Etsy marketplace GMS (Gross Merchandise Sales) was $3.3 billion in the 4th quarter of 2024, down 8.6% year-over-year. The company said the decline was a result of pressure on consumer discretionary product spending, challenging year-over-year comparisons in a shortened holiday season, category mix, and a highly promotional and competitive retail environment.
Etsy also owns Depop and Reverb marketplaces. Consolidated GMS (sales for all 3 marketplaces) was $3.7 billion, down 6.8% year-over-year and down 6.9% on a currency neutral basis.
Despite the year-over-year decline in sales, Etsy said it had its highest-ever quarterly revenue in the fourth quarter – little solace to sellers unless they also happen to be shareholders in the company.
Etsy also provided the following information in its 4th quarter and full year 2024 earnings report on Wednesday:
- Etsy marketplace GMS was weak on a year-over-year basis in October and November, with relative acceleration in December, which is partially attributed to the Cyber 5 timing shift.
- Active buyers were 89.6 million, decreasing 2.6% year-over-year.
- We reactivated a record 9.8 million lapsed buyers, up 1.3% from the prior year, and we acquired 6.9 million new buyers.
- GMS per active buyer on a trailing twelve month basis was down 3.5% year-over-year to $121 in the fourth quarter.
- Our number of habitual buyers was 6.4 million, down 9.5% year-over-year.
Etsy CEO Josh Silverman said in today’s announcement:
“Despite facing significant GMS headwinds in 2024, we are proud to have delivered year-over-year revenue growth and very strong profitability, while simultaneously investing in our future. Foundational improvements in the Etsy marketplace, particularly in quality, reliability, and in making our app a place for discovery, are already enhancing customer experiences – which we believe will further differentiate the Etsy experience, driving consideration and purchase frequency as we work to get back to GMS growth.”
Etsy added that it had focused on providing a reliable and joyful experience during the holiday season, including the following points of particular interest to sellers:
- Implemented machine learning models into determining estimated delivery dates (“EDD”) for the first time, making the average EDD more than two days sooner for U.S. Domestic orders placed during the peak holiday shopping season;
- Added new shipping partners in the United States and Canada to help sellers more efficiently manage and ship orders;
- Expanded the use of conversational AI in support channels, allowing us to significantly scale support availability for our community;
- Launched the option for eligible buyers to receive their refunds as Etsy credit, making it easier to spend on another Etsy item;
- Developed more consistent communications to help sellers understand enforcement actions.
The full press release is on the investor section of the Etsy website.
Funny how they can make more money on less sales. I wonder where the money came from.
Milking ad sales from sellers. Plus, costs $10 to open a “shop” now. ETC. It’s a shell game. Etc. The revenue game for them is flipping from sales to fees.
“Developed more consistent communications to help sellers understand enforcement actions.”
Translation: We trained the robots to tell sellers why and how we took more of their money.
Do a search on Etsy. Nearly every item listed is “Ad by seller.” Etsy SALES are down, but REVENUE is up because they’re milking the sellers.
Personal experience: Etsy moved to far from being a platform to take our business to the larger market and continues to try to RUN our businesses. Costs are up, frustrations are up, search inclusion is a nightmare, and if you sell vintage (like me) you are totally 2nd class business-citizen.
“Despite the year-over-year decline in sales, Etsy said it had its highest-ever quarterly revenue in the fourth quarter – little solace to sellers unless they also happen to be shareholders in the company.” It isn’t rocket science to read between the lines here.
Personally I struggle with leaving Etsy but selling online stand alone and sales tax requirements in 50 states (thank you Congress) keeps me from jumping out just yet.
Feeling a strong pull to go back to group shop days in the real world. Etsy – you had a good thing for a while…..
*** All that Overseas Junk ***
I make and sell jewelry at $300 and I have a great repeat customer base who appreciates the quality of my pieces. However, as Etsy went overseas to find new Sellers, the site is now overloaded with cheap imports; with bad photos and bad reviews….because “you too can have a diamond ring for $19.95”.
GMS is down because of all the cheap junk with low price points.
Etsy created this problem because they decided to no longer support quality products.