While there are many eCommerce marketplaces online, only a few cater to sellers looking to sell unique, handmade products. Etsy is one of the most exciting examples of building a global craft business.
For 17 years, Etsy has been a platform for selling products like sculptures and handwritten recipes. In general, it is an e-commerce website that focuses on selling handmade or vintage products from individuals.
In this article, we will discover how to create a website like Etsy. You will learn how this two-sided e-commerce online marketplace works and how it makes money. In addition, you will find out how much it costs to create a platform similar to Etsy and what main 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 look for on the Etsy website? All! Unique designer stuff, creative gifts, vintage items—customers will find it all here.
Source: Etsy.com
How It Started
The idea for the e-commerce website launch belongs to artist and photographer Rob Kalin. Kalin says the idea of developing Etsy’s online marketplace came to mind when he realized there wasn’t a proper place on the marketplace to sell handmade products.
The entrepreneur’s partners they were his two friends Chris Maguire and Haim Schoppic. The originality of the idea and the presence of a free niche prompted friends to undertake the implementation of the project. None of them were experts in the domain of web development, but they were all fans of creativity and wanted to make the world a better place.
Three months later, a prototype of the platform, which was named Etsy , I was ready. Kalin said the online marketplace got its name because it sounds great and it’s convenient to build a brand with unique characteristics around such an original word. Interestingly, “Etsy” comes from the Italian “еh, yes”.
Gradually, the service began to significantly increase its target audience and attract sellers. In July 2007, the millionth sale was made on the Etsy Craft Market. And in November of the same year, more than 300,000 purchases worth more than 4.3 million dollars were made in the market.
The high growth rate of the service’s audience soon attracted the attention of venture capital funds. So, in January 2008, Etsy received a $27 million investment.
Today, Etsy is a super successful e-commerce company, and many are asking: how to 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 CNBC’s Mad Money.
Key facts by Etsy
If you’re wondering how to build a website like Etsy, let’s take a quick look at the key facts about Etsy.
- Founder: Rob Kalin, Jared Tarbell, Haim Schoppic and Chris Maguire
- Year Founded: 2005
- Funding Received: A total of $97.3 million over 9 rounds
- Number of Users: 80+ million users
- Number of sellers: 5+ million active sellers
- Number of employees: 1,400 employees
- Etsy competitors: eBay, ArtFire, Aftcra, Ruby Lane.
Business Model
Etsy’s business model is similar to other online marketplaces such as eBay and Amazon . It’s a two-sided P2P marketplace for selling and buying precise, unique, and creative items.
What sets Etsy apart from other platforms? It’s the vertical approach to Etsy’s business model. In general, the market focuses on selling crafts in very specific categories. Simply put, this market is home to a whole universe of offbeat specialty items. For example, they can be unique handmade items or vintage treasures.
Source: Etsy.com
For comparison, Amazon-like sites have a horizontal business model where almost everything is for sale. .
You may also be interested in: How much does it cost to create a website like Amazon?
Etsy payment gateways
There there are dozens of gateway providers. However, the Etsy marketplace cooperates with authorized providers such as:
- PayPal,
- Worldpay,
- Adyen,
- Stripe Connect.
Of course, PayPal is the most famous and popular payment solution. It had more than 426 million users worldwide in 2021. Therefore, with PayPal you can expand the audience of your own site.
Source: Statista.com
In addition, Etsy marketplace users can pay with credit cards, debit cards, bank cards, Etsy gift card, Etsy credits, etc.
How can a platform like Etsy make money?
Now, let’s go into the details of how the Etsy-like marketplace can monetize and how Etsy does it.
- Transaction Fees
Etsy charges sellers a transaction fee of 5 percent of the price for each successful sale through its platform.
- Subscription Fees
Sellers on websites like Etsy are often able to subscribe to a package that offers several additional tools to increase sales. These can be advanced store customization or access to discounts. For example, the Etsy marketplace charges a monthly subscription at the Etsy Plus package fee of $10.
- Pattern Tool Fees
Pattern is a Website builder created by the Etsy Marketplace for its sellers. It allows merchants to create their online stores on domains that are independent of the Etsy platform. The first thirty days of using Pattern are free. Etsy then charges a $15 monthly subscription fee.
- Listing Fees
Etsy charges vendors at least $0.20 for each item they list on the platform. However, that is a profitable revenue model for a marketplace like Etsy. Because? Because thousands of products are regularly listed on it.
- Order commissions
In addition, Etsy monetizes its marketplace through fees through payment processing . The total amount of the fee per order varies depending on the location of the seller’s bank account.
- Advertising Fees
In general, stores in Online like Etsy offer a variety of promotional services to help their vendors increase sales. Ads are charged through a cost-per-click (CPC) approach. In particular, CPC rates differ depending on the category and country of the ad.
