Etsy made room for the unusual.

In April 2005, Rob Kalin sat in an orange chair in Brooklyn, facing an open window. He began sketching an idea. Working with Chris Maguire, Haim Schoppik and Jared Tarbell, he put Etsy online in roughly two months. The opening scene is almost suspiciously appropriate: a company for people who make things, beginning with somebody making something.

The useful detail is the speed. Etsy did not begin by owning factories, filling warehouses or negotiating a national chain of shops. It built a place where independent sellers could meet buyers. A maker could put a photograph, a description and a price in front of strangers. The internet supplied the distance; the seller supplied the reason to care.

The trouble with a very particular present

Consider the difference between buying a replacement charging cable and buying a present for someone who is impossible to shop for. With the cable, sameness helps. With the present, sameness can be the problem. Etsy operates in that second territory: jewelry, homewares, clothing, vintage finds, craft supplies and digital designs, often with room for personalization.

For buyers, the attraction is specificity. For sellers, it is access to people already looking for something beyond the ordinary retail assortment. At the end of 2025, the Etsy marketplace counted 86.5 million active buyers and 5.6 million active sellers. Those are marketplace figures; treating every customer of its former subsidiaries as an Etsy shopper would inflate the picture.

An independent shop can offer the same intimacy, but it must attract its own visitors. Broad marketplaces such as eBay and Amazon offer other routes to customers. Etsy’s position rests on assembling creative inventory and an audience inclined to value it. Its advantage depends on preserving that relationship as the shelves get more crowded.

Twenty cents gets you on the shelf

The entry price is small enough to invite an experiment: $0.20 for a listing, generally lasting four months or until it sells. The bill grows when an order arrives. Etsy charges a 6.5% transaction fee, including shipping charges, plus payment processing. For a U.S. bank account, processing is normally 3% plus $0.25.

On a simple $50 U.S. order, with no shipping charge or tax, those three fees total $5.20. That leaves $44.80 before materials, labor, packaging and other expenses. Advertising can add more. A shop setup fee may apply, and processing costs vary by country. The arithmetic matters more than the inviting price of admission.

Etsy also sells advertising and shipping labels, and provides payments, shop management and seller tools. A small producer gets commercial infrastructure without building each component. The practical move is to test a tightly defined offer, photograph it clearly and price the whole order. Being able to make an object and being able to make money selling it are separate skills.

Who gets to call it creative?

The difficulty appeared in the bargain itself. Sellers wanted access to customers, but disagreed about the price of that access. In April 2022, Etsy raised its transaction fee from 5% to 6.5%. Some sellers closed their shops temporarily in protest. Etsy said the strike had no material sales impact; that measured the immediate commercial effect, leaving the disagreement over value unresolved.

Another pressure concerns what belongs on the shelves. Etsy’s Creativity Standards distinguish goods made, designed, handpicked or sourced by a seller. Vintage items must be at least 20 years old. Original designs can be manufactured by disclosed production partners. Seller-prompted AI creations are allowed with disclosure. “Handmade” alone no longer explains the entire assortment.

These distinctions do commercial work. A buyer needs to understand what the seller contributed. A craftsperson needs confidence that a competitor is following the rules. In its 2024 transparency report, Etsy said it removed 22% more listings for Creativity Standards and Handmade Policy violations than the previous year. Maintaining difference requires enforcement, with all the awkward judgments that brings.

An unusual object is commercially invisible until somebody can find it.THE DISCOVERY PROBLEM

The machine needs better manners

Etsy’s mission is “Keep Commerce Human.” Yet its expertise includes search ranking, recommendations and payment systems. That combination makes sense: an unusual object is commercially invisible until somebody can find it. A system built around standardized product names can struggle when a buyer has an occasion, a mood and a budget instead of a model number.

In September 2025, Etsy partnered with OpenAI to let U.S. shoppers discover and buy items through ChatGPT. The revealing part came afterward. Etsy reported that shoppers often preferred to visit Etsy to learn more before purchasing. In May 2026, it launched a beta app inside ChatGPT for conversational searching and comparison, alongside tests of conversational gift search on Etsy itself.

The lesson is modest and useful: observe where people actually need help. A new checkout channel does not automatically replace the wish to inspect a listing or understand a seller. Etsy adapted the experiment around discovery. For anyone building a marketplace, that is a reason to watch the journey between curiosity and purchase, rather than count the number of places a checkout button appears.

Back to one marketplace

Etsy also reconsidered how many businesses it wanted to run. It bought fashion resale marketplace Depop in 2021 for approximately $1.625 billion. In July 2026, it completed Depop’s sale to eBay for approximately $1.4 billion, including purchase-price adjustments and interest. Those headline sums do not establish the full investment return. They do show the scale of a costly expansion and subsequent change of direction.

The company described the sale as enabling exclusive focus on the Etsy marketplace. There were encouraging operating numbers before that transaction closed: second-quarter 2026 gross merchandise sales were about $2.6 billion, up 7.5% against Etsy marketplace sales a year earlier. Revenue was $668 million. Merchandise sales measure what buyers spend; revenue measures what the company earns. Confusing them makes a platform look like a retailer.

For a seller, the fit remains conditional. Generic resale inventory may fail Etsy’s rules; thin margins can disappear under fees; custom work must support its own production time. For a buyer, delivery dates, materials and the seller’s role deserve attention. Etsy works when specificity is valuable enough to pay for. The challenge is getting a very particular thing in front of the person who will recognize it.