Etsy.com is an e-commerce website where youcan buy and sell handmade or vintage items,art, crafts and supplies all over the world.Thousands of small businesses from aroundthe world come together to form this artsyexplosion of e-commerce.Kathryn Barriger - Marketing 476
StatementsMission:“Our mission is to enable people to make a living making things, andto reconnect makers with buyers.”Vision:“Our vision is to build a new economy and present a better choice:Buy, Sell, and Live Handmade.”Site launched June 18, 2005 and is based in Brooklyn, New York with officesin Hudson, New York; San Francisco, California; and Berlin, Germany.By December of 2010, Etsy had 7 million registered users and $314 million inrevenue.By 2012, sales were up 70%, new buyers increased 80%, and there were 10million new members.Business Overview
• Etsy implements the peer production business model aswell as some decentralized and chaordic activity.• Etsy relies on the collaboration of small business ownersselling through their site to reach the goals of thecompany.• The efforts of a large number of people come togetherto share unique and creative products with people allover the world.• Strong community engagement that attracts new buyersand sellers.• Limited regulation by Etsy.
• Competitors:– E-commerce websites, Ebay, Amazon• Direct Competitors:– DaWanda, Bonanza, Zibbet• Partners:– Thousands of sellers and small businesses worldwide.– Shipping companies (FedEx)– Facebook (“likes”)– Twitter (tweets)– Pinterest (pins, share Etsy sites easily)– Google (Search)– Nordstrom line & West Elm (Etsy Wholesale)
• User base:– Mostly women aged 18-24– People interested in craft, trade, small business andvintage items.• Sellers:– College educated women in their twenties and thirties.
• Stakeholders:– Management– Sellers with an Etsy account– Buyers– Investors• Value:– Wide variety of products all sold on one website.– Unique, handmade, vintage goods.– Convenience.– Supports small businesses and educates sellers.
Peer Production & the eco-system• Peer network business for revenue generation.• Etsy connects buyers and sellers together and takes apercentage of each sale.• The eco-system is a community in which everyone feeds offone another.• The company and the sellers have shared visions and goalsand collaborate together to reach them.
A more social, collaborative way to dobusiness…• Communities and networks become marketsthat drive products and sales through them,creating a profitable eco-system.• This model is not fueled by competition, butmore of a community like atmosphere.• Commerce is being initiated by the communitywith a more bottom-up approach based on realneeds.
Assets and Tools• Favorites– “Like” products and they appear at the top of the site.• Seller ratings and feedback• Company collection of big data• Direct contact with shop owner• Create your own personal page• Blogs• Registry• Mobile Apps– engage in social media– MIXEL (similar to Pinterest)
User to User Distribution• Etsy does not make any products and has no productionmodel. They rely on sellers to provide goods for the buyers.• Individual sellers sell to buyers who seek out theirproducts.• Eliminates the need to hire internal and external marketingstaff.• Seller is responsible for packaging and shipping.
Funding and Revenue• Peer network business for revenue generation. Etsy connectsbuyers and sellers together and takes a percentage of each sale.• Etsy has three sources of revenue:– 20 cent listing fee– 3.5% sales fee– In-house advertising program called the showcase so sellerscan promote their items.– It is smart to have a lower fee so not to drive customers awayto cheaper markets, but still high enough to make profit.– New York-based Etsy has raised about $91 million frominvestors including Index Ventures, Union Square Ventures,and Accel Partners.
Products• Personalized products that are unique, creative and in highdemand.• Customers more willing to search Etsy for meaningful items ratherthan go to big box retailers.• Etsy provides feedback and ratings on how your personal site isdoing.
Intellectual Property and Ownership• Value: Trust, Safety and Governance.• Etsy has an Intellectual Property Policy whichcan be viewed here and has a Copyright.• There is no profit sharing by Etsy, but the sellersdo share a portion of their profits with thecompany.
Niche Goods• Etsy hosts an eclectic mix of thousands ofdifferent small businesses who sell uniqueproducts all over the world.• Each seller has their own niche market, whichallows Etsy to profit off a wide variety of productsareas.• Even though each seller may only sell a few oftheir own products, Etsy gains profits from a verylarge number of different items sold by all sellers.
Profit Sharing and Incentives• Win-win business model. When a sale ismade, both Etsy and the seller make a profitand the buyer receives a product that isdesirable.• Etsy doesn’t have to market, hold inventory,ship merchandise or have buyers andmerchandisers.
Works Cited• http://blog.optimyth.com/2013/01/crowdsourcing-a-viable-alternative-to-software-development-outsourcing• http://www.lumosforbusiness.com/blog/835/14-02-2013/Business+Model+Breakdown++ETSY• http://venturebeat.com/2013/01/28/etsy-2012/• http://www.techvibes.com/blog/intellectual-property-a-growing-legal-concern-for-startups-2011-11-28• http://blog.optimyth.com/2013/01/crowdsourcing-a-viable-alternative-to-software-development-outsourcing• http://www.crunchbase.com/company/etsy