Web 2.0 Case Study: Etsy

Web 2.0 represents an evolved version of the internet, which creates a much more dynamic approach to surfing the web. Instead of having web pages with little interaction available to the consumer, companies and sites that have adopted Web 2.0 allow for much more interaction, participation, feedback and information sharing. A few popular examples of this are Facebook, or Twitter, where the user can “like” pages, post comments and pictures and share things they find interesting. This isn’t limited to social media, for it can also be catered to all sorts of content ranging from customer service networks such as Yelp!, to blogs such as this one, and wiki pages. The graphic below is a visual representation of the variety of companies and services that can be categorized as Web 2.0 companies.


Popular Web 2.0 Examples

For this case study, I chose to look at Etsy, an e-commerce website which creates a platform for users to make, buy and sell handmade or vintage items such as jewelry, artwork and housewares. Etsy is primarily used on laptops and computers, but also has apps for mobile users which gives access to all the same services and benefits.


Etsy logo

Etsy utilizes highly personalized one to one marketing strategies to sell items, creating a connection between the consumer and the company. Upon logging into one’s account, Etsy displays a welcome message at the top of the screen,

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Account Login, etsy.com

Etsy keeps track of items the user has favorited and/or bought, and uses this information to suggest other items or sellers. In addition, Etsy allows the shopper to create lists of items that they are interested in, almost like  a playlist one would find within a music library. These lists are easy to access, and are saved within one’s account so they can be reached in the future.

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Item Lists

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Favorited Items

These features help to create unique offerings to each individual consumer, and allow them a degree of control over their shopping experience. In terms of personalization, Etsy offers even more within specific products themselves. For jewelry, customers can select the different material, length or color for an item. For other items, the manufacturer can personalize the product with engravings, embroidery or initials. This Tune Squad jersey for example, which is already a unique item within itself, can be customized further with sizing, player name and player number from the popular movie Space Jam.

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In terms of Wikinomics, Etsy is especially effective through utilizing the principle of acting globally. The website itself serves as a standardized platform, where artisans from all over the world are able to make, buy and sell products. This provides the consumers with access to truly unique items, created within different cultures and practices. They also employ a diverse workforce, with offices and employees all over the world. This approach is valuable because it allows Etsy to be given insight into markets, audiences and technologies from all over the world, rather than the limited scope that would be provided just from the United States. Because of this, Etsy can be seen as a sophisticated company that is open to new ideas and cultures, which will help to bolster their identity and company image.

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Etsy even offers users the ability to change the currency to the corresponding county, which highly emphasizes the global reach of the site, to cater to all different types of consumers and sellers.

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Courtesy of Etsyology.net

Courtesy of Etsyology.net

However, Etsy also can be seen as a peer network, where most of the activity is carried out by individual consumers and sellers creating and maintaining their own profiles, rather than having a hierarchy of superiors control the content and activity. The sellers are able to control their pages and customize them to what works with their products or offerings, and set up the process for purchasing and transactions. There is also informal communication through forums and blogs, which facilitates communication between the consumer and the seller and fosters a sense of community, and users can use a search tool provided on the site to find fellow “etsyins” in their area. Again, this helps to emphasize the close knit nature of the company’s mission- to sell hand crafted and unique items that haven’t been through massive scale manufacturing processes.

Finally, Etsy uses the brokerage business model to carry out day to day activities, specifically the virtual marketplace model. Since Etsy is a site for both artisans selling their goods, and consumers looking to buy, it would be considered the broker facilitating consumer to consumer transactions. Etsy makes it very easy to set up an “Etsy shop”. Information found on the website indicates that there is no initial fee to set up a shop, or join the community. Etsy charges sellers $0.20 cents to list an item on the site, and when the sale is made, Etsy collects a 3.5% transaction fee on the sale price of the item (Etsy, 2014) . The fees are accrued, and sent in a statement at the end of the month via email.  Other than that, Etsy has very little restrictions on what can be sold, how often, etc.

Currently, the Etsy site hosts over 24,000,000 listings covering 3,874 categories ranging from jewelry (the most popular, with 4,473,999 listings) to paper goods (around 904,106 listings) (Etsy Sales Statistics, 2014). With information from Etsyology.net, a site that analyzes Etsy metrics and transactions, it can be estimated that Etsy has brought in around $500 million dollars  since their inception in 2005.


Etsy sales by price, etsyology.net

With auction sites such as eBay as main competitors, Etsy has managed to maintain dominance in the area of handmade goods, with eBay’s products focusing on more hobby related activities rather than already produced items. In his breakdown of Etsy economics, Steven Carpenter has tracked increasing average sales prices (from $12.25 to $18.16) and the exponential growth of new listings, which helps to attract loyal customers (Carpenter, 2010) all achieved with a staff of about 20 employees.

Thus far, this model has been extremely successful for Etsy, as a majority of the action on the site is carried out by individual sellers. Etsy has to spend little on marketing and advertising, since this is done primarily through the sellers, and once a consumer purchases a product, they are likely to become loyal customers. Etsy is also attractive to sellers because they charge only a small percent for use of their services, as opposed to some sites who require monthly or yearly fees. The control rests in the hands of the one selling the goods, which is appealing to many small businesses or artisans. The only suggestion I would have would be to increase marketing efforts in the beginning of the calendar year to compensate for the influx of purchases around the holidays, since the site is very popular for purchasing gifts.


Carpenter, Steven. “TC Teardown: Etsy, It’s Crafty.” TechCrunch. N.p., 11 Sept. 2010. Web. 30 Jan. 2014.

“Overview.” Etsy Sales Statistics. N.p., n.d. Web. 30 Jan. 2014.

“Turn Your Passion Into a Business.” Etsy. N.p., n.d. Web. 30 Jan. 2014.


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