Etsy, Inc.
Etsy, Inc., together with its subsidiaries, operates two-sided online marketplaces that connect buyers and sellers in the United States, the United Kingdom, and internationally. It operates through Etsy and Depop segments. The company operates Etsy marketplace that connects artisans with various consumers; and Depop, a fashion resale marketplace. It also provides marketplace activities, including transaction offsite advertising, payments processing, and listing fees, as well as from optional seller services, which include on-site advertising and shipping labels. The company was formerly known as Indieco, Inc changed its name to Etsy, Inc. in June 2006. Etsy, Inc. was founded in 2005 and is headquartered in Brooklyn, New York.
What does it do?
Etsy is an online marketplace where independent makers and vintage sellers list their products for buyers who want something more personal than what Amazon sells. Think handmade jewelry, custom wedding invitations, or a one-of-a-kind piece of furniture — things made by real people, not factories. It also owns Depop, a secondhand fashion app popular with younger shoppers who want to buy and sell used clothes. Etsy sits between a seller's kitchen table and millions of buyers worldwide.
Etsy matters right now because it represents one of the few e-commerce platforms not directly threatened by Amazon — its 'handmade and unique' positioning is genuinely hard to replicate at scale. Investors are watching whether Etsy can grow its active buyer base again after a post-pandemic hangover that saw shoppers pull back. With consumer spending under pressure and competition intensifying from Temu and Shein, the next 12 months will test whether Etsy's niche is a real moat or just a temporary advantage.
How does it make money?
Etsy makes money primarily by taking a cut of every sale on its platform — sellers pay a 6.5% transaction fee on each item sold, plus a small listing fee of $0.20 per item. It also charges sellers for optional add-ons like promoted listings and offsite ads, where Etsy advertises products on Google or Facebook and takes a fee if a sale results. In its most recent fiscal year, Etsy brought in $2.9 billion in revenue, up from $2.8 billion the prior year, and kept $200 million as net profit. Depop operates on a similar commission model but is much smaller and still growing.
Why do investors care?
The growth story at Etsy is about deepening its relationship with existing buyers rather than just finding new ones — getting people who already shop there to come back more often and spend more. Etsy has been investing in better search, personalization, and AI tools to match buyers with items they didn't know they wanted. For this to work, Etsy needs to reverse a trend of flat or declining active buyer numbers that emerged after the pandemic boom faded. If it can re-engage its massive base of over 90 million buyers while also scaling Depop, the combination could be a powerful long-term platform.
Deep Dive
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