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Etsy final draft
- 1. ETSY By: Team 4 By : KVM Pavani Dibyanshu Sekhar Sagnik Datta S.Aditya Tamal Adhikari
- 2. ETSY – A Peer to Peer(P2P) e- commerce website focused on handmade items and supplies. – It has an offline store for better service. – It has unique factory-manufactured items. – The items sold on ETSY include art, photography, clothing, jewellery, food, bath and beauty products, quilts, knick-knacks, and toys along with supplies required.
- 4. Inspiration behind the idea? There are two versions to the story:- Kalin needed marketplace for wood-encased computers Simple freelance website building as a project Went offline and went for fairs
- 5. The reason behind Etsy’s Sustainable Growth Having an uncompromising vision Enabling the community to do more Giving back to the world A company culture that drives change Strive for thoughtful growth
- 6. Growth of ETSY It went for IPO'ing in 2015 and The IPO price was $16, but shares were trading above $30 by the end of the first day. In the third quarter of 2016 it reported 33% revenue growth, 19% growth in gross merchandise sales, 50% growth in seller services, and a 110% increase in adjusted EBITDA (with a margin of 14.9%). ETSY has an earnings at an average annual rate of 17.33%. This year, analysts are forecasting earnings increase of 457.14% over last year. Analysts expect earnings growth next year of 17.71% over this year's forecasted earnings.
- 7. Disruption and the companies disrupted. – A variety of products are sold on Etsy, including arts supplies, handmade products and vintage pieces. – Creating a shop is free, but each listing that is posted costs $0.20. – Each listing will remain on the shops page for 4 months, unlike traditional Trade Fairs. – ETSY claims 3.5% of the sale price of each listing. – Provides a global shipping feature.
- 8. Companies Disrupted – Traditional Exhibitions, Trade Fairs, Retailers, Artfire, Yokaboo, Free Craft Fair. – ARTFIRE: Artfire is only for US residents I believe it’s still in it’s Beta testing. – YOKABOO: The most basic version, which is free, allows only 6 product listings. A more decent membership level is the second level. At $25 a month, sellers are entitled to 50 product listings. – FREE CRAFT FAIR: Free Craft Fair is not a real marketplace. Instead, think of it as a website offering directory services for its users.
- 9. Pitfalls • Authenticity – Will the goods bought at etsy will be authentic, is etsy credible enough without any endorsement of any major art galleries, authorities. • Niche segment & hence difficult to find relevant buyers and sellers. • Not heavy traffic flow, hence should be low on revenue.(Charges only 20 Cents per item) • High involvement products such as vintage goods, painting or any other expensive items won’t sell online.
- 10. Revenue Stream Generates revenue primarily from three revenue streams Marketplace : Revenue includes a fee of 3.5% of sale value, which an and a listing fee of 20 cents per item. Seller Services : Etsy's fastest growing revenue stream, includes fees for services such as Promoted Listings, payment processing and purchases of shipping labels through the platform. Other : It includes fees received from third-party payment processors.
- 11. Marketing Strategies Appealing to and connecting an online community and marketplace for the feminist crafter movement. Creating a more economically friendly opportunity than eBay that empowered sellers while riding the back of their anti-consumerist/establishment ethos. Leveraging organic, social and network effects powered by the feminist and art culture crafters that drove massive word of mouth and SEO without spending money. Using engineering and product excellence to create a better shopping and selling experience for independent sellers and their customers.
Editor's Notes
- 16.4$ Etsy is a peer-to-peer e-commerce website where users buy and sell mostly handmade crafts, vintage items, art and photography. It works like a cross between Amazon and eBay but with a focus on unique items as opposed to mass-produced merchandise. The site launched in 1998 and grew steadily over the first decade of the 21st century. The company made its one-millionth sale in 2007, and in 2008 received $27 million in venture capital money. The company announced its IPO in March 2015 and officially went public on April 16 of the same year. After a brief initial surge, the stock began declining, and by mid-June it had fallen below the IPO price of $16 per share. Analyst Matthew Frankel at The Motley Fool ranks Etsy as the worst IPO of 2015. Though the company is still adding users and enjoying robust revenue growth, its earnings were negative in 2015. Moreover, rival Amazon's handmade section, a new offering for 2015, represents a potentially strong competitive threat to Etsy. How a Day Three Investment Would Have Fared One way to determine if you should have invested in a company early is to put yourself in the shoes of an investor who got in shortly after an IPO. If you had invested in Etsy stock on day three, you would be sitting on a sizable loss as of January 2016. In hindsight, buying Etsy shares shortly after the IPO is the absolute worst thing you could have done as an investor. The stock actually enjoyed very brief success after the company went public, and only after an initial sharp rise did it begin its long trek downward. The IPO price was $16, but shares were trading above $30 by the end of the first day. The decline began in earnest on day two. On Etsy's third trading day, April 20, the stock opened $28.77 and closed at $24.90. Assume you purchased your shares toward the end of day three when they were trading at $25. If you had purchased 100 shares, your initial investment would have been $2,500. Over the ensuing nine months, you would have watched and winced as that total steadily declined. As of mid-January 2016, Etsy shares trade for under $7. As of January 2016, your $2,500 investment would be worth under $700. There Is Still Hope Investing is a long-term proposition, and Etsy does not have nearly a lengthy enough track record as a public company for anyone to make an accurate judgment about the stock's long-term prospects. On a 20- or 30-year chart, nine months represents a tiny blip of time. Less than a year of bearish movement could be part of a larger trend, or it could just as easily be a temporary drop for an otherwise bullish stock. Therefore, a long-term investor who took a chance on Etsy after the IPO would be unwise to dump it now, at a substantial loss, simply because it has not lived up to expectations thus far. Look at the graph of any stock that has appreciated over a long period and it rarely, if ever, shows an uninterrupted upward march. Even the most bullish stocks rise in a zig-zag pattern, the long zigs representing price appreciation and the shorter zags indicating temporary pullbacks and corrections. Fundamental analysis of a company through its financial statements and its annual and quarterly reports provides a better picture of its stock's long-term prospects versus examining nine months of price movements. Read more: Etsy: How It's Fared Since Its 2015 IPO (ETSY) | Investopedia http://www.investopedia.com/articles/markets/012716/etsy-how-its-fared-its-2015-ipo-etsy.asp#ixzz4vAjkTocz Follow us: Investopedia on Facebook
- ARTFIRE: Artfire is only for US residents I believe it’s still in it’s Beta testing. YOKABOO: The most basic version, which is free, allows only 6 product listings. A more decent membership level is the second level. At $25 a month, sellers are entitled to 50 product listings. FREE CRAFT FAIR: Free Craft Fair is not a real marketplace. Instead, think of it as a website offering directory services for its users.