Etsy is an e-commerce website that serves as a marketplace for buyers and vendors. It sells various items including vintage or handcrafted products. Many artists on Etsy trade stationery designs, art prints, planners, etc. that can be digitally downloaded. On Etsy, any seller can open his or her shop without the need for a business license. Let’s see Who owns Etsy?
The owner of Etsy is Etsy, Inc. It has always been this way since its establishment in 2005. No other corporation has bought Etsy to date and it is running successfully without the support of any parent companies. The following is a detailed description of Etsy, Inc.
Etsy, Inc. overview
It is a public corporation of American origin belonging to the e-commerce industry. It was founded on June 18, 2005, by Chris Maguire, Jared Tarbell, Robert Kalin, and Haim Schoppik. It is headquartered in Brooklyn, New York. The annual revenue of the company is $1.725 billion. Its ticker symbol is ‘Nasdaq: ETSY’. A total of 1,400 employees are currently working at Etsy.
It has more than 45 million products for selling on its website with 31.7 million buyers and 1.9 million sellers. It recorded a net income of $349.246 million in December 2020. Gross Merchandise Sales as of 2020 was $10.3 billion. The corporation has its focus on unique craft supplies, vintage and handmade treasures. You can find items from a variety of categories being sold at Etsy- tools, home décor, jewelry, craft supplies, furniture, clothing, etc. The site considers items vintage only if they are at least 20 years old. Etsy believes that it is its responsibility to keep human interaction at the heart of commerce, even at this time when automation is increasing day by day. The guiding principles of Etsy are as follows-
- Lead with optimism
- Dig deeper
- Embrace the differences
- Commit to craft
- Minimize waste
Etsy’s Business Model
Etsy generates revenue through straightforward procedures. It works on a marketplace business model and the basic idea is to charge the sellers for using their platform. Etsy has come a long way and evolved in its monetizing strategy. It started from simple commission and listings to making a platform approach with many different points of collecting revenue. It earns through different income streams that include Etsy’s services, charges, and other monthly subscriptions.
At the beginning of Etsy’s Initial Public Offering, its value was $1.8 billion and the share price was $16. But now it has raised to the rate of $200 and the company value is around $24 billion. Etsy has a total of 9 venture capital funding rounds. It has made $97.3 million during its life as a private corporation. It had a 100% increase in its revenue in the year 2020. In 2019, the annual revenue was around $818 million that escalated to $1.7 billion in 2020. The major investors of this company include Union Square Ventures, Accel, Index, etc.
Income streams
The main income streams of Etsy are as follows-
Listing fees– It is the price charged by Etsy whenever a seller posts an item on their platform. The listing fee is $0.20 per item. It is not charged for any private or pattern listings. The posts have a period of 4 months after which the sellers have to renew their listing. They also provide the facility of automatic renewal. The listing fee does not include the charges for a successful sale of the item.
Advertising fees– Etsy also generates money by advertising items for interested sellers. There are two types of promotions- Etsy Ads and Offsite Ads. The ads of the first category are shown throughout the website of Etsy. They are shown when people browse through market pages or search options. The merchant is asked for fees only when someone clicks on the advertisement. They also call it CPC or Cost Per Click. The CPC varies with different item categories, countries, and ad spots.
Offsite Ads are advertisements outside the Etsy platform. For these, Etsy charges the seller only when a user that has clicked on the ad buys it within 30 days. It makes a commission of 12-15% on a sale through the Offsite ad. The company finds ad spots on search engines, social media platforms, etc.
Transaction fees– It is the fees payable for the seller to Etsy whenever there is a successful sale of their item. It has a rate of 5%. Other charges include gift wrapping and shipping fare.
Subscription– Etsy offers its users an advanced level of its platform called Etsy Plus. For this service, users are charged $10 per month. They provide premium services on Etsy plus such as custom shipping boxes, restock notifications, listing credits, additional shop customizations, Etsy ad credit, etc.
Payment processing– It is an Etsy service that facilities payments of various currencies and converts them into the seller’s regional currency. For this, Etsy has a policy of a fixed fee as well as a percentage fee. The fixed fee is almost $0.30 whereas the percentage fee ranges from 3 to 6.5%. The percentage fee depends upon the seller’s country. This particular fee is only applicable for online purchases. If the seller has a store, he or she can opt for Square’s card reader for their in-person sales. The fees for this depends upon the policies of Square’s payment processes in which Etsy holds a share as well.
Pattern– It allows the users to create their separate websites. It includes social media sharing, advanced features in website analytics, e-mail marketing through MailChimp, an unlimited number of listings, blogs, etc. Its monthly cost is $15 as per charges by Etsy. It also provides a free one-month subscription that attracts many users to the scheme.
Operations
Etsy operates the “Etsy Labs”, a place where it conducts crafting workshops. The main office of Etsy is in charge of this operation and is located in Dumbo, Brooklyn. It is also responsible for maintaining the site and other essential functions of the company- PR business, technology, customer support, marketing, and communications team. Etsy Labs is provided with a workspace that contains different donated materials and equipment. Here, the members of the Etsy Lab come together to make unique products, teach other members during the workshop, and attend special events.
In 2012, Etsy declared that it had decided to focus on hiring a greater number of women as the engineers of the company. This step was taken to maintain the gender balance in their employee team. By 2019, the percentage of women and non-binary employees in the company was 30%. Other 30% were identified as people of color.
In 2007, Etsy shook hands with many craft communities such as The Austin Craft Mafia, Burdastyle, Craftster, Craft Magazine, The American Craft Council, Indiepublic, Design Sponge, Interweave press. It led to the creation of the Handmade Consortium. It asked people to take a pledge to buy only handmade stuff during the holiday season. It was an effort to encourage the small craft businesses and the unique ideas of gifting people come up with. Etsy also opened a short-term shopfront in SoHo, New York City in December 2012. It has a partnership with West Elm (a chain of retail stores) to sell some of the Etsy products at their store.
Frequently Asked Questions (FAQs)
How can I get a job at Etsy?
Etsy prefers those applicants who show uniqueness, passion in their work, and are humane with lots of curiosity. Before entering their hiring process, study about the corporation inside and out. Take an idea of how the company works and what your role possibly demands. Having a good understanding of their business structure can help you a lot in answering company-related questions. It will show your passion for the corporation. Assessment of the skills demanded by the position and demonstrating them will aid in landing a job at Etsy. Remember to show a sense of humility as Etsy has a pledge to keep commerce human and therefore prefers such candidates. Show your curiosity to learn about new things and look forward to asking lots of questions after your interview.
What is the average salary of Etsy employees?
Etsy employees earn an average of $41.77 per hour or $86,875 per annum. We can observe a great difference in average salaries of the top 10% earners and the bottom 10%. The highest-paid employees can end up earning more than $152,000 while the lowest-paid employees earn around $49,000 or maybe lesser. Following are some job roles with high earnings at Etsy-
- Marketing lead- $190,682 per annum
- Engineering Manager- $154,320 per annum
- Product Manager- $148,800 per annum
- Owner/ Operator- $126,360 per annum
- Product Designer- $115,689 per annum
- Manager, Network, and Security- $106,984 per annum
A Community Manager is offered a low annual salary of $48,765. Whereas a Teacher Assistant at Etsy makes only $22,996 per year. But more than half of Etsy’s salaries are above the $100,000 mark. The salary ratio of males to females is $86 per female employee for $100 per male employee.
Conclusion
Etsy, Inc., a company that started from scratch is now an entire brand. It is 16 years of work and utmost dedication that Etsy stands rock-solid without any other company’s support. It continues building and expanding its empire in the e-commerce sector.
