“It’s really important to understand Etsy is not a craft marketplace,” Etsy CEO Chad Dickerson told investors and Wall Street analysts at the Citi Global Technology Conference on Thursday. Etsy operates in over 50 retail categories, he explained.
“Sellers on Etsy sell everything from furniture to electronics to clothing to jewelry and everything in between.”
The comments came as the CEO tried to explain a frequent question from Wall Street: What was Etsy’s addressable market?
Dickerson called Etsy a technology company. He turned a negative – the fact that Etsy has very little structured data – into a positive by saying it resulted in Etsy developing strength in big data. He also said the fact that a third of the American workforce consists of freelancers is a positive for Etsy.
Seller services has become a growing source of revenue beyond the listing and commission fees Etsy charges sellers. Seller services include Direct Checkout; Promoted Listings: and Shipping Labels.
The majority of transactions on Etsy go through Direct Checkout and represents 90% of GMS on the entire marketplace. And he said 40% of sellers are using at least one of its seller services.
Dickerson provided a resounding testimonial for Google Product Listing Ads – the paid ads that consumers see as Google Shopping listings.
“The strength of Etsy’s brand and the loyal customers we have has meant we haven’t had to spend a lot of money on marketing relative to companies you might compare us to,” he told investors – 90% of Etsy’s traffic came from unpaid channels in 2014, and that trend continues.
That means Etsy has had low customer acquisition costs. That’s both a strength and an opportunity, Dickerson said.
But Etsy has increased the marketing spend as a percentage of revenue over the past year. Google PLA (GPLA) has excellent ROI. “We’ve been able to spend in an ROI-positive way.” He called GPLA Etsy’s strongest channel.
The CEO also sounded unconcerned about Amazon. Etsy is geared around authorship and provenance rather than price and convenience. One of the areas Etsy educates sellers on is pricing, encouraging them to raise their pricing. “We discourage price-based competition.”
“We want the work of artisans and makers to be respected,” Dickerson said.
When asked about the impact of Amazon Handmade, Dickerson said it was too early to comment. Fifty percent of Etsy sellers already sell off-Etsy, and he broke down the numbers for those multi-channel sellers: the number one channel is Etsy; number two is craft fairs and in-person; number three is “other offline”; and in a distant number four is other platforms. “We already have experience with Etsy sellers selling on other platforms,” he said.
“Our brand really stands for uniqueness, and that’s why buyers come to Etsy.” Dickerson said Amazon had reached out to Etsy sellers, but said “we are really well positioned.”
Comment on the AuctionBytes Blog.