How to build website like Etsy
Global marketplaces are indeed growing and taking more and more market share. Retailers from all over the world expect Global marketplaces such as Amazon, eBay and Alibaba to own almost 40% of the global online retail market within five years.
Have you ever tried to scratch where it itches? I mean, whenever you realized a need for something, and you couldn’t find a solution for this – maybe you thought about how to develop your own one? If not, definitely you should think, cause your problem might affect not only you but also a very large number of other people. Perhaps the same can be said about Rob Kalin, who in 2005 felt the urgent need to create a craft community, where people could share an experience and earn on their favorite business. That's how an Etsy appeared – one of the world leader platforms, focused on vintage and handmade items sale.
What is Etsy, how & why it was growing
Global marketplaces are indeed growing and taking more and more market share. Retailers from all over the world expect Global marketplaces such as Amazon, eBay and Alibaba to own almost 40% of the global online retail market within five years. Returning to Etsy, it’s idea fared so coolly that within 3 years it turned into the company's foundational engineering culture, treating "Code as Craft". As time has passed, the desire for cozy and beautiful things didn’t slow down. Moreover, it has grown into a sophisticated technology platform that connects Etsy sellers and buyers across borders, languages, and devices.
There are dozens of Internet marketplaces where you can set up shop and sell online. But which sites are worth your time? Finding the right ones depends on what you’re selling, who you’re trying to reach, and what you're willing to pay. However, in 2013, Etsy had $1.35 billion in merchandise sales volume. This is from $170,000 that was sold in 2005. So what is the secret, and what factors highlight Etsy among the competitors?
Etsy’s business model is quite simple. It is based on shared success: product owners make money when Etsy sellers make money. Marketplace revenue includes a $0.20 USD listing fee for each item listed and a 3.5% fee for sales completed on a website. Additional revenue comes from seller services, which include payment processing, advertising platform and discounted shipping labels.
In 2014, Etsy’s Seller Survey revealed a unique population of Internet-enabled creative entrepreneurs who are building businesses on their own terms—prioritizing flexibility, independence, and creativity. 76% of US sellers consider their Etsy shop to be a business, and for almost a third, their creative business has become so well established that they are able to focus on it as their sole occupation.
So, Etsy is very simple for an end user. It makes easy to earn money on things you love. It is flexible and you can use it independently to your location.
Options of building: to build a project by your own or to hire freelancers/specialists?
Let's say you have decided to create a similar product, your own platform for sales. So where do you have to start? First of all, you need to decide how you will develop it: whether you will hire specialists or you will do it by yourself? Will it be a freelancer or the company's services? Let's try to compare.
Of course, if you are developing such project by your own, it would be much cheaper. But there is one thing - you should be a good programmer to create a decent product. For sure, you can always use the ready-made templates, engines, and plug-ins. But sooner or later any website meets bugs or issues to expand, which are not always easy to solve by the ordinary user. In a case of bugs, which arise because of to the plugin author’s fault, you can always wait for the update to fix. But if you run a serious business with a large audience, such issues may become very critical.
From the other side – you have to think about estimates. How much time are you willing to offer for the product development? If you are a full-time worker, and you are going to build a platform in your spare time, it is likely that it will be delayed for a long time and your great idea will come to your competitor.
But the best choice is to make an investment in a really high-quality product. Thus, you will have to hire a team of professionals. Yes, it's expensive, but it brings a lot of benefits such as a finished product with a guarantee of quality and attentive support. In this case, your product will be always ready to get a fairly quick salvation whether it meet any critical issue.
However, everything depends on you. If you are creating a small hobby project, of course, you can do everything by yourself and in an inexpensive way. But if you are expecting for a huge audience growth and businesses expansion -you should think about hiring a pro team. For example, hiring an in-house developer doesn’t make a guarantee about his qualification. Here on stackexchange.com you can see a live example, where a freelancer applied for a project, spent some time developing it and then realised that it’s too difficult for him. Otherwise, a pro-team provides clear estimates from the start and offers small releases, thus, you are always familiar with your projects progress.
Trust me, smart investment can save the nerves and money in the future.
Great marketplaces are built from the niche to the masses. You need to cement the experience for your early adopters/niche users before you can begin to appeal to a broader audience.
Before any start, you have to provide a careful preparation. You need to develop a plan, the main idea, deadlines, priorities, etc. Anyway, you will need to clarify your reasons and your goals. Try to make your idea as clear as possible, examine the market, make a list of competitors, study them, see what kind of problems they are facing and try to understand whether you will be faced with something similar.
While you will develop a business plan, you will be reconsidering and reevaluating following concepts:
- Executive Summary: By definition, to summarize the elements of your business
- Company Description: For identification, to introduce your readers to your company and your business concept
- Industry analysis: To provide a picture of your industry and of the position of your business within the larger framework
- Market and Competition: To evaluate what you are getting into.
- Strategies and Goals: To analyze the market and your competition in order to determine how and where your company or products or services fit and to maximize your position in your target market
- Products or Services: To describe your products or services and how they match your findings of your strategies and goals
- Marketing and Sales: To market your products or services with the best positioning and to forecast your sales based on the findings of categories four, five, and six, in that order
- Management and Organization: To present the management and personnel who will run the show.
