eBay and Etsy Weather Tariff Pressures

Tariffs and the Secondhand Market: A Resilient Sector

The secondhand industry, much like nearly all business sectors, is currently navigating the consequences stemming from tariffs implemented under President Donald Trump’s administration.

eBay and Etsy’s Perspectives

Despite these challenges, initial responses from both eBay and Etsy suggest a limited degree of concern. Both companies recently released their Q1 2025 earnings reports, and addressed the issue of tariffs directly.

Their resilience is largely attributable to the sourcing strategies employed by their sellers. Unlike competitors such as Temu and Shein, who have recently adjusted prices upwards in response to the tariffs, a significant portion of eBay and Etsy sellers source products domestically, frequently offering used, vintage, or handmade items.

Minimal Tariff Exposure

Both companies presented data during their earnings calls to illustrate their relatively low exposure to the impact of tariffs.

Jamie Iannone, CEO of eBay, stated that transactions originating from Greater China to the U.S. represent approximately 5% of their total gross merchandise value. He further clarified that China accounts for just under 10% overall.

Lanny Baker, CFO of Etsy, indicated that direct tariff exposure is currently minimal, with just over 1% of their gross merchandise sales originating from U.S. imports sourced from sellers in China.

The Advantage of Local Sourcing

Josh Silverman, Etsy’s CEO, highlighted that the majority of their sellers are individual entrepreneurs operating from home, with 90% procuring their supplies within the domestic market.

This emphasis on local sourcing provides a considerable advantage over competitors like Temu, Shein, and Amazon. However, secondhand businesses still face hurdles related to ongoing economic uncertainty and shifts in consumer spending patterns.

Etsy’s Challenges

Etsy appears somewhat more susceptible to these broader economic trends. Its business model centers on handcrafted and vintage goods, which generally command higher price points.

While Etsy sellers may not be directly affected by tariffs, consumer reluctance to spend has resulted in a 3.4% year-over-year decrease in active buyers, now totaling 88.5 million. The number of habitual buyers also experienced a decline of 11%, reaching 6.2 million.

Furthermore, Etsy reported an 8.9% reduction in gross merchandise sales (GMS) for the marketplace, amounting to $2.3 billion.

Depop as a Bright Spot for Etsy

Despite these challenges, Etsy continues to benefit from its ownership of Depop, a secondhand fashion platform that maintains popularity even amidst economic concerns. Since its acquisition in 2021, Depop has achieved record-high gross merchandise sales, though specific figures were not disclosed.

Silverman expressed confidence in Etsy’s ability to adapt and navigate turbulent macroeconomic conditions, citing a strong track record.

eBay’s Strong Position

In contrast, eBay is positioned more favorably, as a growing number of budget-conscious consumers are opting for used and refurbished items, which constitute over 40% of the company’s inventory.

The company noted an increase in customer spending, potentially driven by concerns over tariffs and increased costs at U.S. customs, contributing to a strong start to the quarter.

Steve Priest, eBay’s CFO, explained that they’ve observed positive volume trends due to strength in key categories and a possible acceleration of demand from consumers anticipating higher costs and complexities at customs.