A decade ago,
Etsy launched
as a way for crafters and people that enjoy DIY (do it yourself) projects to
sell their handmade goods online. Among other things, the platform sells
clothing, shoes, jewelry, and
fashion accessories. Now the New York-based e-commerce site has filed for
an initial public offering.
Now it has been decided that the company is going public.
If you don’t believe me, you can read the
Etsy is going public filing with the SEC.
Etsy operates a marketplace where people around the world
connect, both online and offline, to make, sell and buy unique goods. Handmade
goods are the foundation of their marketplace. Whether crafted by an Etsy
seller herself, with the assistance of her team or with an outside manufacturer
in small batches, handmade goods spring from the imagination and creativity of
an Etsy seller and embody authorship, responsibility and transparency. They
believe they are creating a new economy, which they call the Etsy Economy, where
creative entrepreneurs find meaningful work and both global and local markets
for their goods, and where thoughtful consumers discover and buy unique goods
and build relationships with the people who sell them.
Etsy was founded in June 2005 in Brooklyn, New York as a
marketplace for handmade goods and craft supplies. From those beginnings, they
have built an innovative, technology-based platform that, as of December 31,
2014, connected 54.0 million members, including 1.4 million active sellers and
19.8 million active buyers, in nearly every country in the world. In 2014, Etsy
sellers generated GMS of $1.93 billion, of which 36.1% came from purchases made
on mobile devices and 30.9% came from an Etsy seller or an Etsy buyer outside of
the United States.
The community of active users is the heart and soul of
Etsy. Their community is made up of creative entrepreneurs who sell on their
platform, thoughtful consumers looking to buy unique goods in their marketplace,
responsible manufacturers who help Etsy sellers grow their businesses and Etsy
employees who maintain our platform and nurture their ecosystem.
Their business model is based
on shared success: they make money when Etsy sellers make money. Their revenue
is diversified, generated from a mix of marketplace activities and the services
they provide Etsy sellers to help them create and grow their businesses.
Marketplace revenue includes the fee an Etsy seller pays for each completed
transaction and the listing fee an Etsy seller pays for each item he or she
lists. Seller Services revenue includes fees an Etsy seller pays for services
such as prominent placement in search results via Promoted Listings, payment
processing via Direct Checkout and purchases of shipping labels through their
platform via Shipping Labels. Other revenue includes the fees they receive from
a third-party payment processor.
In 2014, Etsy sellers generated GMS of $1.93 billion, up
43.3% over 2013. In 2014, they generated revenue of $195.6 million, up 56.4%
over 2013. In 2014, they generated a net loss of $15.2 million and Adjusted
EBITDA of $23.1 million compared to a net loss of $0.8 million and Adjusted
EBITDA of $16.9 million in 2013. See “Selected Consolidated Financial and Other
Data—Non-GAAP Financial Measures” for more information and for a reconciliation
of Adjusted EBITDA to net loss, the most directly comparable financial measure
calculated and presented in accordance with generally accepted accounting
principles in the United States, or GAAP.
They operate at the center of several converging
macroeconomic trends in online and mobile commerce, employment, consumption and
manufacturing. The company believes that in combination these trends will
benefit millions of people in their ecosystem around the world.
Etsy sellers engaging in their creative passion, working
for themselves and defining success on their own terms.
Etsy buyers accessing a diverse, global marketplace of
goods that have historically been found in highly fragmented markets; and,
increasingly, responsible manufacturers using modern tools to craft goods in
partnership with Etsy sellers.
Trends in Online and Mobile Commerce. Etsy sellers offer
goods in dozens of online retail categories, including jewelry, stationery,
clothing, home goods, craft supplies and vintage items. Euromonitor, a consumer
market research company, estimated that the global online retail market was $695
billion in 2013, up from $280 billion in 2008, representing a compound annual
growth rate, or CAGR, of 19.9%. This growth is expected to continue, with the
global online retail market becoming a significantly larger portion of the total
retail market, reaching $1.5 trillion by 2018, implying a 16.6% CAGR from 2013.
Mobile commerce is also increasingly important in online retail. comScore
estimated that since the first quarter of 2013, consumers visiting online
commerce sites spent more than half of their browsing time on mobile devices;
however, online commerce spending via mobile devices represented only 11% of
total online commerce dollars in the third quarter of 2014.
Trends in Employment. Whether motivated by economic
necessity or personal preference, a growing number of people are turning to
self-employment for their livelihoods. In a 2012 survey of middle-class
households in the United States by the Pew Research Center, 85% said that it was
more difficult to maintain their living standards today than it was ten years
ago. A study commissioned in July 2014 by the Freelancers Union and
Elance-oDesk estimated that 53 million Americans are working as freelancers.
Women are also contributing to the trend towards self-employment. World Bank
research shows that, in certain developing nations, over half of the women in
the labor force are self-employed. We believe that many of these people have
creative skills that could provide a foundation for entrepreneurship, but that
they often have little or no experience running their own businesses, and they
typically lack the marketing resources, the technological expertise and the
manufacturing and logistics capabilities to turn their creativity into a
business. The creative self-employed can use the Etsy platform to help sell
their unique product.
Trends in Consumption. Most large retailers today follow
the same formula, emphasizing efficiency and scale and pressuring their
suppliers to reduce their costs in order to serve mass-produced goods at the
lowest-possible prices. Etsy believes that many consumers want to purchase
goods that are unique and that reflect their personality and style, not
simply mass-produced, generic goods. Some consumers want their purchases to
reflect their values; they want to support retailers and suppliers that have
responsible and sustainable policies toward their employees, their communities
and the environment. Finding these goods can be difficult, as markets for such
goods have historically been highly fragmented across boutiques, consignment
stores and other venues and marketplaces.
Trends in Manufacturing. Because of advances in
manufacturing technologies, individuals and small businesses now have the
ability to manufacture goods in their homes and studios using tools such as
computer-assisted design, 3D printers (learn about
3D printed fashion), computer-controlled routers and other machines at a
fraction of the historical cost. Etsy believe the decrease in the size and the
cost of these tools will make it easier for creative entrepreneurs to start new
businesses. They also believe that small-batch manufacturers will be able to
use these new technologies to provide high-quality manufacturing services so
that creative entrepreneurs can scale their own businesses.
Have you used Etsy to buy or sell clothing, footwear, or
fashion accessories? Please share your thoughts about this shopping service in
the comments section below.
Learn more about
clothing retailers both online and offline here on Apparel Search. If you
are interested specifically in learning more about the online companies, you can
check the
online retailer section for more information.
For those of you that enjoy crafty and fashionable accessories, you may want to check out our previous blog post about Rosyemme Handcrafted Accessories. The article goes back to 2013, but they really had nice items.
Thank you for taking the time to read our fashion blog post. We hope that you have found this news to be informative. If you have comments or questions, please add your thoughts in the discussion area below.
