TEE #046 Etsy Adds Activist Investor to Board - What This Means For SellersFeb 03, 2024
Read time: 2 mins
Etsy has been making some big changes lately after coming under pressure from activist investor Elliott Management Corporation. This week, Etsy announced it is adding Jesse Cohn, a senior executive from Elliott, to its board of directors. This is a key concession after Elliott urged Etsy to improve its lagging growth rates.
For Etsy shop owners and sellers, this board appointment could foreshadow additional changes intended to ramp up Etsy's user and sales growth. Some potential impacts include:
Increased Focus on Shareholder Value: With an activist investor now on its board, Etsy is likely to zero in on cost-cutting measures and initiatives that directly boost profits and share price. Sellers may see tweaks to Etsy's revenue model, fee structure, and tools to increase sales velocity.
More Accountability for Growth: Elliott's involvement signals that Etsy needs to focus fiercely on reigniting market share gains and gross merchandise sales (GMS) growth. We could see more advertising, buyer incentives, and seller support programs aimed at jumpstarting the pace of activity across Etsy's global sales platform.
Possible Shift in Corporate Strategy: Elliott believes Etsy has strayed from its original focus as a handmade, artisanal marketplace. The company may reevaluate its 2015 strategy to allow manufactured and mass-produced goods. If returns to its roots, policies around items permitted for sale may tighten up.
As an activist shareholder with $1.4 billion invested in Etsy, Elliott has real influence to demand operational changes if growth continues to lag. Sellers should watch for signals from Etsy's management team about new initiatives in coming months intended to boost engagement, activity, and sales across the site. Of course, the ultimate goal will be benefiting shareholders, but properly executed changes could trickle down to benefit shop owners as well.
The key for sellers is continuing to focus on your own business fundamentals - product quality, customer experience, marketing and sales - while being adaptable to shifts in Etsy's strategy and policies. Savvy Etsy entrepreneurs who roll with the changes ultimately stand to gain more sales with a faster-growing marketplace.
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