Etsy is an e-commerce website focusing on handmade or vintage items and unique factory-manufactured products. These items cover a wide range of product types, including jewelry, furniture, housewares, kitchen gadgets, clothing, knick-knacks, and art. The site resembles an open craft fair, where sellers (mostly small merchants and local artisans) set up Etsy stores and sell their products to buyers, who are people wanting to buy unique, mostly handmade products from small/local producers. Etsy launched in 2005. In 2022, the firm had 94 million buyers and 7.3 million sellers. For the same year, the firm’s sales revenue was \($2.566\) billion.

The idea for Etsy originated in a woodworking shop.
Rob Kalin, who earned a college degree in the classics, bypassed the traditional job market to focus on his woodworking talents. He created a unique product, a computer encased in wood, but could not find a marketplace to sell it. So, along with Chris Maguire, Jared Tarbell, and Haim Schoppik, they launched Etsy, an online marketplace for crafts where hobbyists and artisans could connect with people interested in buying handmade goods.
From the beginning, Etsy championed the idea of community as a way of “keeping commerce human.” The company saw itself as an advocate for small merchants and artisans. It also took steps to engage its community and empower its sellers. Every Monday evening Etsy sponsored craft night, where 50 to 80 people came to its office in Brooklyn to make crafts.
The company also sponsored employee craft nights where they would hone their craft-making talents. At the same time, Kalin started holding virtual town hall meetings with Etsy sellers to provide tips to them on how to increase their sales. All this was done in part to build community, but there was a broader purpose.
Kalin and his team knew that Etsy’s financial success hinged on how much commerce flowed through its site.
Steady and profitable growth is a part of Etsy’s story. At the end of 2022, the firm had 2,790 employees with 59.1 percent of them between the ages of 25 and 34. Sellers in 234 countries populate the Etsy site. Etsy remained a private company for 10 years. It went public on April 16, 2015, and trades on the NASDAQ under the ticker symbol ETSY. The company had a market value of \($1.8\) billion at the time of its IPO; today, its market capitalization is over \($17\) billion. The firm’s sales revenue of \($2.566\) billion in 2022 is a 10.18 percent increase over 2021 revenue.....

Discussion Questions:

1.How does Etsy create, deliver, and capture value for its stakeholders?
2.Is Etsy’s business model a standard or a disruptive business model? Explain your answer.
3.How does Etsy’s business model differ from eBay’s business model for the makers of handmade goods?
4.In your judgment, what is the most serious challenge Etsy faces? To what extent does that challenge threaten Etsy’s business model? How should Etsy confront the challenge?