Etsy Launches Pilot Crowdfunding Program To Help Sellers Grow Their Businesses

crowdetsy

While Etsy has long been a marketplace where sellers could launch small businesses, the site has not had a Kickstarter-like crowdfunding platform for sellers to raise money to grow their businesses. Today, Etsy announced it is finally giving crowd-sourced funding a shot with the launch of a new pilot program.

“Fund on Etsy” aims to allow sellers to raise money directly on Etsy’s website to improve their businesses in various ways, from studio expansions to purchasing new tools to hiring a helping hand, the company said in an announcement of the two-month long pilot program on Tuesday.

“Fund on Etsy is a way to expand the Etsy Economy, where creative entrepreneurs find meaningful work and thoughtful consumers discover and buy unique goods while building relationships with the people who sell to them,” Joe Lallouz, product lead for Etsy’s Maker Innovation team, said in a blog post.

Much like Kickstarter, individuals who support a Fund on Etsy project won’t be charged until the funding goal is met. The crowdfunded products are expected to ship within six to nine months.

A limited group of the company’s one million sellers have been chosen to participate in the U.S.-only pilot program, which will run from June 16 to August 16.

CNBC reports that the Brooklyn-based company will employ the same approach with purchases made through the campaign by taking a 3.5% cut of each transaction plus a 20-cent posting fee.

Etsy says about 100 vendors have been working for the past two months to create funding campaigns – ranging from a few hundred dollars to $10,000 – to further their businesses’ success.

“Growth means different things to different people, and we believe Fund on Etsy will allow sellers to continue to grow on their own terms,” Lallouz said.

One example given by the company includes a seller who began selling modern housewares on the site after she was laid off as a designer. She plans to use the platform to raise $4,500 to develop and produce a new line of hand-marbled wooden plates.

In addition to helping sellers improve their operations, Etsy says the crowdfunding aspect of the site will allow buyers to feel more connected to their purchases.

“We believe that crowdfunding on Etsy is a natural way for sellers to forge even more resonant connections with their existing communities and customer bases and to grow in ways that may not have been possible before,” the company says. “By funding a campaign, buyers can participate in a new product’s journey from initial concept to their front door, while forging even more meaningful relationships with Etsy sellers they care about.”

Etsy says that following the pilot program it will look at buyer and seller feedback to determine whether or not crowdfunding should become a permanent platform for the company.

Etsy Launches Fund on Etsy Pilot Program to Crowdfund New Products [Etsy]
Etsy launches crowdfunding pilot program [CNBC]