For many side-business sellers, Etsy is where a handmade or vintage shop opens first. In 2025 that looked like a shrinking bet: marketplace sales fell at a high-single-digit rate early in the year and the active buyer count slipped. Since then the direction has changed, and Etsy has reported three consecutive quarters of year-over-year growth.
This Market Shift looks at what is driving the turnaround, what it costs sellers in ads and shipping, and how the sale of Depop to eBay changes the map for small sellers deciding where to list.
Trend Signal
58/100 Steady momentum
- Emerging
- Rising
- Mainstream
- Peaking
- Cooling
Three straight quarters of growth after 2025 declines
Etsy marketplace GMS rose 7.5% year over year in Q2 2026, its third straight quarter of growth after high-single-digit declines in early 2025, and Etsy raised its full-year outlook to mid-single-digit growth.
Our editorial reading of the cited data, not a forecast. How it is scored
By the numbers
- +7.5%Etsy marketplace GMS growth, Q2 2026 vs. Q2 2025Etsy
- 5.6MActive sellers on the Etsy marketplace at the end of 2025, down 1.5% year over yearEtsy
- 25.9%Etsy take rate (revenue divided by GMS) in Q2 2026, up 130 basis pointsEtsy
- $1.2BBase purchase price for Depop in eBay’s deal with Etsy, closed July 30, 2026Etsy
From decline to three quarters of growth
Etsy’s own numbers show the turn. For full-year 2025 the Etsy marketplace recorded $10.46 billion in gross merchandise sales (GMS), after high-single-digit declines early in the year. Fourth-quarter 2025 GMS was up 0.1%, though down 1.0% currency-neutral, the first of the three growth quarters. By the second quarter of 2026, marketplace GMS reached $2.6 billion, up 7.5% year over year, or 7.2% currency-neutral, the fifth straight quarter of sequential improvement.
The outlook moved with the results. In February 2026 Etsy guided to slight GMS growth for the year; in August it raised that to growth in the mid-single-digit range and guided third-quarter GMS to $2.53 billion to $2.58 billion, up 4% to 6%. Etsy described the change as an improvement of more than 10 percentage points from the declines of early 2025.
The people side is mixed. Etsy ended 2025 with 5.6 million active sellers, down 1.5%, and 86.5 million active buyers, down 3.4%. By mid-2026, trailing-12-month active buyers were about 87 million, roughly stable year over year, with gross buyer additions up 7.1%.
| Etsy marketplace metric | Value | Period |
|---|---|---|
| GMS | $10.46 billion | Full year 2025 |
| Active sellers | 5.6 million (down 1.5%) | End of 2025 |
| Active buyers | 86.5 million (down 3.4%) | End of 2025 |
| GMS growth | +7.5% | Q2 2026 |
| Take rate | 25.9% | Q2 2026 |
| GMS outlook | $2.53 billion to $2.58 billion (+4% to 6%) | Q3 2026 |
Where the growth is coming from
Order size is doing most of the work. Etsy said average order value was the largest contributor to GMS growth in Q2 2026, with higher listing prices the main driver, and GMS per active buyer rose 2.8% to $124 on a trailing-12-month basis. Purchase frequency was still modestly below the prior year, though the decline eased.
The mobile app is the main channel: app GMS grew 12.5% and the app drove about 47% of total GMS. By category, Etsy cited double-digit growth in birthday and wedding purchases, a surge in toys and games tied to trends such as mahjong and custom card games, and the strongest recent growth in vintage, including collectible watches, furniture and home decor.
Etsy’s strategy points the same way. The Q2 letter says handmade is a point of differentiation the company wants to lean into, and that seeing more of the maker’s process is one of the strongest drivers of buyer trust. We read that as a marketplace rewarding distinctive, well-presented, higher-priced listings over commodity items.
The cost side: take rate and ads
Growth has come with a larger cut for Etsy. Its take rate, revenue divided by GMS, was 25.9% in Q2 2026, up 130 basis points, of which about 80 came from the Reverb sale. Etsy said the marketplace’s own increase was driven primarily by Etsy Ads, with Offsite Ads also contributing, and it expects a take rate of about 26% in Q3. Services revenue rose 11.2% for the marketplace in the quarter, faster than marketplace revenue at 8.4%.
For sellers, that means visibility runs increasingly through paid placement, and ad spend belongs in any per-item margin calculation alongside listing and transaction costs.
Shipping rose too. On July 12, 2026 USPS applied its 12-to-15.999-ounce Ground Advantage price to every sub-pound parcel at published Commercial prices, an average 11.8% increase according to its filing, as reported by Supply Chain Dive. Sellers of light items such as jewelry, stickers and small gifts should check which rate tier their labels are bought at.
