Craft and vintage marketplace Etsy has reported its results for the second quarter of this year and steps taken to revinvigorte the business do seem to be working.
The highlights include:
- GMS (gross merchandise sales) grew 20.4% year-over-year
- Revenue grew 30% year-over-year with a margin of 21%
- Active buyers increased 17% and active sellers grew 8%
Etsy CEO Josh Silverman strikes an optimistic tone in the call to investor (you can read the full transcript here) and that’s justifiable. Since he took the helm he has made significant changes including a number of redundancies and changes to marketing and the tools on offer to sellers. There has also been plenty of experimentation with improving search and the homepage lay out.
It’s been a great first six months of 2018 and we’re very proud of our team for delivering on our commitments and staying focused on our four strategic initiatives. We’ve made steady and significant progress improving our conversion rates and making our extraordinary products easier to find and buy. But we’re still in the early innings with much more opportunity in both of these areas.
– Josh Silverman, CEO, Etsy
Of course, the second quarter didn’t include the period when Etsy changed how it charges fees. The new fees were announced in June and implemented on 16th July and saw transaction fees increase from 3.5% to 5% and they are also now payable on shipping costs too. The third quarter results may indicate if this has had a dampening impact on the very encouraging growth in these results.
Needless to say, the fee changes and increases have not been popular with Etsy sellers and have been widely criticised. But, also considering that insertion fees haven’t been increased, Etsy remains a comparatively cheap marketplace to sell on. Silverman is at pains to point out in the call that the fee changes will be leading to greater investment, specifically on marketing.
