Financial reports can be a tedious read but they are an amazing source of meaningful information for top 1% sellers who need to know where the marketplace is headed. That's why our analytical team combed through all the data from Etsy's latest earnings call on July 27. 2022 to make the most valuable information as approachable and straightforward as possible.
Below you will find a breakdown of three key takeaways from Etsy's latest financial report that will help you plan better for the upcoming Holiday Season.
1. Etsy sales are slightly down from last year
The first thing we are always looking at in any single Etsy store is how much is the revenue compared to last year.
Etsy reports this quarterly and the combined revenue of all Etsy shops (so called Etsy GMS) for April, May and June (Q2) of 2022 is slightly below last year.
What does this mean for my shop?
We keep diving into this below but the number one takeaway is this: on average you can expect your Etsy revenue to be 7% down compared to last year.
If in the last quarter your shop was growing instead of going down, you are in a good place - keep developing in the same direction, you are getting ahead of your competition.
If you are down more than 7%, you may need to change something and look deeper into the causes for this decline. So keep on reading.
2. Decline starts from the pandemic-boosted categories
To make sense of Etsy's declining revenue, we need to dig further. The first reason Etsy sales are down is the post-pandemic reopening and the effect it has on particular product categories which gained a lot in the last 2 years.
The Home & Living category is the biggest loser with a double-digit decline, most probably in the range of 10-30%, followed by Craft Supplies, again in the same range.
What does this mean for my shop?
If you are in one of the pandemic-boosted categories, you might be experiencing a drop in revenue in recent months.
Now that everything is reopening, it's very important to readjust your business plans to factor in the expected decline. Sometimes this might mean reducing inventory levels or cutting production costs.
On the contrary, for growth-minded businesses, this can mean moving faster and ramping up marketing efforts to take advantage of the new situation.
In periods of decline many shop owners remain passive and "wait for it to pass". This can open up a window of opportunity for you to take a bigger share of the market.
If you are confident in your product, now is the time to give your shop your best marketing efforts. Step up your SEO activities, spend more time on visual appearance and branding and even increase your Etsy Ads budget.
3. Etsy just had the least new buyers in the last 2 years
The second reason Etsy sales are down is that the number of new buyers on the marketplace has declined in the last quarter.
At 6.4 Million new buyers, this is the lowest level for the past 2 years. This basically means that less new people are discovering Etsy these days and you are getting less fresh eyes on your products.
What does this mean for my shop?
Two main takeaways here. First, make sure to add new products to your store for the upcoming Holiday Season. Right now regular buyers increase in importance and you want to offer them new items and new opportunities to shop with you.
Second, make sure to connect with people who already bought at your store and aim to bring them back. Regular email marketing campaigns for your Etsy customers will play a huge role in Holiday Season 2022.
The Big Picture
Etsy is slightly down this year and by now this should be clear for everyone. But it's actually very close to its best quarter ever so we are all in a very good place. Just make sure you don't take growth for granted and give maximum effort to make the most from the current market situation.
As of right now Etsy is the 7th most downloaded shopping app in the US, beating Target, Ebay and Best Buy among many others. Also the amount of search engine and quality-of-life improvements the Etsy product team is introducing is at an all-time high and we will take a look at many of these in the future.
Despite the small post-pandemic drop, Etsy is doing very well and as we move into Holiday Season 2022, the strongest period all-year round, there will be huge growth opportunities.
The main goal right now is to pay special attention to your marketing. Attract and engage your audience in the right way to stay ahead of the competition and you will be able to take your shop to the next level by the end of the year.
To take a look at the full Etsy Q2 2022 presentation click here.
To see the whole Etsy Earnings Call video click here.
