Crafty new business models: A look at Etsy.com
Corporate social responsibility is becoming increasingly popular as organizations and consumers are gradually becoming more conscious of how they are ruining the environment. By being socially responsible, firms have the opportunity to express their environmental and societal concerns and bring on social change by implementing effective business strategies. In doing so, organizations and consumers are fighting on the same side toward joint participation and involvement, giving rise to mutually beneficial relationships in the context of social responsibility.
Although going green requires an entire change of mentality and an alternative way of living, there are consumers who encourage an eco-friendly way of life and organizations that promote environmentally friendly business models.
The socially responsible role of Etsy.com
One of the most successful online businesses that feature socially responsible practices is Etsy.com. Headquartered in Brooklyn, NY, Etsy.com integrates an environmentally friendly business model in a variety of handmade items and craft supplies, which are sold at its online marketplace. Consumers can find anything from art, clothing, jewelry and toys to beauty products, all handmade by ordinary people across the United States and another 84 different countries and offered for sale at affordable prices. Besides supporting an eco-friendly way of living, Etsy.com offers a unique opportunity for new artists to expose and sell their innovative creations on the website.
The environmentally friendly attitude of Etsy.com is not only reflected in the products it sells. Etsy.com is basically a handmade company, with chairs, offices and floors that are made of natural materials.
Facts about the Etsy.com business model
In June 2010, 1.2 million items worth $22.1 million were sold through Etsy.com and nearly 2 million new items were listed. Moreover, nearly 233,000 new members joined its community and more than 687 million page views were registered on the website as a result of effective SEO and high ranking in the major search engines.
Although the statistics are lower than May 2010 by 3.5% on average, the company has growth potential: the $22.1 million are increased by 71% and the 1.2 items sold are increased by 54%, compared to 2009's totals.
Analyzing the Etsy.com business model
Being the successful product of brainstorming, Etsy.com was launched in 2005 by Rob Kalin, Chris Maguire and Haim Schoppik. Etsy's business model is often compared to that of eBay, although, unlike the auction market, Etsy's items are sold through a global marketplace. Anyone who is interested in listing an item on Etsy.com pays a 20 cent listing fee per item and Etsy.com collects 3.5% commission on each item sold.
Etsy.com focuses on customization and diversification by targeting specific groups and creating a solid business network. Consumers love to be able to find exactly what they are looking for on the Internet. If this product is eco-friendly, offered at a low cost and can be easily acquired through a user-friendly global marketplace, there is more than one reason that explains why consumer demand constantly increases as a result of customization.
Taking into consideration consumer demands, Etsy.com builds its brand image on handmade products that are globally recognizable. This happens because consumers have the tendency to relate brands with products and any given brand image mirrors a particular relationship that consumers have with a particular firm. This facilitates brand building and differentiation strategies, instilling trust in consumers. Etsy.com capitalizes on this trust and expands its online market by enabling more transactions. This strategy attracts more suppliers who join the network and offer their products, thus increasing demand and improving the product line. Eventually, consumer demand is improved and brand recognition is enhanced.
Etsy.com is also seeking the possibility of expanding offline to business advice services and financing to local crafters who would be interested in joining the community.
Conclusion
Joining the Etsy.com community is a great opportunity for aspiring entrepreneurs to develop a profitable business. The successful business model promotes community involvement and guarantees an expanding business network. Moreover, Etsy.com addresses the needs of consumers through the great variety of handmade products offered on its online, global marketplace. By matching growth expectations to consumer lifestyle choices, Etsy.com increases consumer demand and enhances customer satisfaction and retention.