- Operations: To explain how the business is run
- Financial Pro Formas: To forecast successful financial performance for all activities
- Financial Requirement: To present the type and amount of financing needed, based on the previous sections, to accomplish the whole plan
- Exhibits: By definition, to close the plan and separate any supporting materials that would otherwise interrupt the flow of the story
Don't be concerned if you aren't familiar with all of these concepts. Writing a business plan for your new business is a straightforward process that you can move through step by step to completion. However, while you are working with these issues, you have to learn each of them more closely and attentively.
Structure of work & costs
Let's compare the structure of the project, depending on whether you build it by yourself or hire a team of professionals.
By your own:
Commonly you are able to buy a ready-made template for a CMS. Also, you can hire a freelancer designer. But if you are not so strong in programming, you will need to find another freelancer, who will take a part of front-end development. As for an individual logo, you may get a cheap one from Fiverr for $5. If you have a bigger budget, check Youzign or 99designs.
By professional team:
All development is carried out individually and agreed with the customer. You have the opportunity to work closely with the designer, from time to time offering your improvements and suggestions. In the end, you get a ready-made, individual and smart interface. It is worth to mention that you will also have a clear site structure which makes a work on the next stages much easier. Moreover, you will be provided by all user behavior scenarios, what causes site conversion increase.
By your own:
Having a poor understanding of programming, you may be limited by CMS functionality. You will be able to move some blocks and to change some elements on your website if it is predicted in your engine’s admin panel. Otherwise, you can work only with functionality out of the box.
By professional team:
Having received the necessary design, you will get a fully functional image of your future project. Also, you will have an ability to prepare your business ideas and to arrange functional blocks exactly as you like and as it will be beneficial for your project.
By your own:
If you are not familiar with programming, you have one option - to buy a ready-made solution. There are two main CMS options: WordPress and custom PHP scripts. In a case of using WordPress, you can check following Etsy themes: Marketify, Walleto. As for custom PHP scripts, you may try EtsyClone, Agriya, and NineHertz.
In this case, your functionality and ideas will be limited to the products from the box. Moreover, if you are expecting to build a huge project with a complex functional and growing audience, then the load on your site will be considerable, which subsequently will lead to the slow work of ready-made solutions.
By professional team:
You will have an ability to choose a custom or ready engine. Also, you will be able to calculate the expected load on the site and provide its stable work. However, you will have the opportunity for painless project’s expand and upgrade in the future.
By your own:
All troubleshooting will depend on you. It is worth to mention that some bugs can get out later, which means that you have a threat to get the finished website down, which entails a loss of audience.
By professional team:
Your project will host a full range of tests: from an elementary search of bugs to work at different loads. In the end, you get a guarantee of stable work, full-time support, and a calm heart.
However, the overall cost of which may run into several thousand dollars, somewhere between $15,000 and $25,000.
Like many above mentioned points, it would depend on various factors, such as how many features you want in it, which country you are developing it in, what is the extent of customization that you need in your store, how many products you want to sell (since it would finally define the server requirements), and so on.
Of course, if you are taking a specific development process, the above-mentioned items may be a little bit different. However, if you order a specialist’s job, then, depending on the project, the working process may be supervised by different models. In our company we use several approaches: fixed price, agile way and discovery phase. And yet again, we strongly recommend you to initially build such type of projects with highly qualified professionals, as investing in a complex project can greatly save your nerves and finances in the future.
Starting business, making money
Take a close look at your idea. There’s no need for a big team or offices early on. Most marketplace businesses only need two functions early on: people building product and people building the buyer and seller communities. Your job is to connect buyers with potential sellers. You know, in the beginning, nobody will use your website. So don’t get upset, be patient and try to list some items for sale yourself to make your website more activity. Recruit friends & family to use your website too. Order some SEO and marketing services.
If you don’t see signs of traction after six to nine months with a SaaS or e-commerce startup, you probably should reassess your market or model. However, this timetable is too accelerated for most marketplace businesses. Considering you need to establish both buyer and seller communities, you will need more time to prove out your business when building a two-sided marketplace.
Totally, it can take three years for a marketplace to get going. Network effects really start kicking in when there are enough products on the site. Thus, it encourages buyers to return and to look for products in other categories when sellers start listing more products. In this case the growth of sellers and buyers is quickly accelerating.
It can be difficult to keep telling your story every day without any external feedback from the industry. It is so difficult, but while you are creating new marketplace, you’ve got to believe in your idea even when no one else does. However, having faith doesn’t mean turning a blind eye to market reactions. You should continually be attentive for small signals that you’re on the right track. These include increased word of mouth from your early adopters, increased listings from sellers, increased repeat usage from buyers, and positive user feedback.
If you decided to run your own project like Etsy, you have to know that:
- Etsy’s business model is quite simple. It is based on shared success: product owners make money when Etsy sellers make money.
- If you will develop this project on your own – it will be much cheaper, but if you are not so good in programming – it is worth to collaborate with highly qualified specialists.
- Before any start, you have to provide a careful preparation. You need to develop a plan, the main idea, deadlines, priorities, etc. You will have to make your idea as clear as possible, examine the market, make a list of competitors, study them, see what kind of problems they are facing and try to understand whether you will be faced with something similar.
- There are several variables involved in breaking down the cost – Technology / Scalability / Framework, Timeline & Resources, Features & Viral / social elements
- Your job is to connect buyers with potential sellers. In the beginning, nobody will use your website. So don’t get upset, be patient and try to list some items for sale yourself to make your website more activity.