Etsy just released its financial results for 2019's third quarter (July to September) - here are the highlights:
and here are the slides that go with the presentation: https://s22.q4cdn.com/941741262/files/doc_financials/2019/q3/Etsy-3Q-2019-Earnings-Presentation.pdf (I haven't looked at them yet)
The stock is down because Etsy lowered its guidance: https://www.marketwatch.com/story/etsy-stock-down-10-after-company-lowers-guidance-2019-10-30 although I am seeing the usual rise, then drop, then rise happening: https://www.google.com/search?q=Etsy+stock&pws=0&gl=us&gws_rd=cr As always, it will take a while for everyone to digest the full report and call.
The investor phone call starts at 5 pm ET; I will try to listen in & post highlights afterwards. A transcript of that call will eventually be posted here: https://seekingalpha.com/symbol/ETSY?news=transcripts and usually elsewhere, within the next 48 hours.
I will mark any key updates as "solutions" so the posts will be highlighted, and will add to this OP in the next hour for as long as I can edit it.
My previous threads on quarterly results, for comparison:
I wonder if this Linear, non Linear thinking for search is just like the BERT update Google did October 25th. The biggest update in 5 years, or so they say.
"When is BERT used? Google said BERT helps better understand the nuances and context of words in searches and better match those queries with more relevant results. It is also used for featured snippets"
My Feeling for Etsy last 1 year
1- Scared for not Selling
2- Sad and Depressed for not Selling ( Even listed items at cost price , not now )
3- Now 50% Sad and 50% indifferent ( every day its more indifferent )
i have more than 500 handmade ready to ship but no need to list here when they dont show to buyers
I'm in the same boat as you PUREWHITEDECO couldn't have said it better!
Ok, first a correction pointed out by @MouseGarden (thank you!) - tests ("experiments") are about 100 a month now, not 500. It was a five-fold increase from 2016, up to around 100 a month right now in 2019. I apologize for my error (and this is why I often don't report numbers until I have the written transcripts LOL)
Second, some more media coverage: some analysts are arguing that the stock plunge means this is a great time to buy: https://investorplace.com/2019/11/3-big-reasons-why-etsy-stock-looks-good-on-the-dip/
"ETSY stock is getting killed because: 1) the pace of revenue rate expansion is slowing, causing a material slowdown in revenue growth despite steady 20%-plus gross merchandise sales growth, and 2) margin expansion is similarly slowing, and adjusted EBITDA margins are expected to drop this year. Both of these negative developments are almost exclusively the result of Etsy acquiring Reverb, an online music gear marketplace. ...In 2020, the company will likely do all it can to improve Reverb’s take rates and margins. As they do that, Etsy’s overall take rates and margins should improve."
If you search for recent news stories, several companies have confirmed that they still consider Etsy a stock worth buying. (None of them have more detail than that, so I will spare you the links).
i have a feeling more sellers will be dropping those ads as time goes on.
zero return on ad costs is not a good market strategy for most of us.
Is there a quick way to figure out if overall sales are up or down? I've tried looking through the documents and can't really figure out where it's broken down. I know Etsy is making money but I'm curious more about if the community at large is making money. It's easy to see on the forums people complaining of sales down but your not going to see the ones talking about sales up especially if they are too busy working.
I guess really it's easier to accept that it's ok if my sales are down as long as someone else's are up. I guess I'm just trying to figure out the bigger picture. I scroll through a lot on Reddit, Facebook, Amazon forums etc. Everywhere I go I find people complaining and so I wonder if just overall sales are down online, maybe the economy?
Also whoever said Etsy promotes its self as handmade...they don't. The buzzword changed from handmade to "unique" awhile ago.
The statistic you need is the equivalent of a retail operation's "same store sales". Take all the shops open for 12 months and compare their sales year over year. That would give an accurate representation of the health/growth of sales. Retailers take out all new locations (shops in the case of Etsy) that distort growth year over year.
