Etsy: It's community, not commerce

The business model offered by platform marketplaces sounds simple: Bring buyers and sellers together in a scalable volume neither could achieve on their own. The reality is that these marketplaces are anything but simple. Important questions are surfacing for chief marketing officers and platform designers about what drives user trust and, ultimately, sustained loyalty at each stage of a platform’s growth.

Brands that are nailing the user trust quotient see their marketplace as a community rather than just a platform for commerce. Etsy, which considers its success wholly dependent on its sellers’ success as entrepreneurs, has done this well.

Etsy has long operated with a community model that enables high-quality interactions between sellers and buyers, empowers sellers with business skills, and engages sellers in the platform’s service design. When Etsy launched, it built critical mass by aligning with an existing community of “feminist crafters” and “alt crafters” that had already established a substantial, word-of-mouth network. While those communities had built a significant following, what they were missing was a marketplace. Etsy recognized that if it could deliver the marketplace while amplifying the voice of the seller community even more, a deep trust would form and network effects (users beget users) could drive sustained growth.

“Essentially, building a community around your marketplace means making your users feel that the marketplace is a part of their identity,” marketplace expert Cristóbal Gracia has observed. That’s key. It’s the very commonality among its sellers that sits at the core of the Etsy success—they shared an identity as crafters, artists, creators, collectors, and makers already. Etsy expanded that shared identity into entrepreneurs who aim to earn a living with their craft.

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This editorial brief was originally published in issue 3 of The Practice Papers. VIEW FULL EDITION HERE >>