- Currency conversion rates
It is also a popular revenue model for websites similar to Etsy. For example, Etsy charges 2.5 percent of the total sale amount when converting currency.
So, we’ve discussed what kinds of monetization strategies websites like Etsy can use. I can use. However, depending on the niche, there may be other methods of charging fees.
How to create P2P e-commerce websites like Etsy?
Now let’s see what questions you need to consider before you start building a marketplace like Etsy.
Step 1. Define your niche and audience
Obviously, the most essential rule of commerce is to give people what they need. Without a doubt, the demand for goods characterizes a successful market. For example, CB Insights research showed that the number one reason startups fail is lack of customer interest.
Source: Statista.com
If the niche in The one you go to work is crowded, you need to think about how you can interest buyers. Perhaps, your future Etsy-like site requires some unique eCommerce features. And also, how to stand out from the competition with your peer-to-peer market.
Step 2. Solve the chicken and egg problem
The crux of the problem is that nobody will a purchase without sellers. And without goods or services to buy, there will be no buyers. So, to develop your marketplace, you need to attract both sellers and buyers to visit your own website.
Do you know how Etsy’s online marketplace solved the egg and shell problem? hen? At the initial stage, Rob Kalin and his team were faced with the question: how do you find people selling your handmade products on your site?
Interestingly, the solution was to go beyond the World Wide Web.
Etsy representatives began regularly visiting various art and craft shows throughout the US and Canada. At the time, the anti-consumer movement was gaining popularity. Thus, the number of fairs where handmade things could be bought or sold grew by leaps and bounds.
Simply put, the Etsy team aimed to appeal to vintage artists and collectors. most influential. They believed that their followers would follow them. So the followers could be potential customers interested in purchasing handmade items. Meanwhile, major artists, crafters, and collectors didn’t mind expanding their audience.
So “recruited” sellers referred their customers to the Etsy site. In this way, they provided 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 Clever Ways to Solve the Chicken and Egg Problem for Online Marketplaces
Step 3. Choose a Model Revenue
We’ve already discussed what monetization strategies the Etsy marketplace uses. These revenue models are transaction, subscription, listing, advertising, order fees, and currency conversion fees.
You can certainly monetize your Etsy clone’s website in a number of different ways. However, the choice of monetization methods is of great importance.
The biggest mistake in the development process is choosing a monetization model and stubbornly developing a product without testing it on a “live” audience. As a result, the market fails because it does not provide the desired value for the consumer. Also, the monetization model may not work. Thus, efforts, time, and budgetary resources will be wasted.
If hypotheses are tested regularly, there is virtually no way to make a wrong move. Therefore, you should try to sell the product early on with the help of a Minimum Viable Product (MVP).
Notably, building an MVP is the best way to determine audience interest. Thus, it will determine your needs and the right revenue model for startups, including craft websites like Etsy.
You may also be interested in: How to Create a Minimum Viable Product (MVP): Best Examples and Key Benefits
Step 4. Identify Core Functionality
If you’re wondering how to build a website like Etsy, your P2P eCommerce marketplace should include the following Etsy features:
- Original and unique web design:
- Easy page and product management;
- Product catalogue:
- Email or SMS notifications;
- Feedback form:
- Multiple payment methods;
- Shopping cart:
- Multilingual web design;
- Improved search filters:
- Product reviews and the ability to compare them.
You may also be interested in: 14 Quick Ways to Attract Sellers and Co Buyers to the P2P Marketplace Platform
Step 5. Select the right technology
In particular, choose the technology The logic stack can affect the development budget, time, quality of the web application and the scalability of your own marketplace. To create a scalable, secure, and reliable platform like Etsy, we recommend that you use the right technology stack.
Let’s take a look at the two main parts of Etsy’s technology stack: front-end (client -side) and back-end (server-side). Each of the two parts implements specific functions and comprises a relevant set of tools.
- Front-end or client-side
React is the choice from the Etsy Marketplace for your 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.
- Back-end or server-side
At As for the server side, Etsy uses the Python and Java programming languages. For example, you can also choose Ruby on Rails and Ruby for Etsy-like marketplace development.
- Third-party tools and integrations
In addition, there are utilities used by Etsy, such as Google Analytics, AfterShip, AppThwack. In addition, it uses applications such as Apache HTTP Server, Amazon S3, Amazon EC2, Amazon CloudFront, Amazon EBS, Amazon EMR, and the G Suite business tool.
