent. They may have already done the research and are now comparing options before deciding. You want to capture these.
Your high-intent customer has a strong desire to buy and is further along in the buying process than a customer with low intent. They may have already done the research and are now comparing options before deciding. You want to capture these.
Your online marketplace narrowing its focus is like a laser beam. A laser beam can burn through a piece of wood by focusing all its energy on a tiny point. In the same way, an online marketplace that narrows its focus is more successful by directing all of its resources toward a specific group of customers.
A narrow focus allows the marketplace to target its marketing results in a more profitable and sustainable business in the long run.
It pays to go niche:
- 3% of all visitors who visit a website, view a specific product, and add them to the cart end up proceeding with the checkout. These people are high-intent customers transacting quickly.
- $37 billion is spent (wasted) on ads that do not effectively reach or engage their target audience (Marketing Evolution report).
- 80% of consumers report that they are inclined to conduct business with a company that provides personalized interactions (Epsilon survey).
- 63% of consumers will refrain from purchasing from brands that use poor personalization strategies (Smart Insights).
How to start?
- Identify your target audience by understanding your ideal customer.
- Create a clear and compelling message that communicates value.
- Use vertical marketing channels that are most likely to reach your audience
Narrowing Your Focus Develops a Strong Brand
A narrow focus on your online marketplace facilitates the development of a strong brand.
By focusing on a niche, you establish yourself as an expert.
You will see several outcomes:
- Increased sales by becoming a trusted source for a specific product
- Ease in scalability from having a better understanding of its target market
Again, a narrow focus is like a sharpened arrow. The arrow might not cover as much ground as a broad focus. Still, you'll hit your target with precision and power. You'll create a strong brand, an unshakable brand.
Focussed online marketplaces scale faster:
- 209% revenue increase for Cazoo from 2020 to 2022 (niche retailer)
- $74.6 million to $2.3 billion revenue growth for Etsy from 2012 to 2021
- $10.3 billion revenue increase of Airbnb from 2020 to 2021
- 9% growth prediction for niche marketplaces (Multi-Vendor X)
Need to grow your online brand? Start here:
- Develop a unique value proposition that communicates your benefits.
- Invest in marketing and advertising to build better brand awareness
Narrowing Your Focus Reduces Your Competition
Narrowing focus on your online marketplace reduces competition.
By focusing on a smaller segment of the market, there is likely to be less competition.
An online marketplace that narrows its focus to reduce competition is like a chef specializing in a specific type of cuisine. The chef who specializes becomes known for their expertise. They draw diners looking for the best of that type of food (wins the niche every time). They become a celebrity.
An online marketplace that narrows its focus to reduce competition is like a chef specializing in a specific type of cuisine. The chef who specializes becomes known for their expertise. They draw diners looking for the best of that type of food (wins the niche every time). They become a celebrity.
An online marketplace that specializes (becomes a celebrity chef) wins the contest every time.
Growth for online "niche" marketplaces can explode:
- 40% to 90% year-over-year revenue growth for Thrive Market. A natural and organic online marketplace.
- 3 million active sellers joined Etsy from 2020 to 2021.
Etsy is an online marketplace focusing only on handmade, vintage, and craft items. By narrowing its focus, Etsy attracted a dedicated customer base of people looking for unique, handmade items. Etsy's brand was strong enough to compete with "all in one" marketplaces like Amazon.
Etsy is an online marketplace focusing only on handmade, vintage, and craft items. By narrowing its focus, Etsy attracted a dedicated customer base of people looking for unique, handmade items. Etsy's brand was strong enough to compete with "all in one" marketplaces like Amazon.
Want to be like Etsy?
- Conduct market research to identify your niche.
- Refine the product offerings to align with the niche.
- Develop a unique brand identity that is aligned.
- Optimize your marketing efforts to target the niche.
Niche Marketplaces in 2026: Three Lessons from the Last Three Years
Some of the examples above have had very different fortunes since this article was written in 2023. Looking at what happened next makes the case for focus sharper. It also shows where focus alone is not enough.
| Company | What happened | Lesson |
|---|---|---|
| Cazoo (used cars, UK) | Listed in New York at an $8 billion valuation in August 2021, then lost over 97% of its market value. It stopped buying and selling cars in March 2024 and went into administration on May 21, 2024. MOTORS bought the brand and relaunched it as a platform for dealers (Wikipedia, Cazoo). | A niche does not save a business model that buys and holds stock. The surviving brand is a platform for dealers, not a retailer. |
| Vinted (secondhand fashion, Europe) | GMV grew 47% to €10.8 billion in 2025, with €1.1 billion in revenue and €62 million in net profit (Vinted 2025 results, April 9, 2026) | A tightly focused vertical can still grow fast at scale. Vinted kept strengthening its core fashion categories while adding neighbouring ones such as sports and collectables. |
| Etsy (handmade and vintage) | At the end of 2025 the marketplace had 5.6 million active sellers (-1.5%) and 86.5 million active buyers (-3.4%). Etsy marketplace sales (GMS) were $10.46 billion for the year, down 0.7% (Etsy FY2025 results, February 19, 2026). Etsy then sold Depop to eBay for about $1.2 billion, closing in July 2026 (Wikipedia, Etsy). | A niche brand has to be defended. Growth stalls once buyers stop seeing a clear reason to choose you over a general marketplace. |
Lesson 1: Narrow focus plus a light business model
Cazoo had a clear niche but bought and reconditioned its own cars, which took a lot of capital. A marketplace that connects buyers and sellers without owning stock keeps its costs flexible, and that is the form in which the Cazoo brand survives today.
Lesson 2: Go deep before you go wide
Vinted kept investing in its core categories, such as women's and kids' clothing, while it expanded into neighbouring ones. If your marketplace serves one city or one vertical, the goal is to become the obvious place for that need before you launch the next category.
Lesson 3: Guard what makes you different
Etsy's flat 2025 shows that even a well-known niche brand has to keep its edge. Write down what is in and out of scope, enforce it in moderation, and say no to listings that would turn you into a general marketplace.
How to check a niche before you build
- Search demand: people should already be searching for what you list, for example "used tractors [region]".
- Underserved users: find a group the big generalists serve badly, for example with no filters for mileage, bedrooms or certifications.
- Supply you can reach: make sure you can personally recruit your first 50-100 sellers or listings.
- A way to earn money: featured listings, paid categories or seller memberships work at small scale without taking a cut of every sale.
Testing a niche no longer needs a development budget. Hosted tools such as Yclas let you set up niche-specific custom fields and nested categories and test demand during a 15-day free trial.
Summary
In conclusion, there are several reasons to narrow your online marketplace focus.
By targeting a specific audience:
- You can cater and market to your user's unique needs.
- You can develop a strong brand for your marketplace.
- You can compete more efficiently with more prominent brands
What's your experience been?
- What is your favorite vertical marketplace?
- What's a unique online marketplace you know?
- Do you prefer shopping in niched marketplaces? Why or why not?
