Etsy.com Relies on Word of Mouth to Market Handmade Goods

Shoppers tired of the same old, same old at big box retailers might want to take a look at Etsy.com, an electronic marketplace for small artists and craftspersons.

The Brooklyn, NY-based online business has grown to over 240,000 customers and 42,000 sellers since it began in June 2005, primarily through word of mouth and event marketing.

Customers are mostly women in their 20s and 30s. Esty—which lists products ranging from handicrafts to furniture to paintings and other art work, "anything made by human hands" -- hopes to have a million customers by this time next year, says Matthew Stinchcomb, vice president of marketing.

Etsy charges sellers 20 cents to list an item regardless of its price and takes a 3.5% commission on each completed sale. Links to individual artist sites are also featured.

The company markets itself primarily through word of mouth, regional arts and crafts fairs and "street teams," Stinchcomb says.

"We'll go out to craft fairs, art shows and music festivals -- anywhere there's a lot of our sellers already selling," he says. Etsy helps promote its regional events by doing things like placing quarter page ads in weekly newspapers in cities hosting festivals.

The company is also beginning to organize events itself, but isn't planning on doing any online advertising. Going forward, Etsy will continue with festival appearances and is thinking of launching a tour of college campuses. "Initially, we'll go as far north as Boston and as far south as Washington, DC, " he says.