The marketplace for artistsProducts sold and bought through Etsy range from art, clothing, jewelry, and other decorative objects to arts and crafts supplies. The platform registered almost immediate success, reaching up to a million U.S. dollars in sales within a couple of years after its founding. The annual gross merchandise sales (GMS) volume has been on a steady increase, rising from less than 200,000 U.S. dollars in 2005 to almost five billion in 2019. Yet it was in 2020, the first year of the pandemic, that the company's finances really took off. The platform's parent company, Etsy Inc., generated revenues of around 1.7 billion U.S. dollars that year. This growth has only continued in 2022, reaching almost 2.6 billion dollars.
In 2022, the number of active sellers on the Etsy.com platform surpassed 7.4 million, a slight decrease than in the previous year when the number of sellers peaked on the platform. The site attracts about 95 million active buyers who recently bought goods through the platform. These figures include buyers and sellers associated with Reverb.com, the secondhand marketplace for musical instruments acquired by Etsy Inc. in 2019, as well as the Depop and Elo7 platforms.
From Brooklyn to the worldAs of May 2022, Etsy was among the most popular online marketplaces in the United States, alongside other popular marketplaces like Amazon and eBay. Etsy has also been able to implement a strong mobile strategy and grow its app business. Since 2017, more than half of the company’s GMS was generated from the use of mobile devices. The platform also ranks among the leading shopping apps in its home market, with nearly over 11 million downloads in 2022.
In addition to being an online shop, Etsy has also incorporated functions of social networks. Users can create personal public profiles, connect with one another, use features to add friends, write reviews, and send messages. When it comes to mobile demand, the U.S. remains Etsy’s most important market by app downloads.
Etsy fees cause seller strikeMost of Etsy Inc.'s revenue is generated from its marketplace segment, powered by the fees users pay to sell their products on the company's online platform. In addition, Etsy earns services revenue, comprised of the fees a seller pays the company for optional services such as advertising and Etsy Shipping Labels.
In April 2022, a spark of controversy hit Etsy’s success as the company increased its transaction fee per item – a cost incurred by each Etsy shop globally. Etsy vendors, who play a key role in generating the company’s increasing sales volumes, organized a weeklong strike in protest of the new policy. Despite this, Etsy seller fees remain on the lower end compared to other major e-commerce marketplaces, and likely will not be lowered in the near future.