Yahoo Finance Etsy seller: ‘2020 was one of the best years I’ve ever had’
Stay-at-home mom Staci Pompey created her Etsy (ETSY) store in 2015, but it took the coronavirus pandemic for her to create her first product. She bought a sewing machine and made her first mask on Mother’s Day 2020. Every day she’s up by 5 a.m., gets four hours of sewing and personalization done, homeschools her two daughters all day starting at 9:30 a.m., and then caps off her evening with another three hours crafting.
“When the pandemic happened, I wanted to make extra money. I didn’t know what the future would hold. I thought, ‘I’m bored, I have nothing to do, and I need money — these kids are home. My husband is an amazing help in my business. He’s kind of the backbone of it. He’s creative in listing the products and marketing the product. He was a huge part of the success. It’s a team effort,” she told Yahoo Finance.
Pompey, 34, named her store AvaReign Creations after her two daughters. She has expanded her product mix to include dog bandanas, onesies, ornaments, and tote bags. She has sold over 7,500 items and has made close to six figures in revenue over the last seven months.
Pompey is one of Etsy’s 3.7 million sellers who have been extraordinarily busy this year. The number of active product listings was 80 million, representing a 20% year-over-year increase, according to the company’s third-quarter earnings report on Oct. 28. A platform for passion projects and primary sources of income for entire families alike, Etsy and its sellers have reaped the benefits of the e-commerce boom and the increasing appetite for something a little more personal during a year that has needed some sparkle. As Pompey puts it, “What you really want, you find on Etsy.”
1 million new buyers every week
While Etsy has been around since 2005, it was initially a niche destination for kitschy and unique homemade chotskies. Consumers could find special items there, but they also found inconsistencies in quality as well as shipping costs and times — making it a relatively cumbersome experience.
Josh Silverman has been crafting a fresh new chapter for the company. Silverman, whose resume includes Evite co-founder, Skype (MSFT) CEO, and president of consumer products at American Express (AXP), first joined Etsy’s board of directors before becoming the chief executive in May 2017. Shares of Etsy are up 1593% since Silverman took the helm and popped 346% in 2020 alone (compared to the S&P 500’s 54% and 14.37%, respectively).
Sixty nine million people have bought something on Etsy in the last year, and the platform has been adding a million new buyers each week. To put that in perspective, the company added 19 million buyers in all of 2019, Silverman told Yahoo Finance in November.
“We’ve seen a huge surge of people discovering Etsy for the first time and a lot of people who hadn't bought on Etsy in three or four years are discovering that Etsy has so much for sale and on-time shipping looks great and customer reviews look great and the Etsy sellers are doing an amazing job of delighting buyers at this time when it matters most,” he said.
Sellers like Dustin Relethford have had a banner 2020, in spite of the logistical setbacks and supply chain hurdles along the way. He and his wife Jeanenne Richert co-founded West Path, a San Diego startup that makes sustainable yoga gear, surf accessories, and apparel, in 2015. They make and design all of their products, which range from their top-selling surf poncho and Aztec blankets to cushions and wall planters, and ever popular pet products coming in the new year.
“It’s quite a capital intensive business model — even though we're profitable, it's quite a challenge to keep our cash reserves flat, as we need to constantly expand our inventory on hand to keep up with the ever increasing demand,” Relethford said.
Though West Path is available across other platforms, Etsy has been a small but key driver for discovery, generating $100,000 in revenue for the brand. While the bulk of its sales come from Amazon (AMZN) and its own website, Relethford says the company saw 32% year-over-year sales growth in 2019, compared to 20% across all channels. He projects 2020 revenue from Etsy to have grown 290% year-over-year, compared to the 55% figure across all its channels.
The umbrella for ‘collective success’
As larger sellers like West Path take a multi-channel approach, Silverman isn’t losing sleep about more sellers pursuing other avenues, whether it’s going to Amazon or building a website on Shopify (SHOP) or Squarespace. In fact, he likens Etsy to a safety net that many sellers may not be able to find elsewhere.
“What we see is when an Etsy seller expands and goes multichannel, their sales on Etsy grow and typically work faster and the only thing harder than succeeding on Etsy is succeeding off Etsy. They're a blade of grass in a tornado and trying to set up their own shop and build a brand and rise above the noise. They want sales and it turns out that when setting up your own shop you end up spending a lot of money on things like marketing, advertising and promotion and it's awfully hard to build — to make a profit that way,” Silverman said.
By tapping into the Etsy brand, Silverman noted that artists have access to the millions and millions of buyers who know the company and value its unique goods over commodity products. “Etsy provides that umbrella that allows our sellers collectively to succeed and we think there's no substitute for that,” he said.
Apart from the perennial bestsellers like home furnishings and jewelry, Silverman noted all things personalized have been overwhelmingly popular in 2020. Gift baskets, care packages, and pet accessories have been some of the hottest categories.
Tzilka “Bella” Scheiner and her husband Moshe Scheiner left their corporate jobs in 2019 to create UnboxMe. They sell personalized gift boxes on third-party sites including Etsy and Amazon, and plan to launch their own website in March 2021. For 2020, the company is closing in at $1.6 million in revenue across all of their sales channels.
“Working with Etsy has been an incredible experience. They provide amazing support for makers, and simple and easy to use platform and responsive customer service. They are constantly sending us guides and tips on how to improve our shop, forecasts on buying trends, and always adding new features,” said Bella Scheiner.
‘Etsy’s our favorite platform besides our own website’
Relethford echoed the same sentiment about selling on Etsy, citing not only ease but an alignment of values.
“Etsy’s our favorite platform besides our own website. The fees are substantially lower than other platforms. They target and convey some of the same values we have as a brand — we are committed to making only socially conscious products — those that are handmade, organic, fair trade certified, or locally sourced. The customer base is friendly, genuine, and lacks the scammers frequently encountered on other channels although there's still a few bad apples every now and then,” he said.
Etsy has a three-pronged fee structure: there’s a $0.20 listing fee (listings are active for four months, or until they sell). There’s also a 5% transaction fee and 3% + $0.25 payment processing fee for every item purchased. And earlier this year, the company added a 15% offsite ads fee, which only charges sellers if they make a sale through offsite ads.
While there’s been some disgruntlement among sellers especially for the hefty 15% offsite ad commission, Etsy has become a sticky platform among creators, who find it a more positive place to do business than most pockets of the internet.
For creators like Pompey, she’s just thrilled to have gained significant traction with her nascent business, which only exists on Etsy and wouldn’t have existed without COVID-19.
“I beg to differ with a lot of people...2020 was one of the best years I’ve ever had because it launched me into a very great career, one that I could do at home and still be with my children. I always had a desire to create and never really did anything with it,” she said. “Now I see the fruit from it and it’s amazing. 2020 was actually a great year for me.”
Melody Hahm is Yahoo Finance’s West Coast correspondent, covering entrepreneurship, technology and culture. Follow her on Twitter @melodyhahm.
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