Crafty
Etsy, an online marketplace for handmade products, is clever when it comes to turning unique goods into cash.
Brain Too
Three-and-a-half years ago, Sarah Brown was just Sarah Brown, a costume designer living in Los Angeles who worked part time at a boutique to make ends meet. Today, she’s “Brokesy,” a maker of handmade pillows and laptop cases with clients in more than 20 countries. The 35-year-old quit her retail side job in 2006 and began selling her wares under her alias (a wink at her financial status at the time), and her business has more than quadrupled since then—she made $16,000 just last year. Broke no more, Brown—who still works as a costume designer—credits her success to Etsy.com. “Were it not for Etsy, my business probably wouldn’t exist,” she says.
Many of Etsy’s 400,000 sellers feel the same way. The website, an online marketplace for handmade and vintage goods and supplies, has started something of a micro-manufacturing revolution, giving independent sellers a worldwide platform from which to sell their products while providing buyers with a one-stop shop for unique clothes, jewelry, art and household accessories. Four-and-a-half million people have free Etsy accounts that allow them to buy items on the site; more than 246,000 joined in March alone.
Shopping on Etsy involves more than simply clicking and purchasing. Buyers can enter the site’s “Time Machine” to view a virtual parade of recently listed items, from a $35 necklace posted a minute earlier to an $18 lamp shade listed four minutes before that. Consumers can also take advantage of “Pounce,” a site feature that allows them to view sellers awaiting their very first transaction (ah, discovery) or ones who just sold an item (get the goods while they’re hot). If shoppers are feeling celebratory, they can click on “Birthdays” and buy items from sellers who are toasting their birthdays that day.
Etsy is the brainchild of Robert Kalin, a Brooklyn-based woodworker and photographer who couldn’t find a good place to sell his products. eBay’s seemingly limitless array of merchandise (TVs! Designer sunglasses! Pooper scoopers!) dwarfed his handmade offerings, while stand-alone stores limited him to specific geographic areas. Together with two fellow New York University graduates, Kalin, then 25, created Etsy in 2005, funding the venture with a few investments from friends. He also enlisted wisdom (and eventually, dollars) from web gurus such as Caterina Fake, co-founder of the photo-sharing behemoth Flickr.com.
Business grew slowly but consistently, with Etsy sellers netting $166,000 in gross merchandise sales in 2005. Kalin and the company’s four employees charged sellers a 10-cent fee to list an item for four months (it’s now a 20-cent fee) and a 3.5% transaction fee for each purchase. Etsy now has 90 full-time employees and posted sales of $180.6 million in 2009. “I [never] really imagined it would become as big as it has,” says Matt Stinchcomb, Etsy’s vice president of community.
The company owes much of its success to the grassroots marketing strategy Kalin implemented from the get-go. His priorities were to build fan bases across the country and forge strong relationships with and between members. To help him with these goals, he hired Stinchcomb, his roommate and a former member of the indie-rock band French Kicks. Kalin charged Stinchcomb with building a loyal fan base for Etsy like the one the rocker had generated for his band.
Stinchcomb got to work, instituting Etsy “teams”—groups of sellers linked by geography or interest who share tips, swap stories and occasionally pool their funds to buy advertisements or booths at local craft fairs. Forty thousand sellers are currently on 700 teams, and many take advantage of the site’s “Virtual Labs” to chat with one another via live video. Those who live in the Brooklyn area can visit the company’s headquarters on Monday nights, when the office welcomes the public into its “Etsy Labs” and encourages soap-makers to experiment with scents while seamstresses work on curtains. These weekly sessions are broadcast live so Etsy members in other cities can enjoy the camaraderie remotely.
By building an interconnected community, the site is actually building stronger sellers, says Madelynn Cassin, a 33-year-old jewelry maker and mother of three, whose Etsy business netted her approximately $125,000 last year. Cassin is a member of “the Jets,” a team of Etsy jewelers that she communicates with almost daily, discussing everything from business techniques and where to buy high-quality materials on the cheap to funny stories about their families. The Jets, whom Cassin calls “unsung heroes,” have pledged to promote each other on their individual blogs and social networking sites, praising the wares of their would-be competitors.
In addition to the creation of teams, Etsy makes individuals stronger by promoting a number of applications that help them leverage social media to drive traffic to their Etsy shops. Brown’s “Brokesy” Facebook fan page features an Etsy application that automatically updates her profile with six pictures of items she recently added and links to them on Etsy. “We try to make it very easy for people to use social media to sell their products,” Stinchcomb says. “The better our users do, the better we do.”
Of course, it doesn’t hurt that Etsy items come complete with warm, fuzzy feelings. They aren’t made in factories, they’re often one-of-a-kind and, more than likely, buyers will learn something about the seller when they purchase them. Maybe they’ll receive a handwritten thank-you note with their merchandise, or perhaps it will be wrapped in its maker’s favorite color of tissue paper. By taking away the middleman, Etsy has made its shopping experience a decidedly personal one, harkening back to a time when candle makers sold their waxy creations directly to consumers and tailors watched happily while gentlemen tried on bespoke suits.
Stinchcomb says he and the Etsy staff believe that by pairing small producers with buyers, they’re “empowering the little guy,” which helps explain the company’s sense of principle. Now that Etsy has made a name for itself in the world of handmade goods, Stinchcomb acknowledges that it could charge sellers higher transaction fees or allow advertisers to buy space on the site. But Etsy refuses to leverage its success if it risks hurting sellers or turning off buyers. “Just because you can make money off something doesn’t mean you have to,” he says. “And in the end, I think you might make more money.”
Etsy’s leaders also place a high value on transparency, going so far as disclosing their numbers to the public—even though they’re a private company. They publish financial data on their blog every month, hold “office hours” in the Virtual Labs so users can ask questions about the company and send out monthly releases that announce what’s happening behind the scenes, like new site features being developed.
Those features don’t stay in the development stage long, though. The Etsy team does test new ideas to ensure that they won’t “break” the site before making them live, but several popular site features—including “Shop by Color”— emerged from brainstorming sessions and showed up on the home page without any real data to substantiate their potential for success. However, Stinchcomb says almost none of these experiments have proven to be mistakes and that the risks the company has taken have only encouraged it to take more.
That’s why Etsy is forging ahead with a number of ventures this year, both virtual and physical. It just expanded its international presence by opening an office in Berlin, its first outside of the US. Designers are also working to make the site more accessible to people who don’t speak English or trade in dollars. And the site will push the concept of “community curation” by allowing users to create and post lists of their favorite Etsy products, regardless of whether those products are bestsellers. It’s a rather unusual approach, given that most e-commerce sites have teams of merchandisers that create lists of hot items based on a detailed analysis of what will sell best where.
You won’t find Brown second-guessing the risks Etsy is taking—the site has given her the opportunity she’s long hoped for. “All my life, I’ve said that I just want to make money making stuff, and now it has happened—it’s amazing,” says Brown, who’s living out her dream, one pillowcase at a time.
MAKING A SCENE
CHECK OUT SOME OF ETSY’S TOP SELLERS.
SKETCHBOOK
www.etsy.com/shop/sketchbook
Amber Jensen makes what she calls “functional art pieces”—purses, messenger bags and computer carriers—using materials such as canvas, leather and ultra-suede.
CRANKBUNNY
www.etsy.com/shop/crankbunny
An animation director by day, Norma V. Toraya works at night to create hand-cut pop-up greeting cards, paper puppets and other paper novelties.
FOLDEDPIGS
www.etsy.com/shop/foldedpigs
Meredith Host re-fires ceramic dishes and adorns them with handmade anatomical-themed decals of skulls, hearts and brains and quirky quotes like “bone appetit.”
HONEYBEE
www.etsy.com/shop/honeybee
Amy Moore, who lives in the mountains of western North Carolina, is a full-time studio artist who peddles metal rings, earrings and other jewelry fashioned out of recycled materials, including silver made from old film negatives.
REBICYCLIST
www.etsy.com/shop/julienjaborska
To say Julien Jaborska loves bicycles is an under-statement. He rides them, builds them, fixes them and, as he says on his Etsy profile, even enjoys “thinking about and looking at them.” He also makes wares with out-of-use bike parts like old tire belts and cog coasters.
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