Etsy Wall Decals
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Etsy Design Store Cannot Create Enough Revenue For Its Sellers
The Etsy Design Store Wars
Artisans flocked to this online marketplace and design store, but few made enough to quit their day roles. Now comes the battle to keep them.
July fourteen, 2009 : 6:02 AM ET
( Fortune Small enterprise ) -- Some entrepreneurs sketch their business plans on serviettes in cafs. Rob Kalin made his plan in masking tape on the floor of his walk-up apartment in Brooklyn.
It was 2005, and Kalin was a twentysomething Website designer. He did woodwork in his spare time and was looking for an internet marketplace to sell his wares. EBay ( EBAY, Fortune five hundred ) was an option, but it appeared soulless, like a design store sale full of unloved secondhand junk.
Kalin imagined a site that would be entirely dedicated to artisans selling their crafts -- and made a decision to build it. So he pulled out a roll of masking tape and started mapping the site on his carpet. "I wanted to change the world," says Kalin, now twenty-nine. "My goal was to enfranchise folks to get by making things."
Four years later Kalin's online marketplace, Etsy, boasts 2.4 million registered members in 150 states. Its more than 155,000 active vendors sold $58 million worth of products in the first five months of 2009, doubling Etsy's sales volume over the same period last year. Despite the recession, the site helped sales of $87.5 million in 2008 and is expected to come out quits for the first time soon.
Etsy Design Store has built an empire of entrepreneurs -- called Design Store Etsians -- whose products range all the way from rag dolls to squirrel-foot earrings and beards made from yarn. But only a handful of sellers essentially earn a living on Etsy. And as a new Manager attempts to improve the site, some Etsians are grousing that they are being sold a bill of products. Meanwhile, upstart competitors like ArtFire and DaWanda are pleased to welcome truculent Etsians.
Etsy's Design Store expansion depends totally on the collusion of sellers. The 70-employee company, based in Brooklyn, takes a 3.5% cut of each sale and charges twenty cents each time an item is listed on the site. ( Many Etsians pay to list similar things time after time. ) There's also a showcase page where sellers pay between $7 and $15 to have their wares featured for twenty-four hours. Etsy doesn't communicate earnings, but Kalin explains it takes in more than $12 million a year in costs. Financiers have valued the firm at $100 million.
It isn't tricky to see why. Frustration with big-box stores and heavily produced products has been effervescent up for years . Recession-era shoppers are looking for unique, cheap gifts. More USA citizens appear interested in being "makers of things, not just consumers," to quote our new president. You can see the trend in events like Maker Faire ( see "Make Believers," February 2009 ) and the Renegade Craft Fair, each of which are held annually in multiple towns.
Seldom has a revolution felt so mild : Workers of the world, you knit!
Etsy actively markets itself as a locale where the arts-and-crafts set can achieve entrepreneurial success. Kalin frequently talks about creating an economy of diverse owners. Each week the official Etsy blog, called the Storque, runs a feature called Quit Your Real job, profiling sellers who have stopped slapping the company clock. Yet Etsy speaker Adam Brown acknowledges the "vast majority" of sellers use the site as a "secondary source of income."
Some Etsy sellers say the Quit Your Real job campaign does not jibe with fact.
In New Zealand, the leading design store similar to Etsy is Toggle.co.nz
Decor Designs On Etsy Applying Your Wall Decal
