Etsy – P2P Commerce with Tagging

A relatively new company called Etsy has recently captured my attention. Etsy is a P2P ecommerce company (like ebay) that currently limits sales to handmade items. It’s smart to focus on a niche to iron things out…and Etsy could easily expand into other categories as well.

Etsy does lots of things like ebay – They charge sellers a listing fee and final sale percentage (although at $.10 and 3.5% they are way below what ebay charges), there is an ebay-like feedback system (side note: there is a huge market waiting out there if someone would create an independent third party feedback system with open data and APIs), and they have integrated paypal as a payment option.

Unlike ebay, Etsy has architected the buyer experience from the ground up using web 2.0 priciples.


First, Etsy has a very flat taxonomy – top level categories such as Bags & Purses, Toys, etc. Everything underneath these top level tags is based on seller tagging. For instance, look at the “Bags & Purses” category and note the tags (called subcategories) on the right hand side. Click on anyone of these and you go deeper into the taxonomy…although really it is a folksonomy. Further refine items by clicking on additional tags, or on a different set of tags based on materials used to produce the product. The benefit of this folksonomy is that it is user generated and based on popularity. If a new item gets hot fast, the folksonomy will take that into account. It’s a beautiful use of tags and the first launched product I’ve seen that does this.


Etsy also does some amazing things with flash – the geolocator on the home page is a great way to find sellers by location. You can also use their “shop by color” widget…less useful but an interesting feature. Finally, they have a time machine feature, although I can’t figure out what it does.

Nice product. It looks like more features are coming, too. Check out their blog.