VOL. XCIV, NO. 247
★ WIDE MOAT STOCKS & COMPETITIVE ADVANTAGES ★
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Sunday, December 28, 2025
Etsy, Inc.
ETSY · New York Stock Exchange
Weighted average of segment moat scores, combining moat strength, durability, confidence, market structure, pricing power, and market share.
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Overview
Etsy operates two-sided online marketplaces connecting buyers and independent sellers, anchored by the Etsy marketplace for unique/creative goods and Depop in fashion resale. It earns marketplace revenue from transaction fees, payments processing, and listing fees, plus services revenue from optional seller services such as on-site advertising and shipping labels. The core moat is two-sided network effects at scale, supported by brand trust and sustained investment in trust and safety and search/discovery. Competition remains intense because sellers and buyers can multi-home and generalist platforms and social commerce can substitute for discovery.
Primary segment
Marketplace Platform (transaction fees + payments processing + listing fees)
Market structure
Competitive
Market share
—
HHI: —
Coverage
2 segments · 7 tags
Updated 2025-12-28
Segments
Marketplace Platform (transaction fees + payments processing + listing fees)
Specialty e-commerce marketplaces (handmade/unique goods and resale fashion)
Revenue
72%
Structure
Competitive
Pricing
moderate
Share
—
Peers
Seller Services (on-site advertising + shipping labels + other)
Integrated seller services sold within Etsy/Depop marketplaces (ads, shipping labels, other tools)
Revenue
28%
Structure
Quasi-Monopoly
Pricing
moderate
Share
—
Peers
Moat Claims
Marketplace Platform (transaction fees + payments processing + listing fees)
Specialty e-commerce marketplaces (handmade/unique goods and resale fashion)
Revenue share derived from FY2024 revenue disaggregation: marketplace revenue $2,020.744M of total $2,808.332M.
Two Sided Network
Network
Two Sided Network
Strength: 4/5 · Durability: durable · Confidence: 4/5 · 2 evidence
Two-sided marketplace with large buyer/seller base; more participants improve selection and conversion, reinforcing the flywheel.
Erosion risks
- Seller and buyer multi-homing across competing marketplaces
- Traffic acquisition cost inflation (search/social)
- Quality dilution from policy enforcement failures or counterfeit issues
Leading indicators
- Active buyers and active sellers trend
- GMS and take rate trend
- Repeat purchase rate / buyer retention
Counterarguments
- E-commerce marketplaces are highly competitive and switching/multi-homing is easy for many sellers
- Generalist platforms (Amazon, eBay) can subsidize categories and outspend on acquisition
Brand Trust
Demand
Brand Trust
Strength: 4/5 · Durability: durable · Confidence: 4/5 · 2 evidence
Brand positioned around unique/creative goods and buyer trust; sustained investment in trust and safety aims to protect marketplace integrity.
Erosion risks
- Counterfeit/fraud incidents that damage buyer trust
- Perceived loss of 'handmade' authenticity or category drift
- Regulatory pressure on marketplace liability and consumer protection
Leading indicators
- Dispute/refund and chargeback rates
- Buyer satisfaction/NPS proxies (repeat rate, reviews volume)
- Enforcement actions and transparency report metrics
Counterarguments
- Brand advantage can fade if product mix resembles generic imports
- New discovery channels (TikTok Shop, Temu) may reset buyer expectations on price and speed
Operational Excellence
Supply
Operational Excellence
Strength: 3/5 · Durability: medium · Confidence: 3/5 · 2 evidence
Continuous investment in search/discovery, payments, data/ML, and trust and safety improves conversion and marketplace quality.
Erosion risks
- Rising complexity and cost of trust and safety enforcement
- Platform outages, cybersecurity incidents, or degraded search relevance
- AI-driven discovery shifts to external platforms
Leading indicators
- Search conversion and buyer frequency metrics
- Site/app reliability and incident frequency
- Fraud/counterfeit detection effectiveness
Counterarguments
- Search/ads/ML capabilities are broadly available to large competitors
- Marketplaces can face diminishing returns from incremental algorithm improvements
Seller Services (on-site advertising + shipping labels + other)
Integrated seller services sold within Etsy/Depop marketplaces (ads, shipping labels, other tools)
Revenue share derived from FY2024 revenue disaggregation: services revenue $787.588M of total $2,808.332M.
