Etsy first
caught my attention when, after seeing a necklace on a blog, I decided to
Google the description and see what showed up. The real necklace showed up as
one of the top results for $250, and right next to it a necklace that looked
satisfyingly like it for $35 that was being sold at Etsy. This was the start of
my love affair with the website.
Etsy.com is an
online marketplace for handmade goods. Items sold on the e-commerce site are
included in the categories of art, photography, clothing, jewelry, food, bath
and beauty products, quilts, knick-knacks, and toys. You can even sell/buy
craft supplies and vintage items!
For $0.20 an
item, and 3.5% of the sale, sellers can list their products, and customers can
search by category or through a highly effective search bar. The website was
launched in 2008, and from it’s inception it has provided a platform to
entrepreneurs to reach a wide collection of clients. Sellers range from college
students creating jewelry in their dorm rooms to artists selling unique
paintings and prints. The rise of online shopping has made possible the 1
million active sellers and the $895 million they made in the marketplace in
2012.
Etsy.com is
positioned uniquely in the market since it was one of the first to support
micro-producers and provide a platform to purchase directly from them. That’s
not to say there is no competition. Amazon and eBay provide a less specialized
but highly visible platform for similar activities. After Etsy, at least half a
dozen websites based in different countries around the globe have followed in
the same business model- although most specialize on different things (for
example, Tiendie focuses on technology and electronics). Etsy is also special
in that most of their rhetoric has the sellers as the protagonist and not the
buyers. Their purposed is focused on providing a platform that provides artists
with an opportunity to validate their craft.
I personally
love Etsy, because I believe in rooting for the little guy- it’s taking
advantage of the popularity of ecommerce and mobile shopping and providing
talented people with a way to start their business. Furthermore, as a buyer, it
gives you access to highly unique products at very affordable prices (average
sale is $20), you can even only buy local if you want to! It’s pretty much like
going to the SoCo Artist Market online. It’s new, evolving and learning and I
find that exciting- there are many areas of opportunity for Etsy, they’ve
already enjoyed great success and I want to see where this Brooklyn-based
operation goes.
Below are a
couple of captures from their website. As you can see, there’s minimal design involved.
The website’s functionality is great, and like I mentioned before, it has
phenomenal search capabilities. However, it’s not particularly pretty. It seems
like they don’t want the products to be drowned by the website design/layout.
Etsy.com is a
two-sided platform- it involves and needs buyers and sellers for the business
to exist. On the sellers’ side, the two primary customer segments that are most
important for Etsy, I believe are:
1.
Amateurs-
People who do crafts for fun, are good at creating things, and want to make
some extra bucks with their hobby.
Value
proposition: Etsy.com is the intermediary for these amateurs to sell the
product of their hobbies in exchange for a fee.
2.
Serious
Crafters and Artists- people who do see Etsy, as a way to launch their business
or career. The production of this product is their primary economical activity.
Value
proposition: Etsy.com these artists and entrepreneurs with a platform to launch
their designs and products and reach a wide range of customers, again, in exchange
for a fee. They can leverage their own websites, Pinterest, and the Etsy
membership to spread the word.
On the
side of buyers’ side, there are also different segments. My semi-educated guess
is that he most important ones are:
1.
Fashionable,
savvy, young women- looking for something quirky and different. They’re looking
for jewelry, apparel, and maybe some home items. They keep Etsy a secret. They
also love the fact that no one they know will have the same items they will.
Value proposition:
Etsy.com is offering them with a market to find rare and current products that
fit their lifestyle and desires.
2.
Tech-savvy
moms looking for craft materials, and seasonal items for their house and kids-
there’s a big section for kids, toys, and seasons (right now Halloween is big).
These are still aimed at moms who like buying on-line and appreciate the
uniqueness of their purchase.
Value
proposition: Etsy gives these savvy moms a modern and convenient way to find
fun items for their house and kids.
3.
Design
and art enthusiasts- they are looking for new artists, fresh and young designs,
and original art.
Value
proposition: Etsy provides a discovery tool for these artists and fans to
discover and purchase art form artists from all over the world.
Etsy has shown great growth since it's founding and it's role as intermediary is innovative in it's space and interesting form a business model perspective. I look forward into digging deeper into the company's strategy.
Sources:
Etsy.com
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