Even before the latest round of layoffs
at Etsy announced this week, some sellers were looking for alternatives, expressing dissatisfaction with the direction of the company. The marketplace is experiencing a parallel of eBay's history. As marketplaces look for revenue growth to satisfy Wall Street and shareholders, they roll out changes that prove unpopular with sellers - competing ads on seller listing pages is a good example.
Many sites have tried to attract unhappy eBay sellers over the years, and the same has been true with Etsy. But many who try to create an eBay or Etsy alternative quickly realize how difficult it is to attract sellers without a base of buyers - and how difficult it is to drive shoppers to a site even when there is a base of sellers.
In some case, alternative venues make rookie mistakes - ones that can have a huge impact on sellers. Site security, technical issues, customer service challenges,... And who wants to pay fees for a new site with no buyers - yet without fees, how can a marketplace grow?
In Etsy's case, they chose to go the venture capital route, which enabled them to scale, but it meant they had to either sell the business or go public in order to provide their investors with a return. (It chose the latter.)
Bonanza founder and CEO Bill Harding weighed in on the issue in a recent interview
when he asked if Bonanza's future was secure. Bonanza is one of the few marketplaces that gained traction during a period of extreme change at eBay and has managed to survive, though it's nowhere near the scale of eBay or even Etsy and actually earns revenue through eBay sales
In the interview, Harding pointed to the downside of raising funds through venture capital:
"Last year, we spent a lot of time working to make it easy to unsubscribe from emails. Is this going to drive our profits skyward? More likely the opposite. But it's opportunities like those that earn us goodwill over the long term."
Interestingly, former Etsy CEO Chad Dickerson distanced himself from the decision to take Etsy public in a recent blog post
about becoming an advisor to Bandcamp, which he praised for its approach - "they haven't taken much outside money and maintain full control of the company."
He elaborated, stating:
"When I joined Etsy as CTO way back in 2008, the intention to be a public company had been stated months earlier ("Our goal is for Etsy to be an independent, publicly traded company.") We didn't go public until 2015, but five rounds of venture financing even before I stepped up to CEO in 2011 were very clear steps along that path. Nothing wrong with that - it's the way things work when you take venture money, unless you want to sell the company - but that's a particular path and Bandcamp has set itself up to go down a different road and that's really interesting."
Etsy still has a lot to offer sellers, and - if history repeats itself, sellers who have felt comfortable on a single venue will seek *additional* channels rather than abandon the marketplace.
Sellers of handmade goods have a number of small alternatives, as well as Amazon's new Handmade marketplace, while vintage sellers have some established marketplaces whose names will be familiar to readers.
Feel free to discuss alternative venues. Many EcommerceBytes readers have been selling online for a decade or two. What advice and warnings would you offer to colleagues who are looking for alternative marketplaces or thinking of setting up their own shop based on your own lessons learned?
Title edited on 6/25/17.