Etsy Inc. debuted early details for a paid Insider membership program that it plans to debut in September. The online marketplace has faced revenue headwinds recently and will use Etsy Insider to try to strengthen customer loyalty.

To incentivize signups, Etsy Insider will offer a variety of perks. They range from free shipping and special offers to donation boosts.

Etsy is No. 20 in the Global Online Marketplaces Database. The database is Digital Commerce 360’s ranking of the 100 largest such marketplaces by third-party gross merchandise value (GMV). Etsy’s musical instrument marketplace Reverb is No. 45 and used-clothing marketplace Depop is No. 54. Digital Commerce 360 projects that Etsy’s total GMV will reach $753.7 billion in 2024.

Etsy total GMV by year

What is the Etsy Insider paid membership program?

“In mid-September, we’ll launch a closed-beta version of Etsy Insider to select buyers in the United States,” wrote Simona Shakin, vice president of product and retention marketing at Etsy, in a company blog post on July 31.

Etsy did not specify how much membership fees for the program would be, but Shakin listed the benefits that members would receive as follows:

• Free U.S. domestic shipping on millions of items
• A birthday bonus
• Limited edition annual gift, designed by an Etsy seller
• First access to special discounts and select merchandise
• Double impact with Donate the Change

Donate the Change is an Etsy program that gives shoppers the option to round up order totals to donate to its Uplift Fund for promoting entrepreneurship.

“While Etsy Insider’s benefits deliver great value for buyers, the program comes at no cost to the Etsy seller community,” Shakin explained. “Benefits, including the free shipping, will be funded by Etsy and through the membership fee.”

Why Etsy is launching a paid membership program

Etsy CEO Josh Silverman said when addressing the company’s fiscal first-quarter earnings in 2024 that it was confronting a “challenging environment for consumer discretionary product.” That environment was reflected in a 3.5% year-over-year decline in gross merchandise sales during the quarter, which ended March 31. In addition, Etsy faces fresh competition from rivals such as Michaels, which launched its own MakerPlace marketplace in 2023.

“We’re confident Etsy Insider will make it easier and more joyful than ever for buyers to seamlessly discover pieces they will love from real people they’re proud to support,” Shakin said in her blog post.

Still, as a pure marketplace where all goods are sold by third parties — unlike hybrid marketplaces such as Amazon.com and Walmart Marketplace — Etsy lacks centralized fulfillment, making Etsy Insider an atypical program example among online marketplaces broadly, according to James Risley, research data manager and senior analyst at Digital Commerce 360.

27.8% of Top 1000 retailers have a free loyalty program, while 5.9% have a paid membership, Digital Commerce 360 analysis shows. The Top 1000 Database is Digital Commerce 360’s ranking of North America’s largest online retailers by annual web sales.

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