Etsy is refocusing its aspirations and energies — much to the annoyance of some of its sellers.
CEO Josh Silverman said the decision is a pivot toward the areas that are showing the most growth for the handmade marketplace, particularly on its core eCommerce site.
However, the news came as a jolt to merchants like jewelry maker Natalie Jacob, who told Bloomberg she became a major fan of the Etsy Wholesale service until it abruptly stopped communicating with merchants. (Etsy Wholesale has not been shutdown formally, but it seems to have been largely abandoned, according to reports.)
A “tacit admission” followed that the eCommerce site will likely be curtailing — or at least scaling back — its plans to push into brick-and-mortar retail. The pullback, reports noted, runs some risk of alienating or irritating Etsy sellers who had anticipated additional channels by which to reach consumers.
“It’s the company picking its battles,” said Tom Forte, an analyst with D.A. Davidson & Co.
Services like Etsy Wholesale — which got Etsy retailers in spaces like Macy’s — were a way for craftspeople to find new buyers, but it was unlikely to have been much of a revenue driver for Etsy, according to Forte. The goal now, he noted, will likely be finding ways to better align services like Etsy Wholesale to its core eCommerce product.
It’s a serious change of direction for Etsy.
“People see us as an online handmade marketplace, but we really see ourselves as reinventing the whole retail supply chain,” then-CEO Chad Dickerson said at a tech conference in 2013. “We’re excited about the long-term potential this program has to create meaningful growth opportunities for sellers and for Etsy.”
Five years later, Dickerson is out, Silverman is in and Etsy is attempting to recover from a long run of sluggish sales growth, falling stock prices and angry shareholders who are hoping to see healthier revenues soon. Etsy has become a leaner and meaner organization — 8 percent of its workforce has been let go, and side projects like a craft tutorial site called Etsy Studio have been shuttered.
The changes, however, have boosted revenue, which has grown for the last three quarters, including its first billion-dollar quarter.
Silverman has also seen Etsy’s stock price increase 160 percent since he took over as CEO: Share price is approaching $27, an all-time high.
In response, a spokesperson for Etsy said, “Wholesale sellers rely on Etsy to bring them buyers through visibility on our platform. Our goal is to continue to enhance that discoverability over the course of 2018 and beyond. Driving the wholesale buyer to seller connection aligns with our business strategy of focusing on the value of the core Etsy.com marketplace. We’re currently evaluating the best way to do that and we will update our wholesale community when we have more information.”