Etsy is banking on a recently launched free-shipping initiative this holiday season to propel sales
By Mark Maurer Nov. 29, 2019 9:00 am ET Etsy Inc. tries to distinguish itself by offering one-of-a-kind crafts or small-batch handmade items on its vast online marketplace. But there is one area where it wouldn’t mind being more like its biggest e-commerce competitors: free shipping.
“We don’t believe that people wake up in the morning and say, ‘Hey, I want to go shopping for something handcrafted today,’ ” finance chief Rachel Glaser said in an interview. “They wake up saying, ‘I need a gift for my sister’s birthday’ or it’s Christmastime and ‘I need a special gift for a person that I love.’ ”
The company largely derives its revenue from commission on its sellers’ transactions. Etsy sellers set their own prices, including shipping, so they have long had the ability to offer free shipping. Etsy spent more time trying to educate sellers on how to incorporate shipping into the price of their items and persuade them to think about shipping costs as another piece of the costs of goods sold on the income statement, Ms. Glaser said.Newsletter Sign-up “Buyers are accustomed to not paying for shipping because of Amazon Prime,” said Shweta Khajuria, an analyst at RBC Capital Markets. “And Etsy sellers want to be price competitive so they’re not shifting their prices much.
To appease sellers, the company in August launched an advertising platform for sellers called Etsy Ads to make it easier for them to promote listings.
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