Suite Bundling
Demand
Suite Bundling
Strength: 3/5 · Durability: medium · Confidence: 3/5 · 1 evidence
Seller services are natively bundled into the marketplace workflow (billing, listing management, and fulfillment tools), reducing friction vs external point solutions.
Erosion risks
- Sellers shift budgets to offsite ads or independent storefronts
- Regulatory limits on marketplace self-preferencing in ads/search
- Fee sensitivity from small businesses in weak macro environments
Leading indicators
- Services revenue as % of total revenue
- Ad take rate / ad adoption among sellers
- Shipping labels penetration in supported geographies
Counterarguments
- External tools (Google/Meta ads, Shopify apps) can substitute for some seller services
- Sellers can opt out of on-site ads and manage fulfillment independently
Data Workflow Lockin
Demand
Data Workflow Lockin
Strength: 3/5 · Durability: medium · Confidence: 3/5 · 2 evidence
On-site ads are embedded in Etsy's search/discovery environment; performance and optimization depend on Etsy's internal data and ranking systems.
Erosion risks
- Advertiser ROI deteriorates leading to lower spend
- Increased competition for ad inventory reduces efficiency
- Policy changes reduce targeting or measurement
Leading indicators
- Average price per click (CPC) and ad ROAS trends
- Seller ad adoption rate and churn
- Buyer conversion rate from search
Counterarguments
- Sellers can allocate budget to offsite channels with broader reach
- Ad products can be cyclical and sensitive to seller profitability
Scale Economies Unit Cost
Supply
Scale Economies Unit Cost
Strength: 3/5 · Durability: medium · Confidence: 4/5 · 1 evidence
Shipping labels can be offered at discounted rates due to aggregated purchase volume, improving seller value proposition.
Erosion risks
- Carrier pricing changes reduce discount advantage
- Sellers use third-party shipping solutions with better rates
- Geographic expansion constrained by local carrier integrations
Leading indicators
- Shipping labels penetration and net revenue contribution
- Carrier rate changes vs Etsy offered rates
- Seller satisfaction with fulfillment tools
Counterarguments
- Shipping is commoditized; large carriers and fulfillment platforms can match rates
- Discounts may not be defensible if competitors aggregate similar volumes
Evidence
Etsy operates two-sided online marketplaces that connect millions of passionate and creative buyers and sellers around the world.
Directly describes Etsy as a two-sided marketplace.
our marketplaces connected 8.1 million active sellers and 95.5 million active buyers
Scale of both sides supports network effects and liquidity.
Our primary Etsy marketplace is the global destination for unique, creative goods from independent sellers.
Supports differentiated positioning vs generalist e-commerce.
The trustworthiness of our marketplaces and the connections between people in our community are cornerstones of our business.
Explicitly frames trust as central to Etsy’s business.
Our engineering team has built a sophisticated platform that enables millions of sellers and buyers to smoothly transact across borders, languages, and devices.
Supports claim that platform operations are a core competence.
Showing 5 of 10 sources.
Risks & Indicators
Erosion risks
- Seller and buyer multi-homing across competing marketplaces
- Traffic acquisition cost inflation (search/social)
- Quality dilution from policy enforcement failures or counterfeit issues
- Counterfeit/fraud incidents that damage buyer trust
- Perceived loss of 'handmade' authenticity or category drift
- Regulatory pressure on marketplace liability and consumer protection
Leading indicators
- Active buyers and active sellers trend
- GMS and take rate trend
- Repeat purchase rate / buyer retention
- Share of unpaid traffic
- Dispute/refund and chargeback rates
- Buyer satisfaction/NPS proxies (repeat rate, reviews volume)
Curation & Accuracy
This directory blends AI‑assisted discovery with human curation. Entries are reviewed, edited, and organized with the goal of expanding coverage and sharpening quality over time. Your feedback helps steer improvements (because no single human can capture everything all at once).
Details change. Pricing, features, and availability may be incomplete or out of date. Treat listings as a starting point and verify on the provider’s site before making decisions. If you spot an error or a gap, send a quick note and I’ll adjust.