It’s mid-October and Halloween preparations are now in full swing! This year’s costume theme is “The Very Hungry Caterpillar”, the timeless children’s book by Eric Carle. Now that I have two kids, coordinating costumes is a must-do. And since I was feeling particularly ambitious, I’ve decided to DIY it. Which means, instead of browsing on Amazon and countless other online stores, I’ve been spending a hefty amount of time on Esty, hunting for the perfect handmade caterpillar hat.
I’ve been an Etsy user as a buyer for several years now, but I’ve never really thought about my purchases from Etsy’s point of view. It’s always been: add to cart, checkout, make payment, receive confirmation, and get package in mail. Technically, Etsy isn’t a merchant; they just provide a platform for individual sellers to reach buyers looking for specific items, much like eBay and Amazon Marketplace. Therefore, they do not hold inventory, but use sellers as part of their fulfillment and distribution.
The fulfillment process could look something like this:
- Purchase order is created once customer clicks “submit order” after filling out the online purchase form.
- Etsy generates a sales order and sends a notice to the seller: (Image source)
Seller’s notification from a purchase order - Customer payment is posted the next business day, Etsy then pay the seller.
- Seller packs the item with a packing slip, prints a shipping label provided by Etsy, and ships the package within the specified time frame.
Within their ERP system, it’s apparent that financial documents are being generated, but I think material documents also exist, even though they don’t handle inventory. Each seller and customer is required to open an account and past purchased items are tracked and viewable on the accounts. It would be an easy ways for Etsy to gather lots of data of the types of items sold, what is popular, and how much of a particular item sells. I think this is also a reason why they started Etsy Manufacturing and Etsy Wholesale the aim of helping individual sellers build their production capabilities and connect to large retailers.
Hopefully more about this on a future blog post!