Etsy Marketing Strategy

In 2022, Etsy had 88.3 million active buyers, over 35 million repeat buyers, and 7.6 million habitual buyers. Etsy’s funnel is skewed toward enabling active buyers to become habitual buyers, which is critical for long-term sustained growth in a two-sided digital marketplace.

Marketing StrategyDescriptionExampleImplicationsIntegration
Community-Driven MarketplaceEtsy positions itself as a community-driven marketplace, emphasizing the connections between buyers and sellers. It fosters a sense of belonging and encourages users to engage with each other.Etsy encourages sellers to share their personal stories, creative processes, and product inspirations. Buyers can communicate directly with sellers, providing feedback and requesting customizations.– Creates a unique and personalized shopping experience. – Builds trust and loyalty among users. – Generates word-of-mouth marketing as users share their positive experiences.Etsy’s community-driven approach is integrated into its platform, allowing sellers to connect with buyers, share their stories, and provide excellent customer service, which enhances the overall shopping experience.
Customization and PersonalizationEtsy allows sellers to offer customizable and personalized products, catering to individual preferences and unique tastes. Buyers can request modifications to products, leading to one-of-a-kind items.Sellers on Etsy can offer personalized jewelry, custom artwork, and customized clothing. Buyers can communicate their preferences and work with sellers to create unique products.– Attracts buyers looking for personalized and unique items. – Encourages repeat business as buyers return for more customized products. – Requires sellers to offer a range of options and engage with customers to fulfill their requests.Etsy’s platform integrates customization features, enabling buyers and sellers to collaborate on unique and personalized products, reinforcing its commitment to providing distinct and tailored offerings.
Content Marketing and BlogEtsy maintains a blog with articles and guides that provide value to both buyers and sellers. It covers various topics, including crafting tips, home decor ideas, and gift guides. This content helps users discover new ideas and products.The Etsy blog features articles on DIY home improvement projects, gift ideas for special occasions, and artisan profiles. These articles offer inspiration and useful information to Etsy’s community.– Drives organic traffic to the Etsy platform. – Positions Etsy as a source of inspiration and knowledge. – Supports SEO efforts and encourages users to explore and engage with the platform.Etsy’s blog is integrated with its platform, offering users a valuable resource for discovering ideas and products while promoting the community’s creative spirit.
Email Marketing and NotificationsEtsy uses email marketing to keep users informed about new products, shop updates, and special promotions. Buyers receive personalized recommendations and reminders to complete their purchases.Etsy sends personalized email recommendations based on users’ browsing and purchase history. It also notifies buyers about shop updates, sales events, and limited-time offers.– Encourages return visits and repeat purchases. – Keeps users engaged and informed about relevant products and sellers. – Promotes special promotions and discounts to drive sales.Etsy’s email marketing campaigns are integrated with its platform, delivering personalized content and product recommendations to users’ inboxes, reinforcing their connection to the Etsy community.
Social Media EngagementEtsy leverages various social media platforms to connect with its community, showcase products, and promote sellers. It encourages users to share their favorite finds and interact with the brand.Etsy maintains active profiles on social media platforms like Instagram, Pinterest, and Facebook. It shares user-generated content, product highlights, and stories from Etsy sellers.– Increases brand visibility and reach. – Engages users and encourages them to share their discoveries. – Drives traffic to the Etsy platform.Etsy’s social media presence is integrated with its platform, fostering engagement and encouraging users to explore the Etsy community and discover unique products through social channels.

Why is it so hard to build a platform?

A platform business model is one of the most complex to build because it’s tough to manufacture so-called network effects from scratch. Indeed, when launching a platform, there are two core issues:

1. it’s the chicken and egg problem of distribution. In short, where do you start in kicking off the network?

2. it’s the ability, over time, to reinforce, strengthen and speed up the network so that from a bunch of active users, you get buyers, repeat buyers, and habitual buyers. 

Etsy’s chicken and egg problem

When it comes to the chicken and egg problem, this is the core issue of any platform trying to kick off its network effects.

In Etsy’s specific case, since it’s a two-sided marketplace with sellers and buyers, the question is whether to start or prioritize supply over demand.

Of course, when kicking off a platform, you want to take care of both supply and demand. But, you want to make sure what’s the priority in the short-term.

