Etsy is expecting this year's high-stakes online shopping season to level the playing field with major retailers like Amazon who may get caught in a logistics nightmare (ETSY)
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As the holiday shopping season kicks into gear, Etsy is expecting to have some key advantages over bigger retailers: smaller quantities, no factories, and no fulfillment centers. During Etsy's third-quarter earnings call on Wednesday, CEO Josh Silverman described the advantages Etsy is expecting this year in an otherwise crowded ecommerce marketplace. Despite the coronavirus pandemic, the company has already experienced massive growth in 2020, with revenue more than doubling since the third quarter of 2019 to $451.5 million. Etsy's growth was largely driven by face masks — the company said it sold 24 million masks in the third quarter alone. Now, as we head into the holiday season, Etsy is anticipating its business model of a marketplace made up of individual sellers to help it become a shopping destination and avoid the logistics nightmare other major retailers are facing. The pandemic has forced more shopping to take place online than ever before, and it's leading to third-party impacts on the retail industry, particularly when it comes to shipping. Ahead of Amazon's Prime Day shopping event earlier this month, for example, Moody's estimated that the company's fourth-quarter shipping costs could reach nearly $20 billion as it attempted to keep up with both Prime Day demand and a longer holiday shopping season. And while companies like Amazon may be willing to increase their shipping spending, there may not be enough shipping capacity to do so. According to a recent Wall Street Journal report, major shipping companies like FedEx and UPS have been advising retailers that they are nearly or entirely out of capacity in advance of the holidays, while smaller firms like DHL and LaserShip are already booked until 2021. The United States Postal Service is stretched thin on multiple fronts as it accepts a high volume of mail-in ballots. The result could mean widespread shipping delays, which industry experts are already referring to as "shipageddon." On top of shipping challenges, retailers may order a lower volume of inventory to avoid extra products on the shelves when the holidays are over, resulting in fewer deals for shoppers. But Silverman said Etsy is "leaning in" to the ecommerce boon ahead of the holidays. "A lot of ecommerce sites are nervous about Cyber Week, because their ability to fulfill large quantities in a short amount of time is constrained," Silverman said. "Our sellers are businesses, largely of one, working from their home and they are not as constrained in terms of having a supply chain dependent on a few factories, or having everything shipped through one or two fulfillment centers." Silverman said Etsy's sellers can "meet the buyers where they are" during times when "other people are meeting constraints." Etsy Chief Financial Officer Rachel Glaser said on the call that Etsy expects this holiday shopping season will put major retailers in the same boat as Etsy, which was already known for having longer shipping times — most Etsy sellers use the lowest-cost flat-rate shipping, and Etsy items are often customized or personalized, or made-to-order. Glaser said that Etsy customers are "conditioned to order early" and that its shopping season typically ends earlier than traditional retailers because last-minute gift buying is more difficult on the platform. "In this case, if the shipping speed is lower for all, it sort of levels the playing field for all," Glaser said. "I think that across the board in ecommerce, we're all going to have the same sort of, 'Order by December 15, order by December 18 if you want to get it in time for holiday.' Not just Etsy in this case."SEE ALSO: Don't wait to start your holiday shopping: experts are expecting shipping delays, low inventory, and fewer last-minute deals Join the conversation about this story » NOW WATCH: Why thoroughbred horse semen is the world's most expensive liquid
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How Etsy Prepared for Historic Volumes of Holiday Traffic in 2020 Site traffic leapt up in...How Etsy Prepared for Historic Volumes of Holiday Traffic in 2020 Site traffic leapt up in the second quarter, when lockdowns went into widespread effect, by an amount it normally would have taken several years to achieve. For context about Etsy, as of 2020 Q4 they had 81 million active buyers and over 85 million items for sale.
2020's holiday shipping deadlines are coming up fast — December 11 is the cutoff for standard shipping at most stores
Summary List Placement Choosing the perfect gift for everyone on your list is only half...Summary List Placement Choosing the perfect gift for everyone on your list is only half of the struggle; making sure it arrives on time is the real challenge. December 11 is the deadline for most retailers' standard shipping and December 15 for most shipping services' ground shipping. If you're looking for other options, consider buying online and picking up in-store. Check out all...
Summary List Placement Free shipping is a valuable feature offered by many retailers during the...Summary List Placement Free shipping is a valuable feature offered by many retailers during the holiday season, especially when it's without minimum order requirements. In past years, many big-box retailers turned up to drop the minimum order thresholds, but this year free shipping is mostly limited to membership services, like Amazon Prime and Walmart Plus. Other retailers offering free shipping with no minimum...