While there are many e-commerce online marketplaces, few cater to sellers looking to sell handmade and one-of-a-kind products. Etsy is one of the most fascinating examples of creating a global craft company.
For 17 years, Etsy has been a platform for selling products such as sculptures and handwritten recipes. In general, it is an e-commerce website focused on selling handmade or vintage goods by individuals.
Reading: How to create a website similar to etsy
In this article we will find out how to create a website like Etsy. You will learn how this two-sided ecommerce online marketplace works and how it makes money. You’ll also learn how much it costs to build an Etsy-like platform and what core features it should have.
What is the Etsy online store and how does it work?
The Etsy project started in 2005. Today it is a huge online marketplace with over 5 million active sellers and over 60 million products. The site allows sellers to set up their own “shops” and sell directly.
What can buyers search for on Etsy’s site? Everything! Unique designer items, creative gifts, vintage items—customers will find it all here.
Source: Etsy.com
How it all began
The idea for launching the e-commerce website belongs to artist and photographer Rob Kalin. Kalin says the idea of developing online marketplace Etsy came to his mind when he realized there wasn’t a suitable website for selling handmade goods in the market.
The partners of Businessmen were his two friends Chris Maguire and Haim Schoppic. The originality of the idea and the presence of a free niche prompted the friends to set about implementing the project. None of them were web development experts, but they all loved creativity and wanted to make the world a better place.
Three months later a prototype of the platform, dubbed Etsy, was ready. Kalin said the online marketplace was given such a name because it sounds great and it’s convenient to build a brand with unique features around such an original word. Interestingly, “Etsy” comes from the Italian “еh, si”.
Gradually, the service began to significantly expand its target audience and attract sellers. In July 2007, the millionth sale was made on the Etsy handmade marketplace. And by November of the same year, more than 300,000 purchases worth over $4.3 million were made on the marketplace.
The high growth rate of the service’s audience soon attracted the attention of venture capital funds. For example, in January 2008, Etsy received a $27 million investment.
Today, Etsy is a hugely successful e-commerce company, and many are wondering: How do you create an online marketplace like Etsy? Interestingly, this sales platform has benefited from the COVID-19 pandemic. People are staying home and “Furniture has become the best-selling category during the pandemic,” Etsy CEO Josh Silverman told Mad Money on CNBC.
Key Etsy Facts
If you’re wondering how to build a website like Etsy, let’s take a quick look at the top Etsy facts.
- Founders: Rob Kalin, Jared Tarbell, Haim Schoppic and Chris Maguire
- Year of foundation: 2005
- Funding received: total $97.3 million in 9 rounds
- Number of users: over 80 million users
- Number of sellers: over 5 million active sellers
- Number of employees: 1400 employees
- Etsy’s competitors: eBay, ArtFire, Aftcra, Ruby Lane.
Business Model
Etsy’s business model is similar to that of other online marketplaces such as eBay and Amazon. It’s a two-way P2P marketplace for selling and buying precise, unique, and creative items.
What makes Etsy different from the other platforms? It’s the vertical approach to Etsy’s business model. In general, the marketplace focuses on selling handicrafts in very specific categories. Simply put, this marketplace is home to a whole universe of special, exceptional items. These can be unique handmade items or vintage treasures, for example.
Source: Etsy.com
For comparison, Amazon-like sites have a horizontal business model where almost everything is for sale .
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Etsys Payment Gateways
There are dozens of gateway providers. However, the Etsy marketplace cooperates with licensed providers such as:
- PayPal,
- Worldpay,
- Adyen,
- Stripe Connect .
Of course, PayPal is the best known and most popular payment solution. It had over 426 million users worldwide in 2021. So you can use PayPal to expand the audience for your own website.
Source: Statista.com
In addition, Etsy Marketplace users can use credit cards, debit cards, bank cards, Etsy Gift Cards, Pay Etsy credits, etc.
How can a platform like Etsy make money?
Now let’s discuss in detail how to monetize the marketplace similar to Etsy and how Etsy does it.
- Transaction Fees
Etsy charges sellers a transaction fee of 5 percent of the price of each successful sale through its platform.
- Subscription Fees
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Often, sellers on sites like Etsy can sign up for a package that offers several additional tools to increase sales. This can be advanced shop customization or access to discounts. For example, Etsy Marketplace charges a monthly fee of $10 for the Etsy Plus plan.
- Pattern Tool Fees
Pattern is a Etsy Marketplace website builder for its sellers. It allows merchants to build their online shops on domains that are independent of Etsy’s platform. The first thirty days of using Pattern are free. Thereafter, Etsy charges a monthly subscription fee of $15.
- Listing Fees
Etsy charges sellers a minimum of $0.20 for each item they list on the platform . Still, it’s a profitable revenue model for a marketplace like Etsy. Why? Because thousands of products are regularly listed there.
- Order Fees
Etsy also monetizes its marketplace through payment processing fees. The total fee per order varies depending on the seller’s bank account.