For instance, in Etsy’s case, the priority initially was to ensure enough sellers listing unique items on the platform.

Over time, these listings turned into traffic, which turned into sales.

Etsy’s accelerating funnel

For a digital platform to build long-term success, it’s critical to enable users to become buyers.

Buyers to become repeat buyers.

And repeat buyers to become habitual buyers.

This is where engineering, marketing, and distribution come together to create a growth funnel, where the platform is structured to ensure that sellers keep listing unique items.

Active buyers become repeat buyers and habitual buyers.

At community levels, these were some of the initiatives that worked:
– Continued improvement of messaging between buyers & sellers.
– Continued to expand the use of seller and buyer videos on Etsy.
– Purchase Protection.
– Improved delivery transparency in non-U.S. markets.
– Stepped-up Handmade Policy enforcement.
– Improved clarity for returns.

But there is also a tech component that was key to this success.

Etsy has been massively investing in its internal search infrastructure in recent years.

Etsy revamped its internal search to make it a visual (images and videos as primary avenues to shopping) recommendation engine (customized experience for buyers based on previous journeys); Etsy has restructured itself into a recommendation engine for its buyers!

Key takeaways

  • Platform business models are hard to build because of the initial chicken-and-egg problem and the inability to transform traffic into buyers.
  • Etsy has a flywheel to ensure that unique listings turn into organic traffic, which drives active buyers.
  • In turn, customized experiences, seller services, and trust enhancement help the platform transform active buyers into repeat and habitual buyers!

Key Highlights

  • Platform Complexity:
  • Etsy’s Network Development:
    • Etsy’s platform involves a two-sided marketplace with sellers and buyers.
    • Prioritizing supply (sellers) and demand (buyers) is crucial at the outset.
    • Initial priority for Etsy was to ensure a sufficient number of sellers listing unique items.
  • Accelerating Funnel:
    • Long-term success relies on enabling users to progress through the funnel: active buyers to repeat buyers, and repeat buyers to habitual buyers.
    • Engineering, marketing, and distribution contribute to building this growth funnel.
  • Community Initiatives:
    • Etsy implemented strategies to enhance the buyer-seller relationship, transparency, and protection.
    • Investment in improved delivery transparency, seller and buyer videos, and enhanced messaging.
  • Tech Component:
    • Etsy’s investment in its internal search infrastructure played a vital role in its success.
    • Revamping internal search to be a visual recommendation engine personalized for buyers’ previous experiences.
  • Etsy’s Flywheel:
    • Etsy’s strategy involves turning unique listings into organic traffic, leading to active buyers.
    • Customized experiences, seller services, and trust enhancement help convert active buyers into repeat and habitual buyers.
  • Key Challenges:
    • Platform models face initial challenges in balancing supply and demand and in transforming traffic into buyers.

Read Next: Etsy Business Model, Etsy Flywheel.

Related Visual Stories

eBay Business Model

eBay’s core business is a platform business model that makes money from transaction fees through its marketplaces. In short, eBay primarily makes money by charging fees on successfully closed transactions. For instance, in 2021, on an $87 billion worth of gross merchandise value sold on eBay, the company generated $9.77 billion in transaction revenues at an 11.19% take rate (fee).

How Much Does eBay Take?

In 2021, eBay’s take rate was 11.19%. It means that eBay takes a cut of over 11% for each transaction happening through the platform. For instance, in 2021, on a total of over $87 billion in gross merchandise value on top of the platform, the company generated almost ten billion in transaction revenues.

eBay Bidding System

eBay bidding is a way for buyers to bid on a product whose sale price is decided by auction. The bidding process itself is automated, with eBay acting on the buyer’s behalf.

eBay Organizational Structure

eBay was until recently a multi-divisional (M-form) organization with semi-autonomous units grouped according to the services they provided. Today, eBay has a single division called Marketplace, which includes eBay and its international iterations.

Etsy vs. Shopify


Etsy Funnel

In 2022, Etsy had 88.3 million active buyers, over 35 million repeat buyers, and 7.6 million habitual buyers. Etsy’s funnel is skewed toward enabling active buyers to become habitual buyers, which is critical for long-term sustained growth in a two-sided digital marketplace.

Etsy Flywheel


Read Next: eBay Business Model, Etsy Business Model, Etsy Marketing Strategy, Business Models.

About The Author

Scroll to Top