Etsy, an independent online marketplace for handmade products and vintage goods, is getting its fair share of dog food.
Most everything in the company’s sprawling offices in the Dumbo neighborhood of Brooklyn is from sellers on Etsy.com, from the long panels of gingham curtains covering the windows to the mismatched desks and work tables. An elaborate chandelier and a pair of six-foot-long wooden eyeglasses rest in the middle of one room; a rowboat is perched in the opposite corner.
Since it was founded in 2005 as a way for hobbyists and crafty types to sell their goods, Etsy has blossomed into a thriving e-commerce site and one of New York’s hottest start-ups. The company says it expects to bring in $30 million to $50 million in revenue this year and has been profitable for a year. It has seven million registered users, nearly twice what it had a year ago.
Robert Kalin, the co-founder and chief executive of Etsy, said the site was catching on because many people now want their buying habits to reflect their values, as indicated by the surging interest in farmers’ markets and local clothing designers.
“It’s not just ‘you are what you eat’ anymore,” he said. “You are what you buy, and these things define you.”
Mr. Kalin, 30, and his partners Chris Maguire and Haim Schoppik started Etsy in Mr. Kalin’s Brooklyn apartment after he was unable to find a good place online to sell his fully functional “inside-out computers,” which are encased in oak and covered with a transparent orange lid so the machine’s guts are visible.
Even now, Mr. Kalin is one of the site’s most prolific patrons, regularly snapping up items like custom three-piece suits, intricately woven wall tapestries and ceramic sculptures of doves.
Etsy says it is on track to handle close to $400 million in transactions this year, more than double last year’s figure. That pales in comparison to eBay, still the king of person-to-person online sales. Analysts say eBay could process as much as $15 billion in sales this year, excluding cars.
But eBay, which came to prominence in the dot-com boom, has gone from resembling an overflowing garage sale to being something closer to Wal-Mart in the eyes of many shoppers. It has struggled to reinvigorate its marketplace and alienated many of the smaller sellers that were once its lifeblood.
Comparing Etsy and eBay is like looking at “a toddler and a senior citizen, in terms of scale and scope of the business,” said Colin Gillis, an analyst with BGC Partners who keeps a close eye on eBay. But he said eBay’s troubles could offer cautionary lessons for Etsy as it grows.
“Be careful with sprawl,” Mr. Gillis advised. “Ultimately, eBay has come back to the conclusion that our ultimate goal is to connect buyers and sellers. EBay has to return to its roots of making itself a useful marketplace.”
If Etsy continues to charm younger, hipper and tech-savvier online shoppers, Mr. Gillis said, it could carve out a healthy slice of market share.
Kathy Chui, a spokeswoman for eBay, said that the company still had a healthy marketplace with about 93 million buyers and more than 200 million sale listings. In addition, she said, eBay “continues to lead and innovate in areas like mobile and on our core site with engaging shopping experiences like fashion.”
Mr. Kalin says his company’s focus on community and independent sellers will help it avoid eBay’s missteps. The troubles at eBay, he said, were caused by more than just bad business decisions. “It is a symptom of our times,” he said. “They looked to maximize profitability over community.”
Mr. Kalin points to the growing abundance of polished, high-end items from professional designers, furniture makers, confectioners and jewelry makers who are able to make a living by selling their wares through Etsy.
“You will find things on Etsy that you won’t anywhere else, things that are entirely unique,” he said.
Etsy is working to ensure that as the site gets bigger, it still feels more like a treasure trove of goodies than a chaotic sidewalk sale. The company sends out daily “Etsy Finds” e-mails that are usually put together by a staff member or a popular merchant. These display a handful of items arranged around a central theme or color scheme. A recent edition featured a pair of English riding boots, circular chalkboards, hand-stamped napkins, a chunky knitted cowl and a pair of midcentury, bright red mesh chairs.
The site is meant to resemble a funky boutique. Merchants can design the virtual storefronts of their shops, and many feature stylized photos and witty descriptions of their offerings.
The folksy appeal of Etsy’s site creates a kind of intimacy between buyers and sellers, said Rachel Botsman, co-author of the book “What’s Mine Is Yours: The Rise of Collaborative Consumption.” And shoppers can feel good about their purchases because the experience is similar to that of supporting an independent crafter or local artist at a flea market.
“Some people are more interested in buying an item or a good with a story behind it,” Ms. Botsman said. “There’s a backlash against anonymous mass-produced goods, and eBay feels as though it’s been taken over by mass-produced goods.”
Etsy’s virtual shops are brimming with nearly eight million items from more than 400,000 sellers. It charges sellers a small fee to list items, as well as a processing fee for transactions. Sellers can pay to promote goods in prominent areas of on the site, like the “Showcase” page.
Many who make a living or supplement their income by selling goods online say they like the tight-knit community feel of Etsy, which offers online forums and real-life gatherings for members.
“The vibe is like sitting in a room with crafters, drinking tea and laughing,” said Lori Hammond, a 49-year-old retired bakery manager living in Portland, Me.
Claire Ferrante, 28, who lives and works in Boston as a public relations manager for a software company by day and peddles her thrift-store finds by night, has been selling items on eBay for several years. She joined Etsy last year and said she preferred the younger site, which is devoid of the creaky technology and impersonal feel that plagues eBay.
“The process is so much easier,” she said. “You can pick an avatar, make your own masthead. The listings look better, and the browsing experience is better.”
“I don’t sell much of anything on eBay anymore,” she added.
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