- Advertising Fees
Typically, online stores like Etsy offer a range of promotional services to their vendors to help increase sales. The ads are billed using a cost-per-click (CPC) approach. In particular, CPC rates differ depending on the category and country of advertising.
- Currency Conversion Fees
It’s also a popular revenue model for sites similar to Etsy. For example, Etsy charges 2.5 percent of the total sale amount when currency is converted.
That’s why we discussed the types of monetization strategies sites like Etsy can use. can use However, depending on the niche, there may be other methods of charging.
How to build P2P ecommerce sites like Etsy?
Now let’s see what questions You need to answer Think before you start building a marketplace like Etsy.
Step 1. Define your niche and audience
Of course, the most important rule of commerce, people is the to offer what they need. Undoubtedly, the demand for goods characterizes a successful marketplace. For example, CB Insights research has shown that the number one reason startups fail is a lack of customer interest. As work is crowded, you need to think about how to interest buyers. Maybe your future Etsy-like website needs some unique e-commerce features. And also how to differentiate your peer-to-peer marketplace from the competition.
Step 2. Solve the chicken and egg problem
The core of the problem is that nobody buys without a seller. And without goods or services to buy, there will be no buyers. So to develop your marketplace, you should get both sellers and buyers to come to your own website.
Do you know how the Etsy online marketplace solved the chicken-and-egg problem? In the early stages, Rob Kalin and his team were faced with the question: How do you find people to sell their handmade goods on their website?
Interestingly, the solution was to go beyond the World Wide Web.</p
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Etsy representatives began regularly visiting various arts and crafts shows in the United States and Canada. At this time, the anti-consumption movement was gaining popularity. As a result, the number of different fairs where you could buy and sell handmade things skyrocketed.
In short, the Etsy team wanted to attract the most influential artists and vintage collectors. They believed that their followers would follow them. So the followers could be potential customers who are interested in buying handmade items. Meanwhile, leading artists, crafters, and collectors didn’t mind expanding their audience.
So the “recruited” sellers referred their customers to the Etsy site. In this way, they ensured an additional influx of potential buyers.
Certainly, attracting new sellers and buyers is a real challenge for all startups. However, Etsy successfully solved this problem.
Related Reading: 7 Smart Ways to Solve Chicken and Egg Problem for Online Marketplaces
Step 3. Choose a Revenue Model
We have already discussed what monetization strategies the Etsy marketplace uses. These revenue models are Transactions, Subscriptions, Listings, Advertising, Per Order Fees, and Currency Conversion Fees.
Of course, you can monetize your Etsy’s clone site in a number of ways. However, the choice of monetization methods is of great importance.
The main mistake of the development process is to choose a monetization model and persistently develop a product without testing it on a “live” audience. As a result, the marketplace fails because it does not provide the desired value for the consumer. Also, the monetization model may not work. Therefore, effort, time, and budgetary resources are wasted.
When hypotheses are regularly tested, there is virtually no chance of making a wrong move. So, you must try to sell the product using a Minimum Viable Product (MVP) from the start.
First of all, building an MVP is the best way to gauge audience interest. That way, you determine its needs and the right revenue model for startups, including artisanal sites like Etsy.
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Step 4. Identify the basic features
If you are wondering how to build a website like Etsy, your P2P e-commerce marketplace should include the following Etsy features:
- Original and unique web design:
- Convenient management of pages and goods;
- Product catalogue:
- Email or SMS notifications;
- Feedback form:
- Multiple payment methods;
- Shopping cart:
- Multilingual web layout;
- Advanced search filters:
- Goods ratings and the possibility to compare them.
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Step 5. Choose the right tech stack
Specifically, the choice of technology stack can affect the development budget, the time it takes quality of the web application and the scalability of your own marketplace. To build a scalable, secure, and reliable platform like Etsy, we recommend using the right technology stack.
Let’s take a look at the two main parts of the Etsy technology stack: Front-end ( client-side) and backend (server-side). Each of the two parts implements specific functionality and includes a relevant set of tools.
- Front-end or client-side
React is Etsy’s marketplace of choice for its client-side . However, you can choose any other technology stack you need for your website development. At Codica, we prefer React, JavaScript, Vue.js, Gatsby, and HTML5 for building web projects.
- Backend or server-side
On the server-side, Etsy uses the Programming languages Python and Java. For example, you can also choose Ruby on Rails and Ruby for Etsy-like marketplace development.
- Third-party tools and integrations
There are also utilities that Etsy used, such as Google Analytics, AfterShip, AppThwack. In addition, it uses apps like Apache HTTP Server, Amazon S3, Amazon EC2, Amazon CloudFront, Amazon EBS, Amazon EMR, and business tool G Suite.
Step 6. Choose a theme that works
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In order to create the right design for your marketplace software, similar to Etsy’s website design, it is important to look at your website from the user’s point of view. We will try to answer the question of how to create a site like Etsy and share some rules that will help you create an excellent user experience:
- Convenient navigation
Your website’s user interface should be clear and simple. In addition, users should achieve their goals with a minimal number of actions. Developing the design of the app in a way that is clear to users and reduces their operational actions is crucial.
