Etsy 2015 Annual Report Download - page 23

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launch of Etsy Manufacturing, a marketplace to help Etsy sellers find and connect directly with manufacturers to form responsible partnerships.
Additionally, in August 2014, we added traditional retailers to our ecosystem with the launch of our Wholesale offering, which allows Etsy sellers to sell their
products to retailers on our platform.
Our efforts to expand our ecosystem could fail for many reasons, including lack of acceptance of our offerings by existing or new members of our community,
our failure to market our offerings effectively, defects or errors in our new offerings or negative publicity about us or our new offerings.
Diversifying our offerings, expanding our ecosystem and growing the Etsy Economy involve significant risk. For example, our initiatives may not drive
increases in revenue, may require substantial investment and planning, and may bring us more directly into competition with companies that are better
established or have greater resources than we do. We may be required to invest additional time and resources in the development and training of our existing
community, particularly our employees who will help implement our expansion efforts. If we are unable to cost-effectively expand our ecosystem, then our
growth prospects and competitive position may be harmed.
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Our industry is characterized by rapidly changing technology, new service and product introductions and changing customer demands. We spend substantial
time and resources understanding the needs of Etsy sellers and Etsy buyers and responding to them. For example, we enhance our Seller Services, search and
discovery functionality and the member experience on a regular basis. We also focus on providing additional Seller Services and tools to help Etsy sellers
manage and scale their businesses. For example, in 2015, we introduced calculated shipping, which helps automate the most time-consuming aspects of
determining shipping costs for Etsy sellers. In addition, we enhanced Direct Checkout by integrating PayPal payments, which enables Etsy sellers to accept
PayPal on our platform and reach more Etsy buyers. Offering high-impact Seller Services is one of our key strategies.
Etsy sellers and Etsy buyers may not be satisfied with our enhancements or new offerings or may perceive that these offerings do not respond to their needs.
In addition, developing new services and features is complex, and the timetable for commercial release is difficult to predict and may vary from our historical
experience. As a result, the introduction of new offerings may occur after anticipated release dates or they may be introduced as pilot programs, which may
not be continued for various reasons. Our new offerings also may bring us more directly into competition with companies that are better established or have
greater resources than we do.
If we do not continue to cost-effectively develop new offerings that satisfy Etsy sellers and Etsy buyers, then our competitive position and growth prospects
may be harmed. In addition, new offerings may have lower margins than existing offerings and our revenue from the new offerings may not be enough to
offset the cost of developing them.
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Making Etsy an everyday experience is one of our key strategies and starts with mobile. Visits and purchases made on mobile devices by consumers,
including Etsy buyers, have increased significantly in recent years. The smaller screen size and reduced functionality associated with some mobile devices
may make the use of our platform more difficult or less appealing. Visits to our marketplace on mobile devices may not convert into purchases as often as
visits made through personal computers, which could result in less revenue for us. Etsy sellers are also increasingly using mobile devices to operate their
businesses on our platform. If we are not able to deliver a rewarding experience on mobile devices, Etsy sellers’ ability to manage and grow their businesses
may be harmed and, consequently, our business may suffer. Further, although we strive to provide engaging mobile experiences for both Etsy sellers and Etsy
buyers who visit our mobile website using a browser on their mobile device, we depend on Etsy sellers and Etsy buyers downloading our mobile apps to
provide them the optimal mobile experience.
As new mobile devices and mobile platforms are released, we may encounter problems in developing or supporting apps for them. In addition, supporting
new devices and mobile device operating systems may require substantial time and resources.
The success of our mobile apps could also be harmed by factors outside our control, such as:
• actions taken by providers of mobile operating systems or mobile app download stores;
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