Minority marketplaces of interest: Etsy

  • Let's explore several minority marketplaces whose revenues can complement those of your online store. Let's start with Etsy.

  • Sometimes, it seems that there are only two or three marketplaces, but on other occasions we have already shown you that there are alternatives to Amazon, Aliexpress or eBay that can be much more interesting than the more traditional and well-known marketplaces.

    In the spirit of discovering these alternatives in depth, we have decided to analyze those we believe may be more interesting for you among these not so popular options. In this way, we hope to open up a new way for you to improve your business performance with complementary income from other channels that you may not yet be exploiting.

    And today, we start with one that we are sure you are at least familiar with: Etsy.
  • The supplementary marketplace model to eCommerce

  • Before we get into the subject of Etsy, let´s have a brief reflection to serve as a framework, context and starting point.

    There is much debate about the advantages and disadvantages of the marketplace model of online sales. Obviously, having to pay a commission or the risk of losing control of the product makes us doubt it, despite the volume of business we can achieve.

    The key, from our point of view, is to see it as an additional channel but not as a substitute for your own store. In fact, the ideal situation is to take advantage of the sales generated in the marketplace to build customer loyalty in our eCommerce (where we will always have more margin and can work on other strategies that benefit us as a brand).

    Having made this point, let's get down to business.
  • What is Etsy and how it works

  • Now, let´s go straight to the point and get into what it is, how it works and how much it costs to sell on Etsy. Everything you need to know to start assessing whether it is worth it or not to diversify your business on this platform.

    Etsy is a marketplace with a considerable trajectory, one of the most veteran ones. Although it is not exactly unknown, the truth is that it is not particularly popular among the general public.

    This is partly due to its focus and segmentation, which is aimed at turning Etsy into a platform for artisans, artists, creators and small or medium-sized businesses specializing in the sale of products made by hand or with manual processes.

    Having said all this, its business volume is interesting and has a sustained but irregular growth over time. According to Statista data, its revenues in millions of dollars have been increasing since 2012, with a very important jump between 2019 and 2020.
  • Could it be because many people have found a way to sell in those niches that have grown out of during confinement?
  • Etsy is a marketplace... vertical or horizontal?

  • Actually, Etsy is a certain "anomaly" that is a bit difficult to label. Is it a vertical marketplace or does it belong to the horizontal category? Is it closer to working a niche or, on the contrary, does it have such a diversified catalog that this definition falls short?

    In particular, we think that it could be considered in a way as a hybrid. It has a sufficient number of categories to understand that it is not vertical at all, but that layer of craftsmanship on its inventory works as a way of relating all the products under a common denominator.
  • How does Etsy work?

  • It uses the standard model of this type of platform: you have to register your store on Etsy and upload the listing or stock of products.
  • The registration itself has no mystery, it is as simple as creating a profile on any web service such as a social network or similar. There are a few minimal configuration steps.

    Then, we choose a name for the store (which is actually more of a seller profile than a store as such) and start uploading products, entering in our private area the photographs, descriptions, quantity of product in stock, product variants (colors, for example), price, shipping methods, data for payment through Etsy Payments...

    For any questions you may have, Etsy has a seller's manual that helps to sell and inspires you in matters ranging from photography to marketing through logistics tips or sales strategy. It is very complete, so I recommend you take a look at this knowledge base.
  • Cost of selling on Etsy

  • Selling on Etsy, logically, has a cost for you. Not so much the creation of the store itself which, in fact, is totally free.

    They do charge for three other concepts which are: publication, transaction and payment processing:
    • Publication fee: the platform sets a fee of $0.20 per product or ad that we put on sale for four months. Once this period has elapsed, we will have to renew for another four months paying the same amount. Important: think carefully about what you want to publish because these are non-refundable fees.
    • Transaction fee: each sale you close on Etsy has an associated cost of 5% of the price plus the added amount of the gift option and the corresponding taxes.
    • Advertising fees: we recognize that this is a bit confusing. There are 2 different concepts with different costs:
    1.  1. Etsy Ads: as in Amazon and many other marketplaces, we have the option of running PPC or pay-per-click campaigns. Basically, it is the same mechanics: you set a daily budget and bid to appear in different locations. Here the cost will depend on your budget and the competition.
    2. 2. Off Site Advertising: Etsy carries out its own advertising campaigns on other sites and search engines. As customers of their platform, we can join them if we wish. What is the cost? The general fee is 15% of each sale achieved (we only pay if there is a conversion).

    These are the main costs along with the payment processing fee, which varies by country. Additionally, we have other optional costs, such as the cost of joining Etsy Plus with extra options for brands.

    • Main advantage: this marketplace stands out especially for its personalized products and the focus on the creator, who is highly respected. Craftsmanship and vintage make the difference with other platforms, as well as everything personalized.

    • Main disadvantage: some users find the process of registering products somewhat complicated and, especially, you should count on that it may cost you a little to get to have visibility.

    • Keep in mind that: Etsy has an agreement with Square to make offline collections in our physical store using their physical point of sale terminals.

    • Do not forget to: have a plan B when creating the name of your store on the platform. As with a social network, it may already be registered.
  • What do you think about Etsy? Does this alternative marketplace fit your business model? Let us know if you decide to use it!

  • Images | Etsy.

Laia Ordoñez

Laia Ordóñez is a copywriting & eCommerce content marketing expert. She is Content & Marketing Manager at DueHome, a copywriting & content independent advisor, and Oleoshop's blog's editor-in-chief.

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