Etsy's Revenue Model Case Study
Etsy’s revenue model is simple. The company makes money when Etsy sellers make money, as described by the website itself. Etsy uses a combination of two financial models to generate revenue: transaction fee and advertising revenue model.
In terms of the transaction fee revenue model, the company charges its sellers a listing fee of 20 cents for every product that is listed for sale. The listing of a product lasts for 4 months and after its expiration, the seller may choose to renew the listing by paying an additional 20 cents. Sellers are free to set their products’ prices as he or she believes is more convenient. However, despite of the selling price, Etsy will also charge a commission of 3.5% for every product that is sold through the website.
In terms of the transaction fee revenue model, the company charges its sellers a listing fee of 20 cents for every product that is listed for sale. The listing of a product lasts for 4 months and after its expiration, the seller may choose to renew the listing by paying an additional 20 cents. Sellers are free to set their products’ prices as he or she believes is more convenient. However, despite of the selling price, Etsy will also charge a commission of 3.5% for every product that is sold through the website.