How many Twitter threads have you seen from “VC Influencers” telling founders to build ideas around “solving a problem” in the market? It’s why we’ve seen several grocery delivery apps and electric scooter startups get funded, while everyday problems found by entrepreneurs continue to be overlooked and underfunded. I’m joking! I know how people feel about their electric scooters.
As a founder, I want to remind you that you’re in a very unique industry, with endless opportunities to innovate and develop solutions for everyday problems. We need your ideas! We need your solutions. Something I strong believe is that; technological innovation is about striving to improve existing products or services. Every market can benefit from an introduction to new updates and ideas.
And Etsy has a GIANT PROBLEM, begging for multiple solutions!
Let’s get into it!
I don’t know if you’ve been paying attention or not, to the ongoing issues with Etsy. For those unfamiliar with Etsy: Etsy is the global marketplace for unique and creative goods. The platform connects sellers with millions of buyers looking for unique handcrafted pieces to vintage treasures.
Definition of Marketplace: A marketplace is a platform where customers find sellers, connects buyers and sellers to various products or services.
Launched in 2005, in a Brooklyn apartment by Rob Kalin, Chris Maguire, and Haim Schoppik, Etsy was created as an online marketplace for independent sellers and small businesses. The platform has grown to a billion-dollar enterprise.
A billion dollars of disruption
Profitability is every shareholders and CEO’s dream, but at what cost to the end user, the independent seller’s and small businesses? According to Etsy’s website, On April 11, 2022, the platform raised its fees. The transaction fee increased from 5% to 6.5%. No big deal right?
The real reason why the fees matter
While an increase from 5% to 6.5% may not seem significant to you at first glance, let’s take a look at what that looks like from the seller’s perspective. Etsy can take up to 30 percent from one transaction with additional fees including the listing fee to post products on the platform, a payment processing fee for processing payments, and a fee for offsite ads that totals around 15 percent.
Speaking of the Ads
Etsy’s website indicates that sellers are automatically enrolled in what is called “Offsite Ads”. Sellers can opt out of the programs, others have no choice and are required to participate. If a seller’s shop made $10,000 USD or more total sales in any consecutive 365 day period after February 20, 2019, you will be required to participate in Offsite Ads for the lifetime of your shop even if you fall below that threshold at a later period; and (2) sellers who have not exceeded the $10,000 USD threshold in any consecutive 365 day period after February 20, 2019, or as otherwise required by law, may opt-out of the program. The consecutive 365 day period will be extended to 366 days during a leap year. Dates are determined Eastern Standard Time.
How do Offsite Ads work?
Etsy purchases offsite advertising from a network of participating partners, such as social networks and search engines. If such advertising includes your listing, a buyer clicks on it, and then places any orders from your shop within 30 days of that click, you will be charged an advertising fee on these orders (which we’ll refer to collectively as “Attributed Orders” and individually as an “Attributed Order”).
Frustrated sellers claimed that Etsy increased prices to help better support sellers, but have stated that customer service has actually gotten worse before the increase. Kristi Cassidy, an active seller on Etsy since 2007, decided that the fee increase was the last straw, and led a week-long strike with 5,000+ sellers in 2022. Etsy shops organized a shop-wide closure, which means sellers went into “vacation mode”, suspending sales for a little over a week in protest of the changes on the platform.
“The strike is just action number one,” she says. “What we want to really do for the future is form a solidarity support movement- peer support, artisans supporting each other”.
Other issues sellers have experienced based on their feedback from the platform
Product replication and theft
Many sellers stated that overseas resellers were duplicating handmade, and other goods from shops and reselling for less money.
Free shipping guarantee
A free shipping guarantee automatically applies free shipping for US buyers when they purchase the following from your shop:
· Any individual item $35 USD and up.
· Orders with a total cost of $35 USD and up.
The problem according to sellers? Customers would need to purchase a single item or purchase products totaling $35.00 to use free shipping. Any order below the price would mean that the seller would have to factor in shipping by adding the cost for shipping the products.
Listing fee
Sellers are also charged a listing fee. A listing fee of $0.20 USD is charged for each item that the seller list for sale on Etsy.com or Etsy's mobile apps. Etsy automatically renews listing fees at the end of the four-month listing period, unless the seller chooses to not use automatic renewals for a particular listing or for your shop
Changes to search engines
Several sellers mentioned the changes in search optimization which requires sellers to use key words to help push their products on the platform. That means sellers much change their shop product titles and tags often which is time consuming. If you are a seller with hundreds of product listings, constantly making changes can take up more of your time than working on other aspects of the business.
There’s a number of issues here but more importantly, many sellers are looking for alternative platforms to Etsy.
You want to build a solution? Perhaps you’ve already launched your marketplace and need customers? Here’s your chance to provide an alternative solution for Etsy customers.
Conducting Research
Conducting research assists with helping you understand the industry, customer behavior, problems and trends. The information found in your research will assist in developing solutions to problems, or create an outreach strategy to promote and market your existing marketplace.
First, I would interview Etsy sellers and shoppers to learn their experiences with the platform, and then create enhanced solutions to the problems.
Where do I start?
A quick outline to help you develop a strategy of execution
1. Outline your goals. What are you looking for? Who are you looking to serve, what is your overall goal? What product and or solution will you build?
2. Identify current trends. Look for data that already exists. Instead of creating a whole new data set, research data sets that already exists to save you time and resources.
3. Conduct Surveys. Surveys are the most cost-effective option for conducting research. Of course this requires having an audience willing to complete the surveys.
4. Publish your own original research based on the data you’ve gathered. You can delve into your personal metrics, experiment and measure your results.
5. Read publications regarding the industry, including recent articles.
6. Take a break when necessary to avoid “information overload”. Sometimes the information can be so overwhelming you’ll start to overthink your strategy, it can lead to confusion, and stagnation. Instead of using the information to move forward, you’ll procrastinate and do nothing with it.
7. Be Patient. You do not have to “move fast” to be “first in the market”. There’s power in building strategically and slowly. The market will catch up.
8. Organize the research in a way that makes sense to you and your concept. Start with the end user’s goal, in this case the Etsy seller, then work backwards to build your product as a solution.
Develop a simple and effective strategy to follow for conducting research. Start simple. Begin by reading recent articles about Etsy, its customers, the market size and opportunities in the industry to build an alternative solution for sellers.
Remember, any information and or data found can be used to understand who is buying the products, how well companies are able to service customers with their products and services? What problems and issues customers may be experiencing with the products? Why customers make the choices to purchase the products and how they react to them.
Technological innovation is about striving to improve existing products or services. Every market can benefit from an introduction to new updates and ideas. Don’t be afraid to entire the market of “giants”. As you can see every industry leaves open opportunities in the market for people like you to compete!
Just in case you needed help with a go-to-marketing strategy for launching your marketplace, or developing one I am taking clients!
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Shavaughn
Founder, BYSB STUDIO
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