This week, online-marketplace Etsy, which specialises in
crafts and other artistic items, released new guidelines that clarify its long-debated definition of “handmade.” Sellers will now have the option
to hire additional employees and work with outside manufacturers, as long as they list the information on their “About” page.
Etsy’s CEO, Chad Dickerson, released the news Town Hall-style to a crowd of Etsy sellers, and reactions were mixed. Many sellers expressed concern about their single-person operations having to compete with businesses that use factory manufacturing.
Dickerson tried to quell concern by insisting that the changes would bring more buyers to the site, which would ultimately lead to more success for all sellers.
Etsy’s success as a company is based directly on the success of its 1 million active sellers. (Etsy’s main revenue comes from charging sellers $US0.20 to list a single item for 4 months, and then 3.5% of the value of the sale if an item sells). Etsy’s sellers made $US895 million on goods from the market place last year, which was a 70% increase from 2011. Although Dickerson would not reveal numbers, he told Business Insider that the company has been profitable since 2009.
Given that success, it’s natural to wonder what’s next for Etsy: When asked about an IPO, Dickerson responded that the company had no imminent plans to go public and that IPO details have not even been considered yet. He made it clear that the company is feeling no pressure from investors to IPO or be acquired, even though it has taken $US91.7 million in funding over its eight years of existence.
Rather, the company is focusing on its merchants. Dickerson also told us that he wants the new guidelines to allow sellers to grow on Etsy and not feel alienated when their success necessitates them having to hire outside help.
Another change that Dickerson announced was that Etsy would be improving its call center. He told us that the company currently has 450 employees, but will be hiring more in the upcoming months.
One of the biggest challenges ahead for Etsy is figuring out how best to handle the shift in its traffic from traditional web to mobile. In 2010, only 3% of all e-commerce came from mobile, but that number has been growing, as Etsy itself has seen. “We need to figure out the best way to get people to buy on mobile,” Dickerson said. “That requires experimentation.”
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