Question

Does it make good strategic sense for VR to compete in all of its current segments? Which of its product lines do you think is/are most important to VR’s future growth and profitability? Should one or more of these current segments be discontinued? Why?

Answer 1

We get a better view on Etsy’s revenue generated by marketplace and seller services i.e. $132648 from $78544, and $136608 from $42817 in 2015, compared to 2013, respectively. The marketplace revenue is generated from listing and transaction fee, while shipping label fee and direct checkouts generate revenue from seller services. The listing fee that each craft artist on Etsy pays is $0.20 for each item sold and 3.5% for each full transaction. Etsy generates revenue by the traffic generated through mobile devices and the apps it created for buying and selling, making it easier for the sellers to sell and the buyers to look for and choose the product they want. Both Marketplace and Seller Services are important for Etsy’s future as they have the ability to increase the transaction fee on the items sold, using it for better marketing to attract buyers. Seller services although have a greater potential to generate revenue ( $61.4 Million in 2016, compared to $27.28 Million in 2015)(1.). Improving the seller services will be of equal benefit, as more sellers sell stuff, more revenue can be generated from shipment labels and direct checkouts. More the sellers choose Etsy as a platform to sell stuff, more profit it is for Etsy. Neither of the product lines should be discontinued in my opinion.

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