Reverb Gets New Revenue Team As Etsy Faces Pressure To Make House Of Brands Pay Off
UPDATE 4-22-25
Etsy has announced they are divesting Reverb which will go private after being sold to Servco Pacific Inc and Creator Partners LLC.
Liz Morton
Musical instrument marketplace Reverb is getting a new team focused on increasing revenue as parent company Etsy faces pressure to make "House of Brands" strategy and acquisitions pay off.
Chief Product Officer Bradford Shellhammer revealed that the new team will focus on "driving long-term revenue growth...including improving our existing seller advertising platform, Bump, shipping, and protection services, and building new products that provide value to buyers and sellers on our marketplace" in a LinkedIn post promoting a new job opportunity at the company.
Reverb was acquired by Etsy in 2019 as part of their "House of Brands" strategy which also included the acquisition of fashion resale marketplace Depop and Brazilian handmade marketplace Elo7 in 2021.
The strategy has had questionable results for Etsy, as these smaller sites have yet to add significant growth to the bottom line, and Etsy sold off Elo7 last year for an undisclosed sum.
The sale led to speculation about whether Etsy may spin off Reverb and/or Depop sometime in the near future as well and that possibility has only grown as notorious activist investor Elliott Management has taken a 13% stake in the company and a seat on the board.
Liz Morton
Elliott is well known for pressing companies it takes an activist interest in to cut costs, increase revenue, and sell off parts of the business - like in 2019 when they brought their influence to bear on eBay, resulting in the sale of StubHub and their Classifieds business, as well as other changes at the company.
We may already be seeing that influence reflected in Etsy surveying seller sentiment about listing fee increases and the possibility of paying a monthly subscription for a set amount of listings, indicating the company is looking for potential levers to pull to boost revenue quickly.
Liz Morton
The fact that Reverb is getting an entire new team dedicated specifically to revenue generation points to the urgency for Etsy to make these smaller marketplaces start pulling more weight in the overall House of Brands strategy and it will be interesting to see if Depop makes similar moves.
Unfortunately, it also points to the very high likelihood that sellers across Etsy, Reverb and Depop can expect to see fee increases, greater pressure to provide fast and free shipping, and ratcheting up of required participation and investment in various seller-paid advertising programs as activist pressure puts CEO Josh Silverman under the gun to increase revenue across the board.
Reaching into seller pockets may provide some short-term revenue generation, but if it doesn't come along with improvements to the sites that actually add value for both buyers and sellers, Etsy will likely still find themselves looking at breaking up the House of Brands and perhaps making more drastic changes to the core marketplace as well.
Do you think Etsy should sell Reverb and Depop to focus and invest in their main marketplace? Let us know in the comments below!
