During the early days of the pandemic, Etsy 's (NASDAQ: ETSY) growth soared. The platform brings together buyers and sellers of handmade items, and shoppers have flocked to it for everything from jewelry to face masks.
But, like other retailers and e-commerce companies, Etsy has been unable to escape the headwinds of high inflation, rising interest rates, and other economic woes. In the fourth quarter, its gross merchandise sales and net income fell. Shares of Etsy also have been on the decline over the past year. So is it time to sell this e-commerce stock? Not necessarily. One thing in particular could make Etsy a long-term winner.
It all has to do with Etsy's business model. The company doesn't operate warehouses where it stocks products to ship out to shoppers. Instead, it offers an online selling platform to small business owners -- and these small businesses take care of the storage and transport of their items to customers. Etsy generates revenue through its services to these businesses. For example, it charges a 6.5% fee on transactions made via its marketplace.
For further details see:
This 1 Thing Could Make Etsy -- and Its Investors -- Long-Term Winners