Surely the best way to do this is by hiring skilled user experience and user interface designers.
- Improved readability
We recommend using one font in the design, maximum two: one font for headings and one for body. Also make sure that the font size is comfortable for reading.
- Mobile design
Today, people spend many hours a day searching the Internet. Therefore, it is also important to understand that modern businesses need adaptive design for tablets and phones.
At Codica we develop progressive web apps (PWA) and cross-platform mobile applications, depending on the customer’s needs.
Progressive web apps combine the best of a website and an app. Also, they are much easier to build than regular mobile apps. Additionally, they improve SEO performance which helps your website rank higher in Google. They can also work offline or with a slow internet connection.
For example, Etsy’s PWA allows users to monitor their account activity and chat with other sellers and buyers without relying on a network connection.
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Step 7. Choose a development approach
If you want to know how to do it Create an online marketplace like Etsy, you can use a marketplace builder or order custom web development.
The choice depends on:
- Your idea of a website and all the required features;
- The budget you need to invest in your idea ;
- Your time frame.
By focusing on these criteria, you will narrow your search and increase your chances of finding the right technology partner.
If you need to get a finished product faster, you can create a website using a construction template such as WordPress or Magento. However, if you are looking for ways to create an online marketplace like Etsy, we recommend that you opt for custom software development.
Although the development price may be higher for working with an agency, it is the best option to create profitable websites of high quality.
At Codica we are proud of our successfully completed projects. For example, we supported our client in creating a personalized and attractive web solution for the PlanMyKids online service marketplace. The task was to create a user-friendly web application that would help busy parents to plan and book activities for their children.
Thanks to Codica’s team of experts, our client received a practical and user-oriented MVP of the online offer Marketplace.
How much does it cost to build a website like Etsy?
Now we come to an interesting question about the cost of Etsy’s website.
In short, the main aspects that affect the final price are:
- The development approach: out-of-box solution vs. custom web development;
- The required functionality that you want to implement.
Obviously the finished solution costs less than a custom development. However, for complex projects like creating Etsy’s clone, we recommend that you choose an experienced agency and create a custom website.
Below is a table that gives a rough estimate of the total cost of creating a marketplace such as Etsy Etsy. To get the final prices, we used the average rate of Eastern European development agencies, which is $50 per hour.
How much does it cost to build a website like Etsy?Features Time, HoursCost, $50/hourDesignUX Development64 hours$3,200UI Development96 hours$4,800ArchitectureProject Setup 16 hours $800 DB structure 32 hours $1,600 Integrations Payment (Stripe or PayPal) 64 hours $3,200 Shipping (Shippo) 32 hours $1,600 Main functionality Authorization and security 72 hours $3,600 Account settings 42 hours $2,100 Home Page84 hours$4,200Search and Filter96 hours$4,800Product page42 hours$2,100Reviews48 hours$2,400Cart64 hours$3,200Notifications32 hours$1,600 Buyers -Panel120 hours$6,000Seller panel230 hours$11,500Admin panel192 hours$9,600Wishlist32 hours$1,600No project activity Management6 4 hours $3,200 Quality Assurance 96 hours $4,800 Code review 48 hours $2,400 Total1566 hours$78,300
So if you’re after the cost to create a website like Etsy, the approximate estimate is $78,300. Please note that the final price depends on your web development partner.
There is no doubt that Etsy’s developers have invested significant sums in their web development. So it’s important to understand that building a marketplace like Etsy costs a lot.
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How can Codica help to develop a marketplace like Etsy?
Since 2015, Codica team has been delivering high-quality and powerful e-commerce solutions in various fields. Specifically, we help you build an online marketplace like Etsy. Over the years, we have successfully launched many e-commerce platforms that help our customers to grow their business on online marketplaces, get high traffic and increase sales.
One of the e- Commerce Projects Our Team Is Proud Of is a collaboration marketplace case study for Digital Village. Our client wanted us to set up a platform for collaboration between entrepreneurs and specialists to create excellent software products.
Our team worked thoroughly to implement all the necessary features for the e-commerce marketplace. As a result, thanks to our:
- Project Manager
- UX, our client got a fast loading, fully functional website with a smooth UX and advanced search filters /UI Designer,
- Developers,
- QA Engineers.
We are always happy to share our successful results with our readers. If you’re looking for an experienced web development company to build a handcrafted website like Etsy, please take a minute to browse our portfolio.
Creating a Handcrafted Marketplace: Final Thoughts
So, we’ve discussed all the points you should consider before building a platform like Etsy. We got to know the Etsy success story, discovered the business model of this marketplace and the monetization strategies. Also, you got a picture of how to create a website like Etsy.Now you have this essential information that will help you launch a successful P2P marketplace.
If you’re wondering how to create a website like Etsy but don’t know where to start, here is a help Our team will be happy to help you further. Contact us and we will create a high-quality, user-friendly and successful e-commerce marketplace for you.
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