Monday, July 16, 2007

Attack of the Verticals!

They're coming! Those wonderful little niche sites that are taking little bits and pieces away from eBay. StubHub was the first to see eBay gold, who's next?

My bet is a little site called Etsy.com "Your place to buy & sell all things handmade" Etsy, is hitting on all cylinders right now and gaining traction. Handmade items of all kinds have been selling on eBay for years but Etsy has taken a good portion of that business, in fact many bloggers already call Etsy the eBay for handcrafters.

This appears to be the model to compete against eBay. Target a segment of eBay that is not performing well, build a community of loyal buyers and sellers and grow it organically. At some point eBay will realize they've been beat and move to buy you. My guess is that Etsy's payday will come sooner than most think. Perhaps by the end of the year.

Of course they could take the approach of Craig Newmark of Craig's List fame and rebuff eBay at every turn but my guess is Etsy management is not in this for their health, so at some point they will want their payday. Update: I came across this nice article in Business Week regarding Etsy and its founder. It makes for an interesting read. Etsy may be too small for eBay at this point but so was Stumble Upon and StubHub at one time.

First StubHub and soon Etsy, what other site out there will be the next to mine eBay gold by following a simple business plan?

Any startups out their looking for their place in line follow these simple guidelines. Target an under performing segment of eBay, build a solid group of loyal sellers and soon eBay will be knocking on your door.

IMO, eBay can't create anything on their own anymore (see Express) they have to buy it now.

3 comments:

Sue said...

Cool. I get a free "set up your own auction site" thingy with my web hosting. I'll be a millionaire by Xmas :-D

Randy Smythe said...

Now Sue, you know Auctions are dead.

But maybe a Beads Vertical would work? :-)

Sue said...

There already is one -
http://www.justbeads.com/

I have a couple of ideas. But I'm also lazy, so, you know, the ideas may go nowhere :-D