What changed in this filing

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Item 1. Business

2024-02-29 compared with 2023-03-03 · 113 added, 163 removed, 205 unchanged (57% of the section changed)

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We launched our e-commerce platform in 2013 and transitioned to a full e-commerce marketplace model in 2016.

As of December 31, 2022, we operate an e-commerce marketplace with approximately 7,300 seller accounts, compared to over 4,700 as of December 31, 2021.

The increase in sellers reflects our launch of new seller pricing tiers in January 2022, including a subscription-free tier with higher commission rates.

As of December 31, 2022, we had 5.5 million users compared to 4.3 million as of December 31, 2021 and approximately 1.5 million listings, compared to 1.3 million as of December 31, 2021.

Users represent non-seller visitors who register on our website and include both buyers and prospective buyers.

As of December 31, 2022, we had a seller stock value in excess of $16.0 billion compared to a seller stock value in excess of $14.0 billion as of December 31, 2021.

Our seller stock value is the sum of the stock value of all available products listed on our online marketplace.

We had 6.3 million users and approximately 1.7 million listings as of December 31, 2023, compared to 5.5 million users and approximately 1.5 million listings as of December 31, 2022.

Users represent non-seller visitors who register on our website, including both buyers and prospective buyers, and are identified by a unique email address.

Our online marketplace seller stock value, the sum of the stock value of all available products listed on our online marketplace, was consistent year over year and exceeded $10.0 billion as of both December 31, 2023 and 2022.

An individual listing’s stock value is calculated as the item’s current price multiplied by its quantity available for sale.

As of December 31, 2023, we had approximately 7,800 unique sellers, compared to approximately 5,600 unique sellers as of December 31, 2022.

This metric was updated from the previously disclosed seller accounts metric as we believe unique sellers is a more useful measure of our seller base.

This differs from seller accounts, which counts a unique seller multiple times if that seller has sales in multiple verticals.

We provide our sellers, the vast majority of which are small businesses, access to a global community of buyers and a platform to facilitate e-commerce at scale.

Our sellers use our platform to manage their inventory, build their digital marketing presence, and communicate and negotiate orders directly with buyers.

We provide our buyers a trusted purchase experience with our user-friendly interface, dedicated specialist support, and 1stDibs Promise, our comprehensive buyer protection program.

Our sellers use our platform to manage their inventory, build their digital marketing presence, and communicate and negotiate prices directly with buyers.

We provide our buyers a trusted purchase experience with our user-friendly interface, dedicated specialist support, and our 1stDibs Promise, our comprehensive buyer protection program outlined in-depth below.

We operate an asset-light business model which allows us to scale in a capital efficient manner.

While we enable shipping and fulfillment logistics, we do not take physical possession of the items sold on our online marketplace.

The uniqueness, diversity, and high quality of the products on our online marketplace, together with an active marketing effort, have produced a large, global, and growing base of design-loving buyers.

The uniqueness, diversity, and high quality of the products on our online marketplace, together with an active marketing effort, have produced a large global base of design-loving buyers.

Our user-friendly interface, dedicated specialist support, and 1stDibs Promise enable a trusted purchase experience.

Despite the growth on the seller and user side, we experienced year-over-year decreases in GMV, net revenue, and certain key buyer metrics as they have been negatively impacted, both directly and indirectly, by macroeconomic factors, including significant capital market volatility, the prolonged COVID-19 pandemic and the changing consumer behaviors as a result, significant housing market volatility, raising interest rates, global economic and geopolitical developments, and inflation;

Despite the growth on the seller side, we experienced year-over-year decreases in GMV, net revenue, and certain key buyer metrics as we believe they have been adversely impacted, both directly and indirectly, by macroeconomic factors, including significant capital market volatility, significant housing market volatility, rising interest rates, inflation, global economic and geopolitical developments, and changing consumer behavior in a post-COVID-19 environment;

however, these impacts are difficult to isolate and quantify.

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We define Active Buyers as buyers who have made at least one purchase through our online marketplace during the 12 months ended on the last day of the period presented, net of cancellations.

We plan to continue to invest in our strategic initiatives, including those discussed below, in order to continue to drive growth on the seller side and be prepared for if and when macroeconomic conditions improve.

In each of the years ended December 31, 2022 and 2021, we had an on-platform average order value (“AOV”) of above $2,700 and a median order value (“MOV”) of approximately $1,300.

We plan to continue to invest strategically in growth initiatives to be prepared if and when macroeconomic conditions improve.

We had an on-platform average order value (“AOV”) of above $2,600 and $2,700, and a median order value (“MOV”) of approximately $1,200 and $1,300 in the years ended December 31, 2023 and 2022, respectively.

We do not focus on AOV or MOV as key metrics in evaluating our business given our priority to make unique, high-end design items across various price points available through our online marketplace.

The percentage of Active Buyers who make more than one purchase in any given year has been generally consistent from year to year and comprised of approximately 30% of total Active Buyers in each of the years ended December 31, 2022 and 2021.

The percentage of Active Buyers who make more than one purchase in any given year has been generally consistent from year to year and comprised approximately 30% of total Active Buyers in each of the years ended December 31, 2023 and 2022.

