A Detailed SWOT Analysis of Etsy – A Universe of Special and Unique Items

Updated on: Nov 19, 2021
SWOT Analysis of Etsy-featured image-IIDE

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Last time, we evaluated the SWOT analysis of Amazon. This time, we will examine the SWOT Analysis of Etsy in more detail.

Etsy is a leading online marketplace of unique and creative goods, founded in 2005 in New York. They have seen more than a century of technological progress, and they think the future looks just as exciting. Why? Because their products have always satisfied a need in people’s lives, they will never stop making them.

Etsy has also competed successfully in its marketing efforts in the past few years. With the growing popularity of online shopping, marketing is undergoing constant changes. If you would like to learn more about the most up-to-date marketing techniques, consider joining our Free Masterclass on Digital Marketing Basics by the CEO and Founder of IIDE, Karan Shah.

In this blog, we’ll learn about the detailed SWOT Analysis of Etsy and decode its success but before that let’s know more about the company.

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About Etsy

Founded in 2005, Etsy is an American internet marketplace that specializes in handcrafted or vintage items as well as craft supplies. A variety of products can be found here, including jewelry, bags, clothing, home décor and furniture, toys, art, and craft supplies. It is modeled after the traditional open craft fairs where sellers have their storefronts where they list their wares for a fee.

Etsy Store- SWOT Analysis of Etsy | IIDE

In 2005, Robert Kalin, Chris Maguire and Haim Schoppik founded Etsy. They developed the first version of the website in less than two months and launched it that same year.

In Kalin’s view, he was seeking a unique brand that was built from the ground up. Etsy is translated as “what if” in French and Latin.” Kalin said he chose the name because he “wanted a nonsense word.” By doing this, potential customers would not have formed associations with the name, which would strengthen the brand.

Quick Stats about Etsy
Founder Robert Kalin with his friends Chris Maguire, Haim Schoppik, and Jared Tarbell.
Year Founded 2005
Origin Brooklyn, New York, U.S.
No. of Employees 1400
Company Type Public
Market Cap $30.53 Billion (2021)
Annual Revenue $1.725 Billion (2020)
Net Income/ Profit $0.098 Billion (2020)


Products at Etsy:

Etsy has been in this industry for more than a century and it has about 100 million items for sale for consumers to choose from. Some of them are :

  •  Art and Collectibles
  •  Craft Supplies
  •  Digital Artwork and Printable Items
  •  Home Goods
  •  Vintage Items 


Close Competitors of Etsy:

The top 5 competitors of Etsy are:

  • 1stdibs
  • Zalando
  • Amazon,
  • Flipkart 
  • eBay

Now that we understand the company’s core business, let’s delve into the SWOT Analysis of Etsy.


SWOT Analysis of Etsy

Infographic- SWOT Analysis of Esty | IIDE

SWOT analysis is a strategic planning framework that a firm can use to get a detailed analysis of the company’s situation. Using a SWOT framework can help Etsy realize its strengths, weaknesses, opportunities, and threats associated with its strategies.

Only through regular SWOT analysis and improving itself, Etsy Inc. maintains its dominance in its business sector. An Etsy SWOT analysis will prove to be very useful for other companies too.


1. Strengths of Etsy

Etsy Inc. has many strengths that will make it a leading player in its market.

  • A High Level of Consumer Satisfaction: A good reputation of Etsy lies in its ability to deliver the most unique products to its customers because they are a worldwide company, they can serve many different types of products. Both customers and dealers receive a unique and pleasant experience when they deal with them. As well, customers can leave a review, making them feel important. Overall, this leads to a very satisfied customer base.

Etsy Products - SWOT Analysis of Etsy | IIDE

  • Strong Cash Flow: Etsy’s free cash flow has been steady for years due to the large number of vintage and artsy items people purchase from them. As a result, the organization can keep profits and expenditures under control.
  • The Dealer Community is Strong: Etsy’s dealers have a strong working relationship with the company. They have built a relationship that is based on trust, loyalty, and excellent service. As a result, a mutually beneficial relationship can be built.  This creates a strong dealer base.
  • Reliable Suppliers: This website is filled with reliable suppliers. Etsy prides itself on giving the safest and secure economic experience. It is run by professionals who are trained and qualified. As part of the promotion and sale of their products, suppliers have to pay a 0.20$ entry fee. By doing this, the company becomes more credible and people begin to trust them.


2. Weaknesses of Etsy

An organization’s internal factors include its weaknesses. Several of these weaknesses can be identified through SWOT analysis.

  • Discrete Structure: Etsy’s organizational structure is quite rigid. It is therefore always difficult to adjust to a new company’s culture whenever they merge with another company. In turn, the loss of several valuable working hours makes the company’s operations less effective.
  • Higher Funds for the Technology Sector: All though Etsy spent enough money to develop its technological sites. The company is still quite behind on this matter, as many of its competitors are ahead of it. It puts a damper on the team’s morale, which is quite an inconvenience for the team.
  • Research and Development: Etsy Inc. spends more than that is average in this industry on research and development. Even so, it is not enough. It still spends less than many of its competitors. Because of this, it is losing ground in the competition.


3. Opportunities for Etsy

The opportunities in a business are external factors that can be tapped for profit and benefits. 

  • Low inflation rates: Inflation has been very low this year, and experts predict that it will remain that way for some time. It represents an excellent opportunity for the company to earn a significant profit. It will also ensure that the cost of inputs is low during that period.
  • New markets: As the government has agreed to lend a hand to economic development new markets are emerging. There are already 2.1 million sellers and 39.4 million buyers connected on Etsy. With the new markets, these numbers could rise even higher.
  • Due to globalization: As globalization increases, Etsy will not be restricted within its traditional bounds. This could turn into a full-blown opportunity to show the world exactly what Etsy is capable of. 


4. Threats for Etsy

As part of a swot analysis, threats are most important. An Etsy Inc. SWOT analysis will reveal the threats that have been holding the community back.

  • Unique Products are not always Available: It is well known that Etsy is known for offering the most eccentric and valuable products. In addition, these products are both rare and beautiful. It is therefore extremely difficult to find another copy of the product even after strong public demand. In the case of vintage collections, it is especially problematic since they are extremely difficult to find.
  • Inconsistent Exchange Rate: Exchange rates are subject to volatility. Due to Etsy’s international sales regulations, these fluctuations significantly impact them. In just a heartbeat, this can lead to heavy profits or losses for the company.
  • Competitive Environment: Several new companies have mushroomed in recent years. This increases the competition. Etsy’s revenue will suffer if competitors get ahead of this race.
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Etsy can be said to be strong due to steady growth in profits and global reach. As for its greatest weakness, that would be a stiff structure of an organization. Although it doesn’t look like much, it is a huge burden to carry. 

The E-commerce market is becoming increasingly competitive, which leaves companies to compete for customers by improving marketing efforts. With an evolving landscape where digital marketing is of utmost importance, being well versed in the realm is a requirement for every marketing enthusiast. If you also want to learn digital marketing, do check out top-notch courses provided by IIDE.

If you are interested in such detailed analyses of companies, try our IIDE Knowledge portal for more. Thank you for reading the blog, share your thoughts in the comments.







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Aditya Shastri

Lead Trainer & Head of Learning & Development at IIDE

Leads the Learning & Development segment at IIDE. He is a Content Marketing Expert and has trained 6000+ students and working professionals on various topics of Digital Marketing. He has been a guest speaker at prominent colleges in India including IIMs......[Read full bio]


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