Etsy Business Analysis

Introduction

Etsy’s rise to success comes from their unique ability to connect the buyer to the craftsman. When someone buys a product from Etsy they appreciate that is homemade and comes with a personal story (Blair, 2012) Another component that contributes to its successful strategy is the ease of use for craftsman for new entrepreneurs. Without Etsy many craftsman would not be able to effectively market their products and generate a client base. A demand has grown for those selling on Etsy they have sought out production in other countries. Etsy has evolved their strategy to allow this. The strategies of connecting sellers to handmade items with connected stories have worked well together. (Blair, 2012) Opening up the market to outsourcing

Etsy offers the advantage of connecting the buyer to the story and the make

Supplier Power- (Thompson, et al., 2017) There are many craftsman making similar products. This prevents the supplier’s rom holding too much power. Additionally, Etsy charges the same price $.20 for each item listed, and 3.5% on the sale of each item. The craftsman have no power on the supply cost.

Buyer Power- (Blair, 2012) The buyer power is strong because Ebay still offers the sale of handmade items, and Amazon has recently offered a marketplace offering the same. Some of these products benefit from the Prime 2 day shipping.

Threat of Substitution- (Blair, 2012) The threat of substitution is substantial. Many successful craftsman have started their own business websites after gaining a customer base from Etsy. Others have the options to switch to competitors marketplaces like Amazon and Etsy.

Threat of New Entry- There is no unique advantage or resource that Etsy has that could not easily be incorporated into a new startup. This makes the threat of a new entry very possible and most likely.

Marketplace, Seller Services or

Seller services offer craftsman payment processing, shipping labels and promotional listings. While the marketplace generates revenue from the selling and listing fees. The most revenue, more than 50% is generated from the seller services (Etsy, n.d.). The success of the seller services comes from having a marketplace. Both are required to help Etsy’s future growth and profitability.

Etsy's financial performance over the 2013-2015 period

Etsy has continued to grow in tier financial performance from 2013 to 2015. (Thompson, et al., 2017) They have a significant increase in buyers going from 14 million to 24 million (Thompson, et al., 2017). As well as active sellers who have grown 1.6 billion from 1million. These increases have been reflected in their financial performance, showing significance increase in revenue. (Thompson, et al., 2017) In 2013 it was &125,022 and in 2015 it had grown to $273,499. Their growth has shown a strong positive trend and with the continued growth of both consumers and sellers it should continue in the same direction.

Etsy’s Strategic