Understanding the competition level can help you understand the market better and choose wisely which niche to enter.
Keep in mind that this chapter is about analysing the competition level of a niche, but not analysing individual competitor about their price point, listing quality, etc.
Most of you know that to understand the competition level, you’d need to know how many shops are selling similar products and ranking in the same keyword.
Looking at the number of listings ranking under a certain keyword is one of the ways to have a rough impression of the competition level, but it’s not very accurate because it doesn’t take factors like size of sellers into account.
In my Etsy Niche Discovery System, we will also take into account both the number of big shops in a niche as well as their size.
Etsy Niche Discovery System - Estimating Competition Level
This system helps you estimate competition level of different niches by looking at the number of successful sellers in the niche and how big they are.
You’ll use the number of main competitors in a niche to determine the competition level. The more main competitors sell in a niche, the more competitive the niche is. And the more competitors with high number of sales, the more competitive that niche is.
I recommend using the number of reviews for this method. Although looking at the number of sales would be preferable, it would require clicking into each listing and that would take quite a bit of time. You can speed up the process by looking at the total number of reviews of shops instead. (Some of you may be saying, doesn’t products in different niches have different review rates? That’s true, but for our comparison, we’ll assume most products get a similar review rate to speed up the process.)
The keywords you use to do this analysis should also be the keywords from Chapter 2 (Broad keyword and niche keyword).
Let's use a point system to estimate competition level in a niche. Go through the listings ranking on the first 3 pages of your keyword. Use this point system to look at the Etsy shop's reviews, and calculate the score of a niche.
Here are the points to assign to a shop based on the number of reviews the shop has.
100 - 999 reviews = 1 point
1,000 - 9,999 reviews = 2 points
10,000+ reviews = 3 points
Go through the first 3 pages of the search result under each of your keywords, mark down the number of point with the name of the shop (so that you don’t double count).
Two things to keep in mind:
- Don't double count shops. Mark down the shop names that you have counted to make sure you are only counting each shop once.
- Similar to estimating demand, you should ignore the listings that are ads, and ignore the listings that are actually not related to the keyword.
After going through all 3 pages, add up the total score.
Repeat the process for every keyword that you have (both broad and niche keywords).
Finally, you’d want to rank the number of shops using the point system from the highest number (representing highest level of competition) to the lowest number. Do the ranking separately for broad keyword and niche keyword. So after this step, you should have 2 lists of keywords ranking niches from high to low competition levels.
In the next chapter, we’ll go through how to use the lists of ranking from this chapter and the last chapter to find the best niche to enter.