From their S-1 [MY COMMENTS IN CAPS]:
"We operate a platform for third-party sellers. Our business model is based on shared success [LOL, FIRST TIME I'VE HEARD THIS ONE]: we make money when Etsy sellers make money, and we offer services to help Etsy sellers be more successful. [MAKES YOU FEEL GOOD, DOESN'T IT?] We do not compete with Etsy sellers, hold inventory or sell goods. [NO, WE ARE SIMPLE MIDDLEMEN] Our revenue is diversified, generated from a mix of marketplace activities and the services we provide Etsy sellers to help them create and grow [BUT NOT OUTGROW ETSY!] their businesses.
Our revenue consists of Marketplace revenue, Seller Services revenue and Other revenue. Our revenue is recorded net of actual and expected refunds [WONDER HOW MANY FRAUDULENT SELLERS ARE ON THERE?].
- Marketplace revenue includes the fee an Etsy seller pays for each completed transaction [SALES COMMISSION] and the listing fee an Etsy seller pays for each item she [HE] lists.
- Seller Services revenue includes fees an Etsy seller pays for services such as prominent placement in search results via Promoted Listings, payment processing [THE BIGGIE] via Direct Checkout and purchases of shipping labels [IS THIS A MATERIAL AMOUNT?] through our platform via Shipping Labels.
- Other revenue includes the fees we receive from a third-party payment processor [PAYPAL? CAN'T NAME NAMES].
Marketplace revenue. Marketplace revenue consists of the 3.5% fee that an Etsy seller pays for each completed transaction [BAM!] on our platform, exclusive of shipping fees charged. Marketplace revenue also consists of a listing fee of $0.20 per item that she [HE] lists in our marketplace. Although revenue from completed Wholesale transactions is included in Marketplace revenue, revenue from Wholesale enrollment is included in Seller Services revenue. [ODD?] Transaction fees are recognized when the corresponding transaction is made. Listing fees are recognized ratably over a four-month listing period, unless the item is sold or the seller relists it, at which time any remaining listing fee is recognized.
Seller Services revenue. Seller Services revenue consists of fees an Etsy seller pays us for the Seller Services she [HE] uses, including Promoted Listings, Direct Checkout, Shipping Labels and Wholesale.
• Revenue from Promoted Listings consists of cost-per-click based fees [WHAT ARE THE RATES?] an Etsy seller pays us for prominent placement of her [his] listings in search results generated by Etsy buyers in our marketplace. Revenue is recognized when the Promoted Listing is clicked.
• Revenue from Direct Checkout consists of fees an Etsy seller pays us to process credit, debit and Etsy Gift Card payments. [USE PAYPAL OR] Direct Checkout fees vary between 3–4% [BAM!] of the item’s total sale price plus a flat fee per order [HOW MUCH?], depending on the country in which her [his] bank account is located. Direct Checkout fees are taken from the item’s total sale price, including shipping. [THEY MAKE MORE FROM PROCESSING THE PAYMENT THAN THEY DO ON SALES COMMISSION? ... INCL. SHIPPING IN THE SKIM HELPS ... LOVE TO KNOW MORE ABOUT THAT FLAT FEE BASED ON SELLER'S GEOGRAPHY]
• Revenue from Shipping Labels consists of fees an Etsy seller pays us when she [HE] purchases shipping labels through our platform, net of the cost we incur in purchasing those shipping labels. We are able to provide our sellers shipping labels from the United States Postal Service and Canada Post at a discounted price due to the volume of purchases through our platform. [HOW MUCH DOES ETSY MARK THESE UP?]
• Revenue from Wholesale consists of fees an Etsy seller pays us when she [HE] is approved to enroll in our Wholesale program. The one-time Wholesale enrollment fee is recognized ratably over the estimated customer life. [WHAT'S ADVANTAGE OF BEING IN WHOLESALE PROGRAM? LOWER FEES? HOW MUCH IS THE ONE-TIME FEE?]
Other revenue. Other revenue includes the fees we receive from a third-party payment processor [PAYPAL? GRUDGING SINGLE MENTION BY NAME IN PROSPECTUS]. Other revenue is recognized as the transactions are processed by the third-party payment processor."