DISCLAIMERS:

• Information & data are up to end of 2017 fiscal year. Newest data on
Etsy Website only updated to Q3 of 2018
• Limited time of researching
• If any information not clear enough, feel free to ask and discuss
together

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Table of contents:
1. What is Etsy Inc.?
2. Backgrounds of Etsy
3. Financial Performance
4. Vision & Mission
5. Business Model Evaluation
6. Macro- environment evaluation
7. Industry evaluation
8. Internal situation evaluation
9. Recommendations
10. References
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1. What is Etsy?
• Etsy is an e-commerce website focused on handmade or vintage items
and supplies, as well as unique factory-manufactured items
Etsy Amazon Ebay
Products Imaginative products, and permits just All products, including Amazon Marketplace for all
handmade products, craft supplies or products products. Well-known for
antiques older than 20 years connecting sellers and
buyers through online
auction.
Fees $0.2 listing fee per item, 5% percent Individual sellers: $0.99 per The fees do vary based
commission per sale product sold plus fee on the item’s price,
Professional sellers: $39.99 per format, and category
month plus fee
Warehouse No Yes No

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Some best selling items on Etsy:

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2. BACKGROUND OF ETSY
• Founded in Brooklyn, New York in June 2005 by Robert Kalin, Chris Maguire and
Haim Schoppik.
• Online market place for handmade goods and craft supplies
• Etsy – “Etsi” mean “Oh, yes” in Italian.
• 2011, introducing a Facebook-like social networking system called People Search so
that buyers and sellers could connect with one another and become friends.
• Originally for American market, but from 2013, opened up for entrepreneurs
around the world
• IPO in April 2015, raised $237 million in IPO proceed. Etsy’s IPO is the largest IPO till
date for a New York-based venture-backed startup
• 86% sellers are women.

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3. FINANCIAL PERFORMANCE
• 6 primary sources of Etsy’s revenues:
Listing fee paid by Etsy craft artists
Fees paid by Etsy craft artists for each completed transaction
Fees for seller services
Payment processing via Direct Checkout
Purchasing of shipping labels through Etsy’s platform
Fees received from a third-party payment processor

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3. FINANCIAL PERFORMANCE
2017 2016 2015 2014 2013
Gross $3,253,609 $2,841,985 2,388,387 $1,931,981 $1,347,833
merchandise
sale (GMS)
Revenue $441,231 $364,967 $273,499 $195,591 $125,022
Net income $81,800 ($29,901) ($54,063) ($15,243) ($796)
(loss)
Adjusted EBITDA $80,009 $57,124 $31,007 $23,081 $16,947
Active Sellers 1,933 1,748 1,563 1,353 1,074
Active Buyers 33,364 28,566 24,046 19,810 14,032

Data collected from Etsy Inc.’s Annual Reports. Retrieved from : https://investors.etsy.com/financials/quarterly-results/default.aspx

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4. Vision and Mission Statement

Vision statement Effetive elements Shortcomings

The global marketplace for unique - Directional - Too broad

and creative goods. We connect - Focused - Not distinctive
millions of buyers and sellers from
nearly every country in the world
(Etsy, 2017)

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4. Vision and Mission Statement

Mission:
• Keep commerce human
• In expanded form: it’s our mission to keep human connection at the
heart of commerce. That’s why we built a place where creativity lives
and thrives, because it’s powered by people- something special with a
human touch, for those moments in life that deserve imagination

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5. BUSINESS MODEL EVALUATION

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Key Partners Key Activities Value Proposition Customer Customer Segments
• Community & • Community building Buyers: Relationships Buyers:
business alliances • Seller management • Ability to buy unique • Online community • Global
• E-Commerce apps • Buyer management items building & support • Consumers of
ex. Store Ya • Platform development • One of the largest • Seller education unique, handmade,
• Retail design • Data management online community of • Event hosting vintage items
stores Key resources handmade goods in Channels Sellers:
ex. West Elm
• Etsy platform
the world
• Websites • Global>200
• Data • Worldwide shiping • Mobile apps (IOS countries
• Seller community available on most and Android) • Small merchants in
• Buyer community items • Social media the handicraft sector
Sellers:
• Etsy events • Artist who produce
• Simple, robust e- • Local community handicrafts
commerce platform events • Want to sell online
• Access to buyers • Partner programs and earn money
• Easy & secure
payments
• No sign-up fee

