Know the Etsy Business Model

Know the Etsy Business Model

july 25, 2023 01:10PM

Etsy Business Model

Etsy is a platform that focuses on hand-crafted products. With its 15-year history and 2 million sellers (two-thirds in the United States), Etsy has grown into a massive e-commerce platform. Etsy has a unique niche, and it's a very narrow niche.

As the About Us page says, Etsy is a global marketplace of unique and creative products. The site is home to a universe of unique, extraordinary items, ranging fromvintage treasures to hand-crafted pieces. Etsy is a marketplace that connects buyers and artists around the globe.

Etsy allows people to sell and buy custom-made items such as clothes, accessories, shoes, toys and decorations, vintage items, and crafting supplies. The company was launched in April 2005 and had a successful track record that led to its IPO.

Etsy revenue model (how Etsy makes money)

Etsy's unique revenue model is as well-known as its unique listing of items. Etsy's major revenue models include :

Etsy charges its sellers to list their products on the platform. The fee to list an item on Etsy can be as low as $0.20. However, it adds up to a significant amount of money for Etsy. The $0.20 amount is valid for one month.Etsy charges sellers an additional commission on every sale. The commission fee is fixed at 3,5%. Etsy allows sellers to set their price, but Etsy will deduct a 3.5% commission from that price before paying it to the Seller.

Etsy offers some extra features that sellers can use by paying a fee. These are essentially advertising options, such as making a particular product the featured product. The sellers can display their shops to increase sales.

A Etsy'sccording to the company, Etsy's goal is to help its artists build successful businesses by selling their creative and unique products. "Something special with a personal touch ", Etsy says. Like Amazon or eBay, it connects artists looking to earn a living, or at least some extra money, with buyers seeking a unique product. This article will explain how Etsy works. It started as a small website for artisans and has grown into a public company with over $ 360 million US-Dollars.

4 step model about How Etsy Works

  • Sign up as a seller and list of your items on the platform.

    It is not free to list items on Etsy. Etsy charges for listing each item. This fee is valid for one month.

  • Browse these items, and order the ones you like.

    Etsy's advanced filters allow buyers to find products. The buyer can ask the seller a specific question or add the product to their cart.

  • Buyers use the platform to make a purchase.

    Etsy is the only place where all transactions take place. Etsy takes a 3.5% commission from each successful sale and transfers the remaining amount to the Seller's account.

  • The buyer can rate and review items.

    These reviews can be helpful to other buyers who may be interested in the products. The rating system allows other buyers to determine whether the product is worth buying.

Why has Etsy become so popular?

Etsy's success is due to its unique Etsy Business Model. Unlike Amazon or eBay, Etsy chose a niche of art, crafts, handicrafts and handmade items. Etsy is a clear winner in this market segment. Let's look at what made Etsy so successful.

Looking at eBay, Amazon, and Etsy from a broad perspective, you will find that they all list such items, but Etsy's value brought buyers and sellers to its platform.

  • Word of Mouth Marketing:

    At the time, Etsy was the only website selling handmade goods. Etsy reported that 67% were women. Etsy's significant growth was a result of word-of-mouth in women's circles.

  • Extended API

    Etsy's API allows developers to tap into Etsy's community and create their Etsy-powered applications for desktop, mobile, and web. This approach has been used by many smaller businesses to sell their products.

  • Support and offline help for artists

    Etsy is on the ground. Etsy run workshops and offered support services, including business advice. Etsy has, in some cases, even given small loans to artists.

Etsy's Business Model Canvas

Etsy Business Model

Let's look at the Etsy Canvas of Business Models Below:

  • Etsy's Customer Segments

    Etsy is a Marketplace with two sides, i.e., buyers and sellers. The platform is a marketplace where buyers can buy unique items, such as vintage or craft products. Sellers are small businesses or individuals who produce hand-made products. They may want to open an online shop or make money selling their items.

  • Etsy Value Propositions

    Etsy offers value to both its buyer and seller segments.

    Etsy offers international shipping, which is a significant benefit for buyers. They can find unique items from artists worldwide or vintage items and deliver them to their homes, no matter where they are.

    Etsy allows sellers to showcase their work and set the price that they feel is fair. Etsy allows sellers to create as many shops as they like, with as many products as they wish to sell. They can also add tags to their products so that they may be found more easily.

  • Etsy Customer Relationships

    Etsy's customer relationship is built on a community of online users that support the marketplace. The company also focuses on seller support and education through customer service and events that promote local commerce and knowledge sharing.

  • Etsy's Key Resources

    Etsy's essential resources enable the company to perform its core activities and deliver its value proposition. The e-commerce site, ere all transactions are made, the payment and shipping processes and systems, and the community of buyers and sellers are all critical resources.

  • Etsy's key activities

    Etsy's business is run successfully by the following key activities: first, the creation and maintenance of its platform, which includes all its tools, features, and processes. This includes payment and shipping. In addition, creating a community of sellers and buyers is essential to ensure the marketplace works appropriately. A two-sided platform is useless if one or both sides do not use it.

  • Etsy's Key Partners

    Etsy's key partners are its buyers and sellers. A marketplace is only useful if people are willing to trust the platform's structure and sell their products through it. If no people want to buy the products or rely on websites for purchases, the marketplace will not attract sellers. The two sides of a platform are the main partners in a business.

  • Etsy's SWOT Analysis

    Below is a detailed SWOT analysis for Etsy.

  • Etsy's Strengths

    Customer satisfaction:This company is known for its unique products and offers a pleasant experience to both buyers and sellers. The platform allows customers to post reviews, which gives them a feeling of importance.

    Credibility: Etsy has to approve everything sold, making the company credible. Online payment is flexible and reliable, which allows the audience to have confidence in the website.

    Cash Flow Etsy: can maintain a profitable business with several regular customers.

    Distribution: Etsy has outlets in every state in the U.S. There are also outlets in other countries. They are all supported by a reliable distribution network that guaranties the timely delivery of the products;

    Relationships with dealers: Etsy's relationship with the sellers that promote their products is built on loyalty, excellent service, and a solid dealer base.

    Brand and reputation: Etsy's market share has steadily increased, increasing its brand value.

    Workforce Etsy: can offer its customers a pleasant and safe experience because they rely on well-trained and qualified professionals.


After analyzing the Etsy of a shopping app development company, we concluded that the company's name was built on the trust of its customers, who are also its primary partners. This entrepreneurial ecosystem has created a positive cycle that continues to grow.

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Contact US!

India india

Plot No- 309-310, Phase IV, Udyog Vihar, Sector 18, Gurugram, Haryana 122022

+91 8920947884


1968 S. Coast Hwy, Laguna Beach, CA 92651, United States

+1 9176282062

Singapore singapore

10 Anson Road, #33-01, International Plaza, Singapore, Singapore 079903

+ 6590163053