Step 6. Choose a design that works</h3
To create the right layout for your marketplace software, similar to Etsy’s website layout, it’s important to look at your site from the users point of view. We will try to answer the question about how to create a website like Etsy and share some rules that will help you create a great user experience:
- Convenient navigation
The interface of your site should be understandable and simple. In addition, users must achieve their goals with a minimum number of actions. It is crucial to develop the application blueprint in such a way that it is clear to users and reduces their operational actions.
Surely, the best way to do this is to hire qualified 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 text. Also, make the font size comfortable for reading.
- Mobile Design
Nowadays, people spend many hours a day searching on Internet. Therefore, it is also critical to understand that modern businesses need responsive design for tablets and mobiles.
At Codica, we develop Progressive Web Apps (PWAs) and cross-platform mobile apps, based on client request. .
In particular, Progressive Web Apps combine the best of a website and an app. Also, they are much easier to create than regular mobile apps. Plus, they improve SEO performance, which will help your site rank higher on Google. In addition, they can 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.</p
You may also be interested in: 5 fundamental principles for a user-friendly website that you should know
Step 7. Choose a development approach
If you’re looking to create an online marketplace like Etsy, you can use a marketplace builder or request custom web development.
The choice depends on:
- Your idea of a website and all the features it requires;
- The budget you have 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 receive a ready product faster, you can create a site with the help of a construction template such as WordPress or Magento. However, if you’re looking to create an online marketplace like Etsy, we recommend going for custom software development.
Although the development price of partnering with an agency may be higher, it’s the best option for building high-quality, profitable websites.
At Codica, we are proud of our successfully completed projects. For example, we helped our client create a customized and attractive web solution for the PlanMyKids online services marketplace. The task was to create an easy-to-use web application that would help busy parents plan and book activities for their children.
Thanks to the team of professionals at Codica, our client received a convenient and user-oriented MVP from the online marketplace.
How much does it cost to create a website like Etsy?
Now, we have come to an interesting question about the cost of the Etsy website.
In a few words, the main aspects that have an impact on the final price are:
- The development approach: ready-made solution vs custom web development;
- The required functionality that you want to implement.
Obviously, the ready-made solution costs less than custom development. However, for complex projects like creating an Etsy clone, we recommend that you choose an agency with experience in creating a custom website.
You can see a table below that shows a rough estimate of the total cost to create a marketplace like Etsy. To receive final prices, we use the average rate for development agencies in Eastern Europe, which is $50 per hour.
How much does it cost to build a website like Etsy?FeaturesTime, hoursCost, $50/hourDesignUX Development64 hours$3,200UI Development96 hours$4,800Architecture Project configuration16 hours$800DB structure32 hours$1600IntegrationsPayment (Stripe or PayPal)64 hours$3200Shipping (Shippo)32 hours$1600Main functionalityAuthorization and security72 hours$3600 Account Setup42 hours$2100Top Page84 hours$4200Search & Filters96 hours$4800Product Page42 hours$2100Reviews and Ratings48 hours$2400Shopping Cart64 hours$3200Notifications32 hours$1600Buyer Panel120 hours$6000Supplier Panel230 hours$11500Admin Panel192 hours$9600List wishes32 hours$1600No project development activityadministration64 hours$3200Contr Quality ol96 hours$4800Code review48 hours$2400Total1566 hours$78,300
So if you are looking for how much does it cost to create a website Like Etsy, the ballpark estimate is $78,300. Please keep in mind that the final price will depend on your web development partner.
No doubt, the creators of Etsy invested significant sums in their web development. Therefore, it is important to understand that building a marketplace like Etsy will not cost a small amount.
You may also be interested in: How much does it cost to build a website in 2022?
How Can Codica help develop a marketplace like Etsy?
Since 2015, the Codica team has been providing high-quality and powerful eCommerce solutions across different domains. In particular, we will help you create an online marketplace like Etsy. Over the years, we have successfully launched many e-commerce platforms that help our clients grow their online marketplace business, receive high traffic and increase sales.
One of the projects e-commerce that our team is proud of is a collaborative market case study for Digital Village. Our client wanted us to establish a collaboration platform between entrepreneurs and specialists to create excellent software products.
Our team worked hard to implement all the necessary functions for the e-commerce market. As a result, our client got a fully functional and fast loading website with smooth UX and advanced search filters, thanks to our:
- Project Managers,
- UX/UI Designers,
- 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 handmade website like Etsy, take a look at our portfolio.
Building a Handmade Marketplace: Final Thoughts
So, we have discussed all the points you should consider before building a platform like Etsy. We get acquainted with the Etsy success story, find out about the business model of this marketplace and monetization strategies. Also, you understood how to create a website like Etsy.Now, you have this essential information to 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, our team is here to help. happy to help. Contact us and we will create a high-quality, easy-to-use and successful eCommerce marketplace for you.
.