There aren’t a lot of businesses which can say that they survived the global recession of 2008 without at least taking a slight hit. And there certainly aren’t many companies which actually thrived during one of the darkest periods in recent economic history. Well, let us introduce the exception to the rule: Etsy. Etsy is an online global marketplace that didn’t just survive during the recession, it flourished. Specialising in handmade and vintage items, Etsy gave the world a platform on which to sell its wares and secure an income during those fraught economic times.
On 29 September 2008, after the bankruptcies of Lehman Brothers and Washington Mutual, the stock market saw the biggest single point loss in its history; Etsy on the other hand, had record sales. Sales figures for artisans trading on Etsy in November 2008 were $10.8million – compared to $4.2million in November 2007. And they have continued in this vein ever since. As of 2014, Etsy boasts 1.4 million active sellers, listing 29 million items to a market of 19.8 million buyers, grossing upwards of $1.93 billion in sales.
Handcrafted in an apartment in Brooklyn in 2005, Etsy’s founder Rob Kalin – alongside two close friends – designed and coded the original website; assembled the servers and even spliced the cables themselves to get the website off the ground. “From day one Etsy has been all about handmade,” says Jo Casley, Etsy’s PR and communications manager. Recognising the need for a dedicated online marketplace for hobbyists and professional merchants alike, Kalin opened up a world of craft that transcends borders, languages and devices and, “reimagines commerce in ways that build a more fulfilling and lasting world.”
Etsy focuses on new ways of doing business and actively promotes a system of collaborative consumption; establishing itself as a prime example of the sharing economy. The term ‘sharing economy’ is a socio-economic system that encourages individuals, corporations, governments and non-profits to share human and physical resources, and can be traced back to the mid 2000s. The sharing economy is an umbrella term which encompasses everything from recycling and upcycling to the distribution of used goods, crowdfunding and peer-to-peer lending. It is people who are at the heart of a sharing economy; it is the people who supply the goods and the services to make a sharing economy work.
The sharing economy is designed as an empowering new economic model, putting people and the planet at the heart of its economic system; it encourages individuals to reuse and trade in goods, rather than buy or own them themselves. Advances in technology and the internet have enabled individuals with certain skills, resources and services to connect efficiently with consumers globally, resulting in new business models, organisations and communities in both the public and the private sector.
Etsy’s sophisticated technology platform is the key to its success. In 2008, Chad Dickerson joined Etsy as its first chief technology officer and swiftly established the company’s engineering culture of treating ‘code as craft’. “Technology means that someone hand-spinning yarn in Scotland can sell it to a knitter in Paris, who in turn can create unique goods and sell them to consumers all over the world,” says Casley. Etsy’s sincerity as a modern version of an age old means of selling products allows its users to create a virtual storefront from which to trade, with no investment and virtually no financial risk. All that is needed is a little bit of imagination. And, of course, your own craftsmanship.
Originally adopted by craft makers from the east coast of the USA, Etsy soon established itself as the only dedicated marketplace for handmade, vintage and craft supplies on the internet. Etsy now has a global reach, with active sellers and buyers in almost every country worldwide. “Sellers have always been at the centre of our marketplace, and our aim in everything we do is to help creative business owners build sustainable independent businesses,” Casley told us. Etsy’s business model is based on shared success; Etsy makes money when its sellers make money. It costs $0.20 to list an item on the website and Etsy generates its profits through a 3.5% fee for each completed sale. In addition, Etsy offers value added services which make up 47% of its total revenue; these include promoted listings, discounted shipping labels and direct check out options.
But most importantly, Etsy is a company with a heart. Etsy’s ethos is simple; it has always stated that it will never put profits above people and this is reflected in the company’s core values. Etsy is committed to being mindful, transparent and humane; to plan and build for the long term; to value craftsmanship in all that it makes; to make ‘fun’ a part of everything it does and most importantly to keep it real. As a socially and environmentally conscious company, each Etsy office recycles and composts its waste, and bikes it to community farms each week; provides entrepreneurial training for artisans looking to support themselves and their families and they give all of their employees five days each year to spend volunteering in their local communities.
On top of these benefits, Etsy pays all of its part-time, temporary workers at least 43% more than the living wage; covers over 80% of health insurance premiums for employees and their families; offers counselling services, a health and benefit programme and 100% of its employees have stock or stock options.
Etsy is so committed to creating a lasting change in the world that it registered as a B Corporation in May 2012. Introduced in 2006 as a way of defining a new generation of businesses, B Corporations (or Benefit Corporations) are certified by the non-profit organisation B Lab, to meet thorough standards of social and environmental accountability, performance and transparency. Certification is granted on the basis of how well a company treats its employees; its positive contributions to the environment and its community; its relationship with its customers and the company’s overall governance. Jay Coen Gilbert, founder of B Lab, said in his TEDxPhilly Talk that he wanted to use “business as a tool for social change” and that a B Lab certification “marries the power of business with the purpose of civil society, to alleviate poverty, build stronger communities, create great places to work and to restore the environment.” Etsy joins the likes of Kickstarter and Change.org, as well as over 1200 other companies, in 33 countries worldwide, to “harness the power of business to solve social and environmental problems.”
In April 2015, Etsy became a publicly traded company, and was an instant hit on its Wall Street debut after a hugely successful IPO. Etsy’s strong core values and B Corporation certification are a rare sighting on Wall Street, its presence a stark contrast to other companies, many of whom value profits over people.
Becka Griffin, an illustrator based in Liverpool, runs a successful Etsy store, selling handcrafted prints, cards, wrapping paper and mugs, each brandishing her own original designs. Becka Griffin Illustration opened its Etsy doors in May 2011 and has recently celebrated its 4th Etsy Birthday. “Etsy was my first attempt at online selling. I don’t think I would have been able to grow my business so quickly if it wasn’t for Etsy,” Griffin told us. Originally selling her work in local craft fairs, Griffin’s Etsy success has allowed her to turn her passion into her profession, and she is now full time self-employed; her artwork her sole source of income. “I love the immediacy of Etsy. Something which is an idea at breakfast time can become a product which is for sale by lunchtime, posted out by teatime and is in the new owner’s hands the following day.” Griffin warns though of the challenges posed to first time Etsy sellers, “[don’t] hope for overnight success. I think it’s important to understand that it is hard work and it takes a long time to get to a point where you can give up your day job – but ultimately, given hard work and patience, it absolutely is possible.” Griffin runs monthly workshops to pass on her Etsy knowledge and expertise, to fledgling sellers, “I love interacting with other sellers face to face,” says Griffin, “I’ve made a number of really close friends through selling online.”
Etsy’s community of millions is what binds it together and what makes it truly unique; it is a company with community at its core, and it works hard to make Etsy accessible on a global scale, surpassing language barriers and myriad cultures. Claudia Varisio, an Etsy seller based in London, specialising in prints and poster art says, “I like the fact that [Etsy] encourages people to buy and sell handmade goods from every corner of the globe. It has a true international vibe, and it also offers translations in several languages.”
We asked Casley if there were any particular markets that they wanted to target, “We do know that a high percentage of our sellers are women, so we are excited to bring more men into craft – but really we are just excited to be supporting creative independent businesses everywhere, and giving anyone with a craft skill the means to build their own business as either their main or supplemental income.”