Etsy is an e-commerce website that connects thousands of small businesses and sellers worldwide to sell handmade, vintage and craft items. Sellers create their own shops on Etsy to offer unique products in niche markets. Etsy takes a small percentage of each sale as revenue while providing tools to help sellers promote their businesses and interact with buyers. This peer-to-peer marketplace model has experienced rapid growth, generating over $300 million in sales by 2010 through the collaborative efforts of its global community of users.

1. Etsy.com is an e-commerce website where you
can buy and sell handmade or vintage items,
art, crafts and supplies all over the world.
Thousands of small businesses from around
the world come together to form this artsy
explosion of e-commerce.
Kathryn Barriger - Marketing 476

2. Statements
Mission:
“Our mission is to enable people to make a living making things, and
to 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 offices
in Hudson, New York; San Francisco, California; and Berlin, Germany.
By December of 2010, Etsy had 7 million registered users and $314 million in
revenue.
By 2012, sales were up 70%, new buyers increased 80%, and there were 10
million new members.
Business Overview

3. • Etsy implements the peer production business model as
well as some decentralized and chaordic activity.
• Etsy relies on the collaboration of small business owners
selling through their site to reach the goals of the
company.
• The efforts of a large number of people come together
to share unique and creative products with people all
over the world.
• Strong community engagement that attracts new buyers
and sellers.
• Limited regulation by Etsy.

4. • 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)

5. • User base:
– Mostly women aged 18-24
– People interested in craft, trade, small business and
vintage items.
• Sellers:
– College educated women in their twenties and thirties.

6. • 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.

7. Peer Production & the eco-system
• Peer network business for revenue generation.
• Etsy connects buyers and sellers together and takes a
percentage of each sale.
• The eco-system is a community in which everyone feeds off
one another.
• The company and the sellers have shared visions and goals
and collaborate together to reach them.

8. A more social, collaborative way to do
business…
• Communities and networks become markets
that drive products and sales through them,
creating a profitable eco-system.
• This model is not fueled by competition, but
more of a community like atmosphere.
• Commerce is being initiated by the community
with a more bottom-up approach based on real
needs.

9. 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)

10. User to User Distribution
• Etsy does not make any products and has no production
model. They rely on sellers to provide goods for the buyers.
• Individual sellers sell to buyers who seek out their
products.
• Eliminates the need to hire internal and external marketing
staff.
• Seller is responsible for packaging and shipping.

11. Funding and Revenue
• Peer network business for revenue generation. Etsy connects
buyers 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 sellers
can promote their items.
– It is smart to have a lower fee so not to drive customers away
to cheaper markets, but still high enough to make profit.
– New York-based Etsy has raised about $91 million from
investors including Index Ventures, Union Square Ventures,
and Accel Partners.

13. Products
• Personalized products that are unique, creative and in high
demand.
• Customers more willing to search Etsy for meaningful items rather
than go to big box retailers.
• Etsy provides feedback and ratings on how your personal site is
doing.

14. Intellectual Property and Ownership
• Value: Trust, Safety and Governance.
• Etsy has an Intellectual Property Policy which
can be viewed here and has a Copyright.
• There is no profit sharing by Etsy, but the sellers
do share a portion of their profits with the
company.

15. Niche Goods
• Etsy hosts an eclectic mix of thousands of
different small businesses who sell unique
products all over the world.
• Each seller has their own niche market, which
allows Etsy to profit off a wide variety of products
areas.
• Even though each seller may only sell a few of
their own products, Etsy gains profits from a very
large number of different items sold by all sellers.

16. Profit Sharing and Incentives
• Win-win business model. When a sale is
made, both Etsy and the seller make a profit
and the buyer receives a product that is
desirable.
• Etsy doesn’t have to market, hold inventory,
ship merchandise or have buyers and
merchandisers.

17. 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