Cost structure Revenue Streams

• Platform development • Listing fee: $0.20 per item for 4 months
• Employee salaries • Sales commission: 3.5% of sales revenue 11
Marketing & customer acquisition Advertisement revenue from featured shops
Key Partners Key activities:
• Community & • Community building - Seller and buyer communities: in other words- Etsy community
Business alliance • Seller management
• E-commerce apps • Buyer management
Ex.: Store Ya • Platform development
• Retail design stores • Data management
Ex.: West Elm

Key resources
• Etsy platform
• Data
• Seller community
• Buyer community

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Value Proposition Customer Customer Segments
Buyers: Relationships Buyers:
• Ability to buy unique • Online community • Global
items building & support • Consumers of unique,
• One of the largest • Seller education handmade, vintage
online community of • Event hosting items
handmade goods in the Sellers:
world • Global>200 countries
• Worldwide shipping • Small merchants in • Social media: Facebook, Instagram,
available on most items the handicraft sector Twitter, Pinterest.
Sellers: • Artist who produce • Etsy local events: connect buyers with
• Simple, robust e- Channels handicrafts Etsy sellers
commerce platform • Websites • Want to sell online
• Access to buyers • Mobile apps (IOS and earn money Ex: Craft fairs, markets, pop-up
• Easy & secure payments and Android) shops, special events
• No sign-up fee • Social media
• Etsy events
• Local community
events
• Partner programs

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Cost structure: Revenue Streams
• Platform development • Listing fee: $0.20 per item for 4 months
• Employee salaries • Sales commission: 5% of sales revenue
• Marketing & customer acquisition • Advertisement revenue from featured shops
• Local events

• Etsy’s Advertising Dashboard: Promoted Listings and Google Shopping ads

Promoted Listings: Google Shopping ads

• ‘display a seller's items prominently on Etsy's websites
and mobile apps’
• ‘display a seller's listings directly in Google search results
and through the Google Shopping service’
• ‘comply with Google's policies, including 
Google Shopping policies and 
Google Advertising Program Terms.’

• choose to promote some or all of the listings.

=>Ad fees are charged on a cost-per-click (or "CPC") basis, and sellers are responsible for paying for any clicks their
ad receives.
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6. MACRO—ENVIRONMENT
ANALYSIS

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Etsy PESTEL Analysis
• Political:
o Political disruption
 Promulgating local, national and international regulations-> either directly interferes with or indirectly
undermines Etsy’s business model (Luckman,2013)
o Other political instability or other unexpected events
 ‘Disrupting Etsy’s operations, internet or mobile networks, or the operations of one or more of Etsy’s
third-party service providers’
• Economic:
o Currency exchange rate
 About 85% of Etsy transaction in USD-> appreciation in USD->buying activities on Etsy from other
nations with different currency less favourable and vice vesa
o Deterioration in economic condition
 Decline in consumer discretionary spending-> drop in Etsy’s purchasing activities.

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 Etsy PESTEL Analysis
• Social:
o Self- employment trend
 More people prefer to work for themselves (Etsy, 2017)-> opportunity as Etsy furnishes entrepreneurs with a vehicle to
pursue a new style of livelihood (Zhang, 2014) >< threat because sellers could develop independent websites that gave
them more flexibility and lower fees.
• Technological:
o Cyberattacks
 Issues like the theft of Etsy’s proprietary business methods, intellectual property, telecommunication shutdowns-> loss of
faith in Etsy’s ability of maintaining a secure platform, loss of subscribers and sellers’ business ( Mancino, 2016) as well as
eroding Etsy brand.
• Environmental:
o Natural disasters and other adverse weather and climate conditions.
 Ex: Hurricane Sandy struck the eastern seaboard of New York in October, 2012- Etsy’s headquarters in Brooklyn closed for
5 days (Etsy, 2017)-> a boom in requests for assistance from buyers and sellers.
• Legal:
o US and non-US’s legal framework

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7. INDUSTRY EVALUATION

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 ETSY INDUSTRY ANALYSIS 
USING PORTER’S FIVE FORCES
MODEL 
Threat of
substitutes or
substitution

