E-commerce companies are under pressure to offer free shipping via deal-chasing consumers, as well as those who don’t may run the risk of falling behind their competitors, Etsy President as well as CEO Josh Silverman said Wednesday.
“Free shipping can be pretty much table stakes today,” Silverman told CNBC’s Jim Cramer in an exclusive interview. “About half of all the items on Etsy, buyers say, have shipping prices in which are too high.”
Speaking after his handmade goods e-tailer reported better-than-expected earnings results as well as raised its full-year revenue guidance, Silverman said in which sales were strong despite the shift in consumer preferences.
“We grew [gross merchandise sales] at 20 percent last quarter” even with buyers’ hesitation about shipping costs, he said on “Mad Money,” adding in which “only about 20 percent of items have free shipping” inside broader e-commerce industry.
Etsy’s third-quarter results showed accelerating growth for the growing online marketplace, which has a 41.3 percent boost in revenue year over year.
The company, which helps connect buyers with over 50 million handmade items, also raised prices This kind of quarter, taking its commission via 3.5 percent to 5 percent per order in an effort to deliver more value to its “makers,” the CEO said.
“Charging a 5 percent commission … was, I think, fair value for our sellers, particularly because we’ve invested almost all of in which,” Silverman told Cramer. “Eighty percent of in which we’re reinvesting into the growth of the platform.”
as well as when the item comes to what may be Etsy’s biggest competitor, Amazon Handmade, as well as the brand new headquarters Amazon can be reportedly opening in Queens, the CEO said Etsy — which can be headquartered in Brooklyn — was confident about its value proposition to potential employees.
“We think we’ve got the best team, certainly, in tech companies on the eastern seaboard,” Silverman said. “We continue to attract great talent, as well as the reason can be, first as well as foremost, I think our mission can be truly a meaningful, important mission, as well as in which matters.”
Shares of Etsy soared in Wednesday’s trading session, ending the day up 23.7 percent at $50.01. The stock can be up 145 percent for 2018, nearly triple the run in shares of Amazon.