Etsy raises revenue targets (and sales fees), exciting investors (but angering sellers)

Playing to its personalized strengths, Etsy has driven its stock to record highs -- but not without jeopardizing its creative community on the road to higher profits.

June 15, 2018

Etsy, the e-commerce marketplace for designer crafts from dried-fruit earrings to bedazzled coffee mugs, raised annual revenue projections 10% based on increased transaction fees.

The jump (which increased Etsy’s market cap by $1.4B) is the company’s largest spike since going public in 2015 — a win for investors but a loss for sellers on the platform.

At the anti-Amazon, everything is crafted by happy hands

Etsy finally topped its 2015 IPO price after a long, long comeback doubling down on its strengths (AKA, homemade jewelry).

Disclaimer: Etsy doesn’t just do jewelry — also T-shirts and ironic needlepoint. 

The company isn’t resistant to tech improvements (it acquired an AI company to improve search results), but a huge driver of this past year’s growth has been differentiation from impersonal competitors.

Your uncle Malcolm is pissed…

Because he has to shell out more of his aluminum birdhouse sales. Etsy raised their transaction fee from 3.5% to 5% — which, while lower than Amazon (15%) or eBay (10%), was enough to convince some sellers to leave.

But Etsy, which increased its marketing budget 40% in 2018, hopes that those that do stay will continue to rake in that sweet, sweet crochet cash.

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