Depop to eBay, and a narrower Etsy
Etsy has pulled back to its core marketplace. It sold Reverb on June 2, 2025, and on July 30, 2026 it completed the sale of Depop to eBay for about $1.4 billion in cash: a $1.2 billion purchase price plus about $200 million in adjustments and interest. Chief executive Kruti Patel Goyal said the deal lets Etsy focus on building its marketplace for buyers and sellers.
eBay describes Depop as a consumer-to-consumer fashion marketplace with a highly engaged Gen Z and Millennial audience. For fashion resellers, Depop now sits inside a company whose total GMV was $22.4 billion in Q2 2026. On August 5, 2026 Etsy also announced a restructuring and workforce reduction concentrated in product and engineering, which it said was meant to help it move faster rather than to cut costs.
Who should open or expand a shop now
The data favors sellers whose products match what Etsy is promoting and what buyers are paying more for: handmade and personalized goods tied to occasions like birthdays and weddings, vintage, and distinctive toys and games. Those sellers get a stabilizing buyer base and a platform steering traffic toward higher-quality listings.
Sellers of generic or easily copied products face the other side of the same data: more reliance on ads, a take rate near 26% and higher postage on light parcels. For them Etsy can still be one channel, but the numbers argue for prices that absorb ad costs and for testing other marketplaces rather than relying on a single storefront.
What to watch next
- Etsy’s Q3 2026 results against its outlook of $2.53 billion to $2.58 billion in marketplace GMS
- Whether the take rate holds near 26%, a level Etsy attributes mainly to its ads products
- Changes to the Star Seller program, which Etsy’s Q2 2026 letter says it is starting to rework
Where to start
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Listing-photo gear by the shot it improves
| Product type | Good fit for | Where to look |
|---|---|---|
| Product photography light box | Fits small items and jewelry | See listings on AmazonOpens Amazon search results, not one listing: check the model on the product page. |
| Paper photo backdrop roll | Fits larger products and flat lays | See listings on AmazonOpens Amazon search results, not one listing: check the model on the product page. |
| Clip-on macro lens for phones | Fits close-up detail shots | See listings on AmazonOpens Amazon search results, not one listing: check the model on the product page. |
Product types that fit the trend described above, not tested models. Check the exact listing before you buy. How we pick them.
Product photography light box
Where to look: Amazon
Etsy says order values are rising with higher-quality listings. A light box is the simplest way to make small items look consistent. Check the interior size first.
- Even light without a studio
- Consistent look across listings
- Limits product size
- Can look flat without styling
Paper photo backdrop roll
Where to look: Amazon
For pottery, home decor and apparel, a paper roll gives a plain background at a larger scale than a box. Check the width against your widest product.
- Clean background for bigger items
- Works for flat lays
- Needs space and a stand
- Paper creases and wears
Clip-on macro lens for phones
Where to look: Amazon
Etsy links buyer trust to seeing the maker’s process. Close-ups of materials and finish help show it. Check fit against your phone’s camera layout.
- Shows texture and stitching
- Cheap and pocketable
- Shallow focus takes practice
- Fit varies by phone
More: Small Business and Side Hustles trends and how the Trend Signal is scored.
Sources
- Etsy, Inc. Reports Fourth Quarter and Full Year 2025 Results — Etsy Investor Relations
- Second Quarter 2026 Shareholder Letter — Etsy, Inc.
- Etsy Completes Sale of Depop — Etsy Investor Relations
- eBay Inc. Reports Second Quarter 2026 Results — eBay Inc.
- USPS Ground Advantage plan could heat up lightweight package rates — Supply Chain Dive
Questions readers ask
Is Etsy growing again in 2026?
Yes. Etsy marketplace GMS rose 7.5% year over year in Q2 2026 to $2.6 billion, its third consecutive quarter of growth, and Etsy expects mid-single-digit growth for the full year.
How many active sellers does Etsy have?
The Etsy marketplace had 5.6 million active sellers at the end of 2025, down 1.5% from a year earlier, according to Etsy’s fourth-quarter 2025 results.
Who bought Depop from Etsy?
eBay. The sale closed on July 30, 2026 for about $1.4 billion in cash, made up of a $1.2 billion purchase price and about $200 million in adjustments and interest.
Why is Etsy’s take rate rising?
Etsy said the marketplace take-rate increase in Q2 2026 was driven primarily by Etsy Ads, with Offsite Ads also contributing; the reported 25.9% also includes about 80 basis points from the Reverb sale.
