Before we get into the specifics of Etsy, let’s understand competitor analysis. Competitor analysis is a strategic research method companies use to identify, evaluate, and understand their current and potential competitors within the market. It’s an essential business strategy component and instrumental in understanding the industry landscape.
The process usually involves the following steps:
- Identifying Key Competitors: The first step is to identify who your competitors are. These may be direct competitors (those who offer the same or similar products or services as you) or indirect competitors (those who provide different products or services but compete for the same consumer dollar).
- Analyzing Competitors’ Strategies and Objectives: Once competitors are identified, the next step is to understand their business strategies and objectives. This may involve analyzing their marketing materials, financial performance, customer reviews, or any public information available about the company.
- Assessing Competitors’ Strengths and Weaknesses: This step involves evaluating the identified competitors’ strengths and weaknesses. Strengths include unique products or services, strong brand recognition, and superior customer service. Weaknesses include poor product quality, weak customer service, or high prices.
- Understanding Competitors’ Products/Services: Understanding what your competitors offer and how your products or services compare is important. This could involve looking at features, quality, pricing, customer service, and marketing strategies.
- Observing Competitors’ Reaction Patterns: Some companies react more aggressively than others when faced with competition. Understanding these patterns lets you predict how these companies might respond to your business strategies.
- Drawing Conclusions and Formulating Strategy: The final step is to take all the information gathered from the analysis, draw meaningful conclusions, and use those to formulate or adjust your business strategies.
The main goal of a competitor analysis is to understand the competitive landscape, spot opportunities, and threats, and position your company most advantageously. It helps to inform strategic decisions, from product development to marketing and sales efforts. Now let’s do a competitor analysis of Etsy.
How does Etsy make money | Business Model & Marketing Strategy
Here is the competitor analysis of Etsy
Amazon Handmade
- Marketplace Visibility: Amazon is one of the world’s most visited websites, with a vast, global customer base. Amazon Handmade, as a part of Amazon, has the potential to reach this audience, which can be an advantage for sellers. While not as large as Amazon overall, Etsy has built a strong brand focused explicitly on unique, handmade, and vintage goods. As a result, Etsy often attracts a more targeted customer base that is actively seeking out these types of items.
- Fee Structure: Both platforms charge fees for selling items, but the structures differ. Etsy charges a listing fee, a transaction fee, and a payment processing fee. As of 2023, Etsy charges a listing fee of 0.20 USD for each item sellers list for sale on Etsy.com or Etsy’s mobile apps. Amazon Handmade waives the monthly fee for artisans but does charge a referral fee on the sale price of each item. The difference in fees could make one platform more appealing than the other for certain sellers.
- Seller Support and Resources: Both platforms offer support and resources for sellers, but the focus is different. Amazon provides resources centered around using its platform effectively and maximizing sales through the Amazon ecosystem. Etsy offers resources that often focus on the creative process, running a small business, and building a brand, reflecting its community-oriented brand image.
- Product Categories: While both platforms allow the sale of handmade goods, Etsy also allows vintage items (at least 20 years old) and craft supplies, including commercial and handmade items. This broader range can attract different sellers and buyers compared to Amazon Handmade.
- Community Feel: Etsy is known for its community-driven approach, providing a platform where creators and buyers can connect over shared interests. Being a part of the larger Amazon marketplace, Amazon Handmade doesn’t have as much of a community feel, which can be a differentiating factor for certain buyers and sellers.
- Shipping: Amazon, with its established logistics network, can offer advantages in shipping, especially for Amazon Prime members who are accustomed to fast, free shipping. Etsy sellers handle their own shipping, which can result in more variability in shipping costs and times.
eBay
- Product Focus: Etsy focuses on handmade items, vintage goods, and craft supplies. On the other hand, eBay is a broader marketplace, selling everything from electronics to clothing to cars. While eBay does have a handmade category, it’s not the site’s primary focus. eBay is often seen more as an auction site where individuals and businesses sell used and new goods, whereas Etsy is known for unique, often hand-crafted products.
- Brand Perception: Etsy has cultivated a brand image of a craft-focused, community-oriented platform, which can appeal to buyers looking for unique, artisanal goods. eBay is perceived more as a vast online auction and e-commerce website where you can find almost anything.
- Pricing and Auctions: eBay is known for its auction-style listings, where buyers bid on items. While it also allows for fixed-price listings, the bidding aspect is a unique feature that sets eBay apart. Etsy, on the other hand, only offers fixed-price listings.
- Fees: Both platforms have various fees for sellers, including listing fees and transaction fees. The specifics of these fees can differ, potentially making one platform more appealing than the other for certain sellers. eBay charges two main types of selling fees: an insertion fee when you create a listing and a final value fee when your item sells.
- Community: Etsy has a strong sense of community, with buyers and sellers connecting over shared interests. eBay’s size and broad product range don’t lend themselves as well to a sense of community.
- Seller Tools: eBay offers more advanced tools for high-volume sellers, like managing a large inventory or automating listings. Etsy’s tools are geared more toward small businesses and individual artisans.
Bonanza
- Product Focus: Etsy specializes in handmade, vintage, and craft supplies. On the other hand, Bonanza is a generalist marketplace that offers a wide range of items, including fashion, home decor, collectibles, and more. It’s less focused on handmade or vintage items than Etsy.
- Brand Perception: Etsy has a strong brand associated with unique, often hand-crafted items and a community-oriented feel. Bonanza is often perceived as a more broad-based e-commerce platform and might have a different level of brand recognition, especially among buyers seeking unique, artisanal goods.
- Marketplace Size and Reach: As of 2023, Etsy has a more extensive customer base than Bonanza. This could offer more visibility for sellers. However, Bonanza also allows sellers to advertise their listings on other sites, which could increase their reach.
- Fees: Both platforms charge fees, but their structures can differ. As of 2021, Etsy charges a listing fee, a transaction fee, and a payment processing fee. Bonanza doesn’t charge a listing fee, but it does have a selling fee based on the final offer value. The different fee structures can make one platform more appealing to certain sellers. Bonanza charges a $0.25 transaction fee on all sales made from a Bonanza booth for sellers who do not have an active membership subscription. In addition to the transaction fee, sales made on Bonanza are subject to a Final Value Fee.
- User Experience: Both platforms provide tools for managing listings and sales. However, the user interface and ease of use can vary, affecting sellers’ and buyers’ experiences on each platform.
