Online store gateway to craft production
URL = http://www.etsy.com
"The future could be one of thriving cottage industries and skilled artisans lovingly producing custom-made wares. Etsy apple jacket
An "apple jacket," by jacquelineknits, is just one of the handmade items you can find on Etsy. Click to view previous image 1 of 2 Click to view next image
That's the vision of Etsy, a U.S.-based Web site that describes itself as "an online crafts fair." But unlike your local Sunday-morning market, Etsy's crafts fair has some 200,000 stall holders, who have this year sold just under $50 million-worth of their homemade goods.
The site was conceived and launched in 2005 by Rob Kalin, a carpenter, among other things, who was looking for somewhere to sell his work online. At the time, the only real outlet was eBay, but Kalin was looking for something different, something that would provide a place for small-time artisans to sell their creations.
But according to Etsy, the site is more than simply a good business opportunity. "One of our goals is to change the way the economy works. It's become normal for people to buy online and the spread of the online buying culture means it has become very democratic. If you have a computer and camera and you like to make things, you can make and sell anything you want. I consider it liberating for people," an Etsy spokesman told CNN.
If the site's popularity is anything to go buy, it's a model that's proved tremendously successful. But the reason for that success is that Etsy has tapped into a growing pool of crafters and a demand for handmade goods.
In the U.S. especially, there has recently been a resurgence in the popularity of handmade goods. The idea has even emerged of crafting as a form of political activism -- the term "Craftivism" has been coined to describe the idea of 'making your own' as a statement against runaway consumerism and the homogeneity of mass production. A survey carried out by Etsy earlier this year revealed the average age of its crafter/sellers to be 35 -- a far cry from the stereotypical image of grandma knitting a scarf in her rocking chair.
Tapping into that zeitgeist, Etsy has tried to create a crafting community by hosting online crafting workshops and offering advice on how to turn a hobby into a business. The site encourages interaction between crafters, but crucially, it enables interaction between buyers and sellers." (http://www.cnn.com/2008/TECH/science/09/18/craft.revival/index.html)
From a more extensive profile in the New York Times:
"Etsy, a very much for-profit entity that bills itself as “your place to buy & sell all things handmade.” Etsy does not fulfill orders from an inventory; it’s a place where sellers set up virtual storefronts, giving the site a cut of sales. While eBay rose to prominence nearly a decade ago as an endless garage sale for the auctioning of collectibles and bric-a-brac, Etsy is more of an online craft fair, or art show, where the idea is that individuals can sell things that they have made. How many such people can there be? At last count, more than 70,000 — about 90 percent of whom were women — were using Etsy to peddle their jewelry, art, toys, clothes, dishware, stationery, zines and a variety of objects from the mundane to the highly idiosyncratic. Each seller has a profile page telling shoppers a bit about themselves, and maybe offering a link to a blog or a MySpace page or a mailing list; most have devised some clever store or brand name for whatever they’re selling.
Maybe you’re interested in a “random music generator” called the Orb of Sound ($80), built by an Australian tinkerer calling himself RareBeasts. Or a whistle made out of a tin can and bottle caps ($12), by loranscruggs, near Seattle. Or the “hand-painted antique ceramic doll-head planters” sold under the name Clayflower22 by a retired schoolteacher near Las Cruces, N.M. Or the “Kaleidoscope Pearberry Soapsicle” ($5), made by a woman in Daytona Beach, Fla., who calls her shop Simply Soaps. Or a porcelain bowl with an image of a skull on it, from a Chicago couple who call themselves Circa Ceramics. Or an original painting from an artist in Athens, Ga., who goes by the moniker the Black Apple.
Browsing Etsy is both exhilarating and exhausting. There is enough here to mount an astonishing museum exhibition. There is also plenty of junk. Most of all there is a dizzying amount of stuff, and it is similarly difficult to figure out how to characterize what it all represents: an art movement, a craft phenomenon or shopping trend. Whatever this is, it’s not something that Etsy created but rather something that it is trying to make bigger, more visible and more accessible — partly by mixing high-minded ideas about consumer responsibility with the unsentimental notion of the profit motive.
On July 29, Etsy registered its one-millionth sale and is expecting to hit two million items sold by mid-December. Shoppers spent $4.3 million buying 300,000 items from the site’s sellers in November alone — a 43 percent increase over the previous month. Thus far in December, the site has had record-breaking sales every day. Only about two years old, the company is not currently profitable but is somewhat unusual among Internet-based start-ups of the so-called Web 2.0 era in having a model that does not depend on advertising revenue. It depends on people buying things, in a manner that the founders position as a throwback to the way consumption ought to be: individuals buying from other individuals." (http://www.nytimes.com/2007/12/16/magazine/16Crafts-t.html?)
Etsy and the Long Tail of user-generated craft
"The best example that showcases the business possibilities of the DIY Craft movement is Etsy, a social commerce marketplace conceived by Rob Kalin along with Chris Maguire and Haim Schoppik in early 2005. It has now over 6.2 million members (400,000 of them are sellers) and it’s currently selling 6.5 million items. Gross Merchandise Sales started at $ 166,000 in 2005, were $ 180.6 million in 2009 and in 2010 (September) were $ 206 million. In January 30 2008 Etsy was reported being “almost break-even”, and received $ 27 million in Series D financing.
Etsy’s main business model is creating a marketplace for the long tail of DIY Craft, charging a listing fee of 20 cents for each item and getting 3.5 % of every sale,with the average sale about $ 15 or $ 20. Etsy also has another income from Showcase, Etsy’s advertising program designed for its sellers. By purchasing a 24 hour spot in the Showcase, Etsy sellers highlight their featured items in prominent places on the site to increase shop awareness and boost sales. Prices are $ 15,00 for Holiday and Main Showcase, while for the other showcases the price is $ 7,00.Therefore, there are even doubts if the core business of Etsy is providing a marketplace for handmade goods or rather an advertising business. Moreover, Etsy has its own API to lets developers tap into the Etsy community, building their own Etsy-powered applications for the web, desktop and mobile devices. In 2007 Etsy was reported being interested in expanding Etsy’s offline ventures: Etsy started running workshops open to local crafters and would like to provide support services, such as business advice and small loans in the future.
There are some criticism of Etsy’s business model, as well, since it seems to be not really a viable model for the makers. Only 4% of Etsy sellers are males, the average seller is a 35 years old woman and is is often a married woman with (or about to have) young children, with a higher-than-average household income, and a good education. Most probably Etsy attracts women with the hope of successfully combining meaningful work with motherhood. Unfortunately, it is very hard to make a living only with Etsy: very few sellers have done it, and the community confirms it. In fact, it seems that Etsy exerts a downward pressure on prices, since all the sellers (that live in different cities) are in direct competition and can’t increase volume (the usual answer to slim margins), because the items are artesanal and not mass-produced.
Megan Auman of craftmba.com suggests that Etsy should be regarded not just as a marketplace, but as a business incubator accelerating the successful development of DIY and Microproduction Craft businesses through an array of business support resources and services. Etsy offers a low-cost entry point into the marketplace, but as a business grows, it should think about leaving Etsy and have a different e-commerce store, a more proper step for building a rising brand (just like White Elephant Vintage did, for example). Moreover, as we said before, prices in Etsy will likely not rise because of the strong competition, and this is another reason for moving out of Etsy when the skills and the sales of a seller improves." (http://www.openp2pdesign.org/2011/open-design/business-models-for-diy-craft/)