@ModernSwitch sales on Etsy were up around 20% this quarter, but that does include some of the US free shipping costs being rolled into item prices. Since
it doesn't look like the shipping fees could possibly account for that 20%. So, sales were up, but we don't know how much they were really up. Etsy probably has a model to show that but they did not reveal that. (I definitely know some people who were up, but they tend to get attacked here in the forum, especially during times of upheaval like this, so they are sometimes afraid to mention it.)
As far as I can remember, Etsy has never given us the "same store sales" that @EightMileVintage mentions, even back in the old days of the "Weather Report", long before Etsy went public.
@ModernSwitch @silcoon52 @ClubEsquire @LaReineBoheme @DivineCrossings and all my friends here on etsy, I think it's the economy BUT maybe not- maybe it's more the increased number of sellers on increased sites. also, maybe it's the Gen X & Y focus on electronics, the latest iPhone.
I started ebay about 9-10 years ago- the last 3 years really slowed for me. I have friends who sell BIG on ebay, really big, but am being told their sales are down significantly last 2 years. Still, very good sales. I also remember how many were leaving ebay the years before I started, and being told how good is it used to be. sellers who sold big, everything sold, many at very good prices, auctions were competitive. many of these people I met stopped selling before I started. For example, some 60s 70s famous groupies (nice ladies), sold loads of dresses and costumes, good monthly gross and profit; and someone sold old games- they made a lot of money (by any standard) sold quickly, and they got good prices. and than everything slowed, and things sat. Some gave up ebay. In my estimation, Amazon fees are too high, and on the handmade, we would have to do our own shipping (couldn't use their warehouses or trucks) and it's 15% on everything!
Many (not all) Buyers seem to think they can get everything for nothing; I had a $600 offer for a gold charm bracelet - when there is $850 of 14 kt gold not to mention the jewelry value.
I am currently having a problem with ebay overbilling, usually they will work with me better than etsy. I looked at ebid (I think) they hold your payment until the buyer confirms receipt- no I don't like. Baroqoo, I have trouble accessing their website, and some I had trouble with their categories. too broad and/or not the right keyword SEO. I am continuing on etsy, but need additional venues. m what is it, red something (forget) wants $100 to set up your shop and than 69 month. some are "free" but offer services; can't quite figure out the benefits, meaning, they don't make it clear. I can't even get an idea on their sales statistics; if they aren't public, they don't have to say.
The average price point of an item on Etsy is $15-20. I think 20% could easily be new shipping, new shops, reverb vs existing shops increasing their sales.
@nottoto I think the last time they published that number was 2015 and it was about $20, across all purchases.
In 2018 a 32 yo made average of 9 purchases a year with an AOV of $78. A 44 yo buyer made 12 purchases a year with an AOV of $64. (Page 67 in link below)
What is really interesting is during the holiday season 2018 they say “80% of domestic items had competitively priced shipping.....with 33% shipping for free.”
Clearly, competitively price shipping doesn’t matter any more, only free.
$4 in shipping divided by $20 order is 20%. Let’s say the boost from shipping included was 10% though since we know seller ate a lot of costs. Another 10% could have come from new sellers and reverb. So a 20% increase doesn’t mean sales are up with existing sellers. My yoy on ebays dashboard usually says most sellers are up 1-2% yoy and there’s been no major disruption there. I doubt the average seller on etsy is up 20%. This leads me to believe it’s shipping, new sellers, reverb and maybe some fuzzy math that account for 20% increase in sales. Not that existing sellers are selling so much more.
@MinxouriVintage the 20% number does not include Reverb, which actually lost money, I believe, but Etsy expects it to be turned around by next year & become a net income addition. Gross sales were up 30% including Reverb
New shops are always going to be part of Etsy's increase, and that shows that there is still room for the site to grow with more sales. Etsy doesn't really care if existing shops make more, nor does the market.
As far as I know, Etsy no longer gives us the numbers which allow us to calculate the average sold item price or average order price. Item price used to be in the low to mid-$20 US range, back when we could calculate it, and did vary a bit by quarter.