MODERATE

Competitive Bargaining power

Bargaining power
rivalry or of buyers or
of suppliers
competition customers
WEAK
STRONG STRONG

Threat of new
entrants or new
entry

STRONG
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KEY SUCCESS FACTOR OF ETSY

First mover advantage

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STRATEGIC GROUP MAP OF ETSY

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8. INTERNAL SIATUATION
EVALUATION

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 SWOT ANALYSIS OF ETSY
STRENGTHS WEAKNESSES

• Products are made up of craft goods and • No physical store: Cannot touch and see.
homemade ones. • Customer Service: No direct line and no live
• Etsy is also extremely popular on social media. person contact.
• The vetting process required to actually sell on Etsy. • Authenticity: Verification of product and no
warranty.

OPPOTURNITIES THREATS

• Build stronger engagement with buyers and sellers. • Seller Loyalty

• Redesign customer service. • Future online growth
• Provide brand customization to the sellers for their • Competition
shops.

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COMPETITIVE STRATEGY ANALYSIS

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9. RECOMMENDATIONS
• Partner with logistic companies to strengthen in several areas
• Many users are concern about the protection of their products uniqueness. -> Etsy should do something to
protect small store owners.
• Add more features for sellers to customize their shop
• Develop customer service.
• Increase the appearance in other market, not just focused in US and Europe.
• Stick to their original business plan / model, build another platform for sellers which outsource products from
third parties and factories

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10. REFERENCES:
Etsy - Shop for handmade, vintage, custom, and unique gifts for everyone. (2019). Retrieved from
https://www.etsy.com/

Etsy Looks Way Too Expensive At Current Market Value. (2019). Retrieved from
https://www.forbes.com/sites/greatspeculations/2017/08/31/etsy-looks-way-too-expensive-at-current-market-val
ue/#39f058c621b1

Etsy’s Financial report 2017

Zhang, S. (2014). Successful internet entrepreneurs don't have to be college dropouts: A model for nurturing
college students to become successful internet entrepreneurs. International Journal of Information and
Communication Technology Education, 10(4), pp. 53–69.

Luckman, S. (2013). The aura of the analogue in a digital age: Women's crafts, creative markets and home-based
labour after Etsy. Cultural Studies Review, 19(1), pp. 249–70.

Mancino, M. (2016). Cybersecurity otherwise: Seeking communicative insights. Pennsylvania Communication

Annual, 72(2), pp. 34-58.
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10. REFERENCES:
eMarketer. (2016, Aug 16). Worldwide retail ecommerce sales: The eMarketer forecast for 2016. Available from
https://www.emarketer.com/Report/Worldwide-Retail-Ecommerce-Sales-eMarketer-Forecast-2016/2001849

Erickson, A. & Meyer, I. (2016). Economic security for the gig economy [White paper]. Etsy. Available from
https://extfiles.etsy.com/advocacy/Etsy_EconomicSecurity_2016.pdf

Etsy. (2017a). 2016 annual report. Available from

https://investors.etsy.com/~/media/Files/E/Etsy-IR/annual-report-proxy-materials/etsy-ar2016.pdf

Etsy. (2017b). Notice of 2017 annual meeting of stockholders and proxy statement. Available from
https://investors.etsy.com/~/media/Files/E/Etsy-IR/annual-report-proxy-materials/etsy-proxy-statement-2017.pdf

Hamari, J., Sjöklint, M., & Ukkonen, A. (2016). The sharing economy: Why people participate in collaborative
consumption. Journal of the Association for Information Science and Technology, 67(9), pp. 2047–2059.

Kenney, M. & Zysman, J. (2016). The rise of the platform economy. Issues in Science and Technology, 32(3), pp. 61–
69.

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10. REFERENCES:
Krugh, M. (2014). Joy in labour: The politicization of craft from the arts and crafts movement to Etsy. Canadian
Review of American Studies, 44(2), pp. 281–301.

Statista. (2017). Key demographics of Etsy sellers in the United States as of December 2016. Available from
https://www.statista.com/statistics/447960/us-etsy-seller-demographics/

ETSY Stock Price & News - Etsy Inc. - Wall Street Journal. (2019). Retrieved from https://quotes.wsj.com/ETSY

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Q&A

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