Etsy Case study discussed in class

Early warning signals of decline at Etsy

Despite growth in 2013, Etsy was not profitable.?

The company was losing money due to rising costs that arose from scaling up operations.?

In 2013 Dickerson began to increase the marketing budget to 40million.However increasing investment in Marketing was not leading to topline Growth. In October 2013sellers were encouraged to design their own products and could partner with 3rd. Party to manufacture the products. This move angered some long-time sellers. Despite growth in 2013, Etsy was not profitable??

2014: The organization incurred a net loss of $15 million??

2015: Loss of $ 2.5 mn?

2016: Loss of $30 mn .?

According to Jim Collins, moving away from core business where Etsy is in stage 2 trying to pursue more , Etsy began to diversify in a undiciplined way. Effort on core business got diversified because employees in the organisation were sent in random directions.?

In March 2017 Black and white hedge fund bought a 2% stake in Etsy. Black & white criticized Etsy’s business practices, its Management. GMS growth was on the decline / coming down???

Well-known private equity firms Dragoneer and TPG began to take stakes indicating signs of a hostile takeover.?

Etsy’s Board met and decided that Dickerson would have to step down and he did so in May 2017. He was among 80 employees laid off, which angered the rest. Silverman felt that Etsy would not be able to survive as an independent organization. His apprehension was that Elsy would be purchased at a rock – bottom price.

He felt that the Management and employees at Elsy had good intensions, but were unable to execute these intensions.?

He felt Etsy’s employees were treated well. Barring this there were no other positive social outcomes. The New Team produced a Turnaround plan including a strategic shift in organisation structure, product design, sense of mission and ability to create social improvements and impact.

ETSY : QUARTERLY REVENUES?

ETSY’S TURNAROUND STRATEGY had 3 goals??

Focus on the core business, streamline processes??

Clearly define culture in the organisation, work on a mission that aims at the workforce as the??

fundamentals in the organisation? .??

Just like Richard Branson of Virgin airlines has clearly stated that looking after your employees welfare will inturn amke them look after the organisation’s clients thereby improving sales revenue??

Define with clarity and stringently measure the social?? economic and environmental impact of the company??

Here it will be appropriate to carry out the Pestle Analysis of Etsy.

ACTION PLAN??

Gross Merchandising sales (GMS) would be the company’s most important metric to measure the outcome of the turnaround plan.

If there is an increase, the Seller on Etsy can gauge the demand of the Buyer and sell what will be bought. Hence the demand supply equation was working .?

In order to increase GMS??

Global internet handmade goods market equals $140billion - $170billion in sales realization?

ETSY - FINANCIALS ? ? Revenue in 2021 =2.32billion, 34% YOY increase

Net Income =$ 493 million in 2021

Gross merchandise volume = 13.4bn$ which doubled in the previous year?

ETSY has been making a profit since 2017and in 2021 profit is $493mn, the company's 5 th year of profit.

Top 6 retail categories of Etsy??include the categories listed below

Home furnishings?

Jewellery?

Craft supplies?

Apparel?

Paper?

Party supplies?

Beauty and personal care?

Handmade goods is the?

?This is a work in progress document.