Highly experienced interior designers, whom we refer to as Trade Buyers, are frequent, repeat purchasers on our online marketplace and accounted for 31% and 32% of our on-platform GMV in the years ended December 31, 2023 and 2022, respectively.

Through our Trade 1st program, we offer these Trade Buyers, who comprise a subset of our buyers, additional benefits such as trade-only personalized support, exclusive trade pricing, and buyer incentives.

Our Trade 1st program is a buyer-only program and members do not pay any fees to participate in this program.

As our online marketplace has scaled, we have created powerful network effects, with better supply attracting more buyers and more buyers encouraging high-quality sellers to join and remain on our platform.

Once in motion, the flywheel effect of this network enhances both seller and buyer quality, which we believe drives a competitive advantage.

Once in motion, the flywheel effect of this network enhances both seller and buyer quality, which we believe produces a competitive advantage.

We are driving consumer demand for luxury design products online by providing global access to a traditionally fragmented, local, and offline market.

As sellers and buyers of luxury design products gain experience transacting online, we believe our combination of technology, service, and brand positions us to enable and grow this market by providing sellers and buyers the tools and access they need.

Our proprietary technology platform enables a purchase funnel that is more robust and interactive than the conventional e-commerce experience.

We believe our proprietary technology platform enables a purchase funnel that is more robust and interactive than the conventional e-commerce experience.

The discovery and transaction process in our industry is more complex than in most e-commerce categories.

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Our platform turns this complex order flow into an easy-to-use process and converts the valuable data we collect from buyers’ browsing and purchase activity into actionable insights for both sellers and buyers.

Our platform is scalable, which we believe enables us to efficiently drive expansion into new geographies and verticals while supporting the creation and development of new applications.

We empower buyers to engage directly with sellers on our platform throughout all stages of a transaction.

Our technology and data represent the cumulative experience of 20 years of business activity, and we believe are extremely difficult to replicate.

Our technology and data represent the cumulative experience of over 20 years of business activity, and we believe are extremely difficult to replicate.

Our Market Opportunity

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Global Luxury Market

Our core market, including high-quality design furniture and homewares, fine art, and watches and jewelry, was estimated to be approximately $178 billion in 2022, according to Bain & Company.

Our core market, including high-quality design furniture and homewares, fine art, watches and jewelry, was estimated to be approximately $198 billion in 2023, according to Bain & Company.

Our platform is built on a scalable infrastructure that allows us to enter adjacent luxury markets and expand our addressable market with minimal additional investment.

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and (2) growing the luxury design buyer base by introducing our online audience to unique products previously only accessible via in-person galleries, boutiques, and auction houses.

In the year ended December 31, 2022, we launched new seller pricing tiers, including a subscription-free tier with higher commission rates which increased our seller count to approximately 7,300 from over 4,700 as of December 31, 2021, as well as launched localized sites in Germany and France.

Additionally, in November 2021 we introduced 1stDibs Auctions, and for the year ended December 31, 2022 auction orders comprised approximately 5% of total orders.

We were able to grow these metrics in the year ended December 31, 2022, despite the macroeconomic issues effecting GMV and net revenue.

As we reinvent how buyers discover and engage with luxury design products, we have found that we are attracting a new and broader audience to our market.

In the year ended December 31, 2023, we increased the number of unique sellers on the platform to approximately 7,800 from approximately 5,600 as of December 31, 2022, as well as launched localized sites in Italy and Spain.

We have sold items on our online marketplace ranging from less than $100 to over $1 million, demonstrating that high-end luxury design products are attainable and within reach of the expanding buyer audience we are attracting to the market.

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Bain & Company estimates that online personal luxury goods purchases will continue to grow, reaching up to 30% of total sales by 2025.

According to Bain & Company, Gen-Y and Gen-Z, born during 1981-1995 and 1996-2015, respectively, are expected to account for 65-70% of luxury spend by 2025.

Spending by Gen-Z and Gen-Alpha, born during 1996-2015 and kids born after 2016, respectively, will grow three times faster than previous generations, making up one third of purchases in the luxury goods market by 2030.

According to Bain & Company, Gen-Y, Gen-Z and, Gen-Alpha, born during 1981-1995, 1996-2015, and kids born after 2016, respectively, are expected to account for nearly 85% of luxury spend by 2030.

Spending by Gen-Z and Gen-Alpha, will grow three times faster than previous generations, making up one third of purchases in the luxury goods market by 2030.

These generations are leading the shift from offline to online commerce and will soon dominate the luxury goods market’s customer base.

During the year ended December 31, 2022, traffic on our website grew 16% from the year ended December 31, 2021.

Additionally, the number of seller accounts grew to approximately 7,300 from over 4,700 as of December 31, 2021.

We believe these metrics are proof of the increasing online penetration in the luxury goods market, despite the macroeconomic issues effecting GMV and net revenue.

During the year ended December 31, 2023, we increased the number of unique sellers on the platform to approximately 7,800 from approximately 5,600 as of December 31, 2022, while the number of listings grew from over 1.5 million as of December 31, 2022 to approximately 1.7 million as of December 31, 2023.

Additionally, we had 6.3 million