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This article mainly explains "how to understand Etsy". The content of the explanation is simple and clear, and it is easy to learn and understand. Please follow the editor's train of thought to study and learn "how to understand Etsy".

What did Etsy do?

Founded in 2005, Etsy is an online bazaar specializing in handicrafts, antiques and unique industrial products. The soon-to-be-listed startup sends a very important message to startups and marketers:

You can't expect to expand your business successfully through payment channels.

To prove this conclusion, Etsy and her S1 table provide an easy-to-understand chart.

The chart shows that most of Etsy's views come from organic marketing channels and have maintained this trend for four years, with paid ads accounting for only 2-7 per cent of visits.

Many people think that when startups raise money, they usually increase advertising investment to get more users, but successful startups can often achieve exponential growth through organic channels. I usually define the main drawbacks of payment channels as:

You are trying to achieve nonlinear exponential growth through linear channels.

Payment channels are simple and fast marketing leverage because they are very linear (more spending = more eyeballs). But it is only effective in a short period of time and does not create sustainable growth. In addition, everyone is now using paid marketing so that most of the money we spend on getting users is taken advantage of by competitors.

How does Etsy do it?

So how does Etsy get 87-91% of traffic through organic channels?

While I believe there are many reasons for this, I think there is one strategy that is most frequently used: making sellers independent entrepreneurs.

Let the seller become an independent entrepreneur

In an interview with PandoDaily in 2013, Etsy's CEO Chad Dickerson said he attributed the growth to Etsy users and sellers promoting their stores on social networks.

Etsy's CEO is not joking. If you search for the keyword # etsy on Twitter, you will see a lot of related entries. Pinterest and Instagram, the photo social platforms, are even more effective. This is how Etsy achieves its marketing goal by making use of existing platforms.

In a study conducted by Nelson, 92% of consumers said their buying behavior was most affected by social referrals. This reflects why Etsy can grow so much through social media. Users obtained through social referrals have higher lifetime value than those obtained through paid channels ("customer lifetime value" refers to the total revenue that each buyer is likely to bring to the business in the future).

Another thing Etsy did right is to enable people to turn their hobbies into a career. Etsy has built a virtuous circle that gives priority to helping sellers through a series of measures: Etsy's blog seller's Handbook, internal management tools that sellers use to process orders and contact buyers, deep integration with all kinds of social media, and support for a large number of third-party apps that can help sellers manage stores and increase revenue.

Give a few examples of third-party applications:

1. Craftmonkey: form a promotional email to the seller's MailChimp list by dragging pictures and text on Etsy.

2. PICT: embed links and product information into pictures with hotspots, so that when users see pictures on other websites, they will be directed to the seller's store.

3. Around.io: enables sellers to send promotional messages regularly on Facebook, Twitter, Pinterest and Google+.

Etsy has built a strong product on the supply side of the market, while the supply side has promoted demand-side development through social media. Etsy relies on the enthusiasm of sellers to build a very powerful organic channel.

The power of this organic channel is also demonstrated by Etsy's repurchase rate. Most of Etsy's sales come from repeat purchases (see chart below). In 2014, repeat purchases accounted for an astonishing 78% of total sales.

Higher seller income = > higher seller retention rate = > more sellers promote on social media = > higher Etsy product visibility = > higher merchandise sales = > IPO.

There are currently 1.4 million active sellers on the Etsy platform, which is indeed an admirable number.

Thank you for your reading, the above is the content of "how to understand Etsy", after the study of this article, I believe you have a deeper understanding of how to understand Etsy, and the specific use needs to be verified in practice. Here is, the editor will push for you more related knowledge points of the article, welcome to follow!

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