Business Case Presentation

Dominique MeinkeMarketing 476

June 18, 2013

ABOUT ETSY

HISTORY OF ETSY

Started by iospace on June 18, 2005

Founded by Robert Kalin, Chris Maguire and Haim Schoppik

From the Italian “etsi,” meaning “oh yes.”

Online marketplace (p2p = people to people)

Mostly DIYs (15 million in 150 countries)

Products listed for $.20Once product sells, Etsy

charges 3.5% fee on price of item

Offi ces in Brooklyn, San Francisco and Berlin

OVERVIEW

HOW ETSY WORKS

DECENTRALIZATION

Considered a decentralized network

Non-linear: Users can connect with one another (users), as well as central node (Etsy)

Adaptive: Organizes self through functions

Self-organized: Users learn to create stores, pages

Organized complexity: “Bottom-up” properties emerge, including page marketing, pricing, branding, etc.

ETSY’S ECO-SYSTEM

Competitors: Artfi re, Big Cartel, Bonanza, Cargoh, Coriandr, DaWanda, Folksy, iCraft, Made it Myself, Not on the High Street, Storenvy, Supermarket, Yokaboo, Zibbet

COMPETITORS AND PARTNERS

Partners: Nordstrom, West Elm. Paypal for payments

Other Partners (social media): Pinterest, Facebook, Twitter, Google, Flickr, etc.

COMPETITORS AND PARTNERS

OTHER PRODUCTS, SERVICES

USER BASE, CUSTOMERS

Investors: Union Square Funding (Flickr), Accel Partners and Index Ventures

Users: Buyers, Sellers / Stores

Employees of Etsy

STAKEHOLDERS

Sellers set up “Etsy stores” to sell products, provide inventory (posted for sale)

Buyers purchase products from Etsy stores, bringing buyers and sellers together from all over the world.

Etsy charges fees, maintains site Investors contribute funds to

allow growth Etsy created pages for “groups”

and “teams” to connect to sell products together

Etsy stores create products for branding to other Etsy stores

HOW ETSY WORKS

SUCCESS

BUSINESS AND REVENUE

Task of obtaining and managing inventory given to community (or “crowd”) through open call

Uses “Individual Production” to create inventory

Relies on “user to user” distribution

CROWDSOURCING

Funding through investors

Revenue created through selling fees

Other revenue from paid search ads

FUNDING AND REVENUE

Long-tail goods: large number of unique items with small quantities of each

Etsy long-tail goods: Handcrafted, unique items with lesser quantities

DISTRIBUTION

REVENUE MODE AND INTELLECTUAL

PROPERTY

Win-win: Both Etsy and seller win with each sale, revenue earned

REVENUE MODE

Policies to protect Etsy property

Profi ts shared between Etsy, sellers

INTELLECTUAL PROPERTY