If you are trying to separate out the free shipping costs, you'd want the average order amount, not the sales amount. Today I had one person buy one item & one person buy 12 charms, but it costs me the same price to ship both packages.
CindyLouwhotwo I think if I read the q3 sales report that included were the results of Reverb which made it appear the sales were up-not sure but I think it was mentioned.
there are so many post I can't find I wanted to answer. Seller complained about foreign sales- that USPS no longer gave confirmation of 1st class delivery foreign. I checked with PO- it never did- just within the USA. I haven't had a problem, and always add insurance. PO mgr said there are the most problems with Canada and Italy (heard before). Last 2 years, most of my foreign sales have been to Canada so I guess I've been lucky. Uk and maybe EU have liberal return policies, but I can't afford to take returns, and eat the shipping too- so far it's been OK.
Also, said, got 2 packages back as undeliverable. and had to pay $20- I say no returns, no cancellations. If etsy or paypal or whomever, says its paid for, I have the money, and I ship to the registered, confirmed address, Sometimes I check, like do you need a signature (USA). I am not making any refunds. if it's on a credit card they can challenge. but if you sent, in good faith, on information provided, you have done your job. did these buyers contact you? Someone said, a buyer didn't want to pay the VAT and wanted a refund. I think not. I had 3 buyers recently say, their acct was compromised and they didn't order (before I shipped). I was out the door with the package. In 2 cases, it was ship to the acct address. One wanted me to ship to another state. I had contacted to inquire and get confirmation. Years ago, I had a paid buy, and confirmation to ship- so I shipped quickly. You know how they want it all out asap. well, I think less than 10 hours later, I get a note the acct holders say it was unauthorized (hacked) I had to say, you told me paid and verified address, and told me to ship. I kept the money.
I have to wonder if the removal of “free shipping eligible” in search results has something to do with the decrease in conversions. Are they trying to push sellers to offer simple free shipping on all items and build more into the price to improve their numbers? Did the free ship guarantee cause more confusion for buyers or is it the reduced number or relevant results in search due to the priority placement?
I can’t imagine they will allow conversion rates to continue to drop, regardless, but I can imagine all the carrots and sticks they could use to improve numbers.
What? Are free ship eligible not getting the same placement? I already have to manually remove every listing from ads. I also have to manually add free shipping to every listing?
Oh, so they basically discovered what all of us did years ago that free shipping at X amount is the sale that’s the least likely to result in a sale and they removed it.
@LandandSeaGems I've been seeing more testing with other items placements in a listing. I'm also seeing FSE items on the page when filtering for "free shipping". Are you seeing that as well when you filter for free shipping? Having an item ship free if you spend over $35 in a sellers shop is not the same as free shipping and I think could be confusing buyers quite a bit.
Frankly, Etsy needs to start scaling back on all these placement tests and listing page layout tests. I feel like every time I run searches here, the layout on an item page varies wildly. How many items shown in "you may also like" as well as ads vary from browser to browser, logged in versus incognito, etc etc.
I can't recall going to any other marketplace as a buyer (Ebay, Amazon) and having listings there be constantly changing from day to day. Personally I would get tired of re-training my brain to find the info and important things I look for when buying an item.
@Gokojo Yes, when filtering. I reached peak frustration with all the testing some time ago. It seems to me that increased velocity in testing was/is the goal and it is not likely to slow anytime soon. I’ve learned to just roll my eyes and keep moving. Lol.
I am more bothered by lack of transparency these days and bugs, lack of response to them, lack of a fix for months or any updates. Now, if they could apply the same velocity to fixing bugs ....... or giving updates...or even updating incorrect information in the seller handbook.....
I agree @LandandSeaGems in regards to the lack of transparency and testing we have to do just to formulate an educated guess about what's going on.
While that's annoying on the seller side, it's the buyers being confused that concerns me the most. I'll begrudgingly deal with the sales side BS as long as the buyer experience is great. Right now with all these tests on the buyers side, during my busiest time of the year selling furniture for upcoming holidays, is less than optimal for both parties.