Online marketplace Etsy, which has made a name for itself showcasing handcrafted goods, moved beyond kitsch and debuted its IPO at $31 a share.
Not bad for an e-commerce platform that so far hasn’t posted a profit and sells handmade items, ranging from baby clothes to state-shaped cheese boards. The question now is whether the global marketplace can scale its business strategy as a public company and keep its community vibe. But canvassing the site for successful small business owners reveals how some savvy entrepreneurs already are successfully mining the platform to rake in six figures in sales.
Etsy shares have surged since the initial public offering at $16 a share, doubling to $32.
Etsy boasts more than one million active sellers, with access to 19.8 million active buyers on the site. And the company says it achieved just shy of $2 billion in gross sales last year, with buyers or sellers in nearly every country.
“We’ve always seen Etsy as a tool and another way to gain exposure,” said Amy Stringer-Mowat. She along with husband Bill Mowat started their Brooklyn-based e-commerce shop, AHeirloom, in 2011. They crafted wooden cheese boards into the shapes of their home states, Connecticut for him and Michigan for her, as wedding favors.
They featured the cheese boards on Etsy, and orders poured in. During the holiday season, sales can hit six figures a month. The couple hauls in $25,000 to $45,000 in revenue a month. “We really like the idea of people making stuff on their own,” Stringer-Mowat said.
Here’s how Etsy works: setting up a virtual shop on the site is free, but listing products costs $0.20 cents each for four months or until the goods sell, and then Etsy pockets 3.5% of each sale.
The decade-old Brooklyn-based company has taken advantage of more entrepreneurs making handmade goods. Shoppers in turn have been attracted to the virtual community that exudes authenticity and offers one-of-a-kind items not found in big-box retailers.
While there’s no guaranteed market for sellers, of course, the cheese board makers and other sellers on the platform have reached success and recognition that even they say can be hard to fathom. “We had to make all fifty states eventually,” Stringer-Mowat said. “We were surprised, but it comes down to the fact that people don’t really live where they’re from anymore. So there’s a bit of nostalgia. And it’s a useful item,” Bill Mowat said.
Other sellers like Alicia Shaffer used Etsy to strategically phase out of a brick-and-mortar store.
The Livermore, California-based mother of three started selling goods on Etsy in 2011. She seeked extra income on the women’s clothing she sold out of her former physical store called Prim. For Etsy, she focused on listing headbands and accessories at first, and quickly gained traction, expanding further into apparel.
“The first time I realized we were onto something—we had ninety sales in one day, three weeks into opening,” Shaffer said. “I was sitting on my living room floor crying thinking I had no idea how I was going to get this stuff out.”
But Shaffer did, and today her monthly revenues can range from $65,000 to $72,000. During the holidays, they can do more than five times that amount. Her rapid online growth prompted her to close her store—a no-brainer, she said.
“I made the decision to split [away from the physical store] and I haven’t looked back,” Shaffer said. “This is something you can do full time, and quit your day job. Do what you love and make money off of it.”
From Unemployment to a Beyoncé Sale
Reuben Reuel, another designer, turned to the platform after losing his job. Reuel used his unemployment cash to fund his passion apparel project in 2012. He sells handmade printed skirts and tops through his online shop, Demestiks New York.
Today, Reuel brings in more than six figures in sales annually from the business he runs on Etsy. His staff includes an assistant and seamstress. The New York City-based seller even caught the attention of Beyoncé, who posted a photo of herself on Instagram in 2014 wearing his designs.
“There were some tears,” said Reuel, explaining how he learned through friends the singer was wearing his designs. “It was exciting to see my work on someone who is so famous—it got my name out there more. I really appreciate the people out there helping the little guys like me, the independent designers.”
It remains to be seen what Etsy’s new identity as a publicly traded company may mean for sellers like Reuel, mom Shaffer and cheese board-making Mowats. But sellers say they hope for continued authenticity on the site and more exposure.
“We really like the idea of people making stuff on their own. They give us the freedom to be able to be makers, to do things hands on,” Stringer-Mowat said.
“And if there’s more people coming to the site because of the IPO, then that means more visitors, and potentially more sales,” husband Mowat said.
Image credit: CC by Jared Tarbell