• The Elder & Estate Planning Law Firm

The Etsy Story

Few industries thrived during the pandemic like e-commerce. Grocery shopping and food delivery apps saw a surge in users, while Amazon’s profits soared. But perhaps the greatest success story was Etsy, an online hub for small -time makers to advertise and sell their goods to millions of users across the globe.

Etsy merges the side-hustle possibilities of eBay and Craigslist with the product quality found at online boutiques and adds its own unique, artistic twist. Some shop owners who use Etsy have transformed their hobby into a full-time gig, amassing a loyal following while others continue to make extra cash with their homemade products in between their day jobs.

When the global population found themselves with more time on their hands both for shopping and learning new hobbies, Etsy saw in increase in buyers, sellers, and profits. Steadily growing since 2005, the pandemic offered Etsy – and those with an entrepreneurial spirit – an opportunity to grow like never before.

Etsy was founded in 2005 by Rob Kalin, Chris Maguire, and Haim Schoppik – three creators who all recognized just how difficult it could be for makers to sell their products. Gathered in a Brooklyn, New York City apartment, the founders shared a vision for the opportunity Etsy could offer. The online shop soon soared in popularity, raking in $4.3 million in just three years, and soon, Chad Dickerson of Yahoo was brought in to replace Maguire and Schoppik, eventually succeeding Kalin as the company’s CEO.

Dickerson would lead the charge to catapult Etsy into the valuable position that it remains in today, by allowing handmade goods to be sold alongside manufactured products. Though upsetting for the sellers at the time, this move would prove to be just what it needed when a pandemic inspired thousands of creators to make and sell homemade goods through Etsy just seven years later.

Prior to the pandemic, Etsy was faring moderately well. It was a popular site for consumers, and creators found solace in the platform it offered. Today, Etsy – which went public in 2015 – is smashing expectations. Its fourth-quarter earnings for 2020 were nearly double of what was projected by experts, and it reported $617 million in revenue, which was $100 million over what was expected.

As the second quarter of 2020 and the pandemic collided, Etsy took advantage of the opportunity, encouraging many of its sellers to start making and selling masks. This move was a big one. According to Investopedia, Etsy saw a 93% sales jump in the second quarter of 2020, reporting $356 million in sales for masks alone. The beauty of that is that buyers on Etsy often bought more than just masks.

They found toys and gifts that would keep them sane during lockdown, and as people reimagined their spaces for work, sales in furniture spiked 128% from 2019. And we’re willing to bet that when the holiday shopping season arrived, many likely returned to Etsy shops that had treated them well.

Etsy’s main competitor, Amazon, launched its own version of the site in 2015 called Handmade. But users on that platform tend to struggle to compete with large corporations that are also featured on Amazon. During a year when people craved connection, Etsy’s homemade, entrepreneurial spirit made it a force to be reckoned with in e-commerce.

That one decision to promote mask sales – perhaps couple with Amazon’s indiscretions, launched Etsy from an artsy site to a must search store for online shoppers.

21 views0 comments