Sent on April 12, 2022, 9:00 am
Anger is growing among Etsy sellers. The online platform for selling vintage and handcrafted products is facing a “boycott” from some of its sellers this week. At least 5,000 of them suspend their activity on the site, denouncing the policy and a new increase in transaction fees (they rose from 5 to 6.5% on Monday), while the group shows iron health from the Covid-19 pandemic. A petition to this effect has collected more than 43,000 signatures.
A marginal sling, on the over 4 million sellers claimed by the American company in the world, but which testifies to the evolution of the company’s policy and philosophy. Founded in 2005 and listed on the stock exchange since 2015, the platform initially promised independent creators to easily sell their creations without having to worry about logistics (transaction and delivery). Gradually, he broadened his horizons, to the point of sacrificing some of his initial values, according to his opponents. Here are three things to know about Etsy.
1. Etsy is a symbol of “do it yourself”
Launched in 2005 in New York by three founders, the platform quickly became successful, initially offering the marketing of wooden furniture from one of the founders, Robert Kalin. The site has become one of the symbols of do it yourself (“do it yourself”), independent creators – including many women – who find there an easy solution to sell their handcrafted creations or their vintage items (which must be at least 20 years old ).
The promise of the site: “turn your passion into a profession”. Etsy takes care of the payment and delivery system, receives transaction fees (set at 3.5% through 2019) and is remunerated, among other things, by advertising. When it comes to business outcomes, the situation remains mixed, as sociologist Anne Jourdain pointed out in 2018, who estimated that only 1% of Etsy sellers earned more than the minimum wage in 2017.
2. In 2017 he made a strategic shift that pushed value to Wall Street
The success of Etsy’s IPO in 2015 (the company raised more than $ 200 million) and the steady increase in its sales did not stop the site from being in the red for several years, even before its introduction to Wall Street. (in 2015 the group’s losses amounted to 54 million dollars).
In 2017, the company’s financial difficulties led it to lay off 22% of its employees and close two of its French sites it had acquired (AlittleMarket and AlittleMecerie). The group – which has a new CEO, John Silverman – therefore renounces some of its principles that shape its original business model. Specifically, the company is drawing a line under its “B Corp” status (certification of a nonprofit organization), ignoring Etsy’s original social and environmental commitment.
The health crisis, which is driving online commerce everywhere, is helping to raise the bar. In 2020 Etsy makes more than double the turnover of 2019. The American company sees its profit multiplied by seven from one year to the next. On Wall Street, value growth follows the same dynamic, with the second strongest increase in 2020, just behind Tesla (+ 301%). This led to its entry into the S&P 500 index in September. The following year, the group continued its momentum with a jump in turnover of nearly 35% and a sharp increase of 41%.
Some key Etsy figures in 2021
– 120 million items for sale
– $ 1.73 billion in revenue
– 349 million in net profit
– 4.4 million active sellers
– 81.9 million active buyers
– 2,402 employees
3. Its change of model shakes the original spirit
The focus is now on profitability, marking a change in the group’s policy, explains the “New York Times” in a poll published in 2017. But Etsy is accused of wanting to “grow to grow” at the expense of small creators – as reported by the “Good work institute” organization, founded by Etsy two years earlier. Advertising is becoming more and more present on the site and the sellers, competing, see “dropshipping” and mass-produced products flooding the site. So much so that the search for artisan products has become increasingly difficult for “small” sellers, affecting their income.
An operation denounced today by discontented sellers, who particularly denounce the pressure of small businesses to remain visible and competitive. Boycott or not, society shouldn’t change course. What Etsy risks losing, however, is his reputation, estimates a sociologist of the newspaper “Fortune”. “If the company wants to present itself as a small business market to support individual artisans, this will be mitigated by people who say they are exploited”, he analyzes.