Dec 272010
Image representing Etsy as depicted in CrunchBase
Image via CrunchBase

In technology circles, people talk about the merits of eating your own dog food — making sure your company is actually using the same products or services it is selling.

Etsy, an independent online marketplace for handmade products and vintage goods, is getting its fair share of dog food.

Most everything in the company’s sprawling offices in the Dumbo neighborhood of Brooklyn is from sellers on, from the long panels of gingham curtains covering the windows to the mismatched desks and work tables. An elaborate chandelier and a pair of six-foot-long wooden eyeglasses rest in the middle of one room; a rowboat is perched in the opposite corner.

Since it was founded in 2005 as a way for hobbyists and crafty types to sell their goods, Etsy has blossomed into a thriving e-commerce site and one of New York’s hottest start-ups. The company says it expects to bring in $30 million to $50 million in revenue this year and has been profitable for a year. It has seven million registered users, nearly twice what it had a year ago.

Robert Kalin, the co-founder and chief executive of Etsy, said the site was catching on because many people now want their buying habits to reflect their values, as indicated by the surging interest in farmers’ markets and local clothing designers.

“It’s not just ‘you are what you eat’ anymore,” he said. “You are what you buy, and these things define you.”

Mr. Kalin, 30, and his partners Chris Maguire and Haim Schoppik started Etsy in Mr. Kalin’s Brooklyn apartment after he was unable to find a good place online to sell his fully functional “inside-out computers,” which are encased in oak and covered with a transparent orange lid so the machine’s guts are visible.

Even now, Mr. Kalin is one of the site’s most prolific patrons, regularly snapping up items like custom three-piece suits, intricately woven wall tapestries and ceramic sculptures of doves.

Etsy says it is on track to handle close to $400 million in transactions this year, more than double last year’s figure. That pales in comparison to eBay, still the king of person-to-person online sales. Analysts say eBay could process as much as $15 billion in sales this year, excluding cars.

But eBay, which came to prominence in the dot-com boom, has gone from resembling an overflowing garage sale to being something closer to Wal-Mart in the eyes of many shoppers. It has struggled to reinvigorate its marketplace and alienated many of the smaller sellers that were once its lifeblood.

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