[2] The site follows in the tradition of open craft fairs, giving sellers personal storefronts where they list their goods for a fee of US$0.20 per item.

[9] On the Etsy homepage, potential buyers can type a "product description" into the search bar,[10] or they can "browse" through a list of options, which includes Art, Home & Living, Jewelry, Women, Men, Kids, Vintage, Weddings, Craft Supplies, Trending Items, Gift Ideas, Mobile Accessories, and more.

[14] Etsy is popular as a side-business,[15] as well as a place to buy goods made from recycled and upcycled materials,[16] along with less expensive or more unusual versions of mass-produced items.

[27] According to artists who have developed their Etsy stores into their primary jobs, scaling up production of handmade items can require more than full-time work,[28] especially during the holiday shopping season.

Etsy Labs has a workspace that provides equipment and donated materials, where members gather to make items, take and teach workshops, and attend special events.

The store features over 50 local makers & small businesses and an eco refill station, selling packaging free groceries including dry foods, toiletries, and cleaning products.

[41] Investors include Sean Meenan,[42] Albert Wenger, Spencer and Judson Ain, Union Square Ventures, and founders of Flickr and Delicious.

"[44][45] In Etsy's first year, it attracted attention for frequently adding new tools and functionality to the site to help sellers gain exposure and traffic, including Adobe Flash-based visualizations and a taxonomy of categories with tags.

[48] In January 2008, Etsy received an additional $27 million in funding from Union Square Ventures, Hubert Burda Media, and Jim Breyer.

[49] In February 2008, trouble at eBay, including a strike by some dissatisfied sellers, brought speculation that Etsy could be an increasing competitor.

[51] At the time, a comparison of the two websites included complaints that on Etsy, items are difficult to find, the interface "feels slow", and the buying and selling process is United States-centric.

[56] Some longtime Etsy employees left the company in August 2008, including founders Haim Schoppik and Chris Maguire.

[60] As of May 2009, it had approximately 60 employees and sales of $10 to 13 million per month,[61] possibly boosted by consumer interest in cheaper and more personalized goods due to the United States recession.

[64] In December 2010, Etsy said it had seven million registered users, and that it would continue to focus on a personal community feel as it grows larger, as that is part of what distinguishes it from eBay.

[65] In March 2011, Etsy "introduced a Facebook-style social networking system called People Search...to help buyers and sellers connect with each other and become friends".

[76] In June 2014, Etsy purchased A Little Market, a French e-commerce site for handmade goods, foods, and wine, for a mix of cash and stock valued at less than $100 million.

The suit also claimed that Etsy management knew of the rampant trademark and copyright infringement but did little to stop it, and in fact worked to hide this information from potential investors.

[84] In November 2016, Etsy disclosed that it paid US$32.5 million to purchase Blackbird Technologies, a startup that developed AI software used for shopping context/search applications.

In May 2017, Board member Josh Silverman was appointed CEO over Chad Dickerson,[87] citing pressure from shareholders and poor profits.

Davidson Tom Forte stated the pandemic gave customers incentive to return to the website multiple times, rather than the usual occasional purchase of a unique product.

[91][92] On June 2, 2021, Etsy announced that it had agreed to acquire shopping app Depop, the global fashion resell marketplace for $1.63 billion.

Etsy also reported it would invest $25 million to cover the refunds for cases where the seller is not at fault for item damage or loss.

Etsy has also supported innovative projects such as the Meridian Magnesium SF6 Reduction in the automotive sector, which reduces the use of SF6, a greenhouse gas 22,800 times more potent than CO2.

ArtYah, based in California, United States brought together sellers and consumers of handmade items, vintage and some craft supplies [113] prior to closing in December, 2019.

Asked about competitors, Etsy's European CEO said, "As far as I am concerned, the more people highlighting the value of supporting micro-producers and buying handmade and vintage directly from them, the better.

Users of the service raised concerns over the feature's violation of privacy rights, but an official response was not released by the company.

[115] On October 1, 2013, Etsy changed its policy to allow sellers to outsource production to third parties and factories and to use shipping or fulfillment services.

[116] The new rules allow products to be labeled "handmade" as long as the original idea for that item—or its "authorship", as the then CEO, Dickerson, said—comes from its respective seller.

[123][124][125] On 10 March 2022, due to banking sanctions, Etsy blocked accounts of all Russian customers including those living abroad and delisted all their goods, with the message of "Expanding business restrictions in the sellers' region".

Rocio Concha, director of policy and advocacy said, "Our research shows some Etsy sellers are brazenly ripping off customers by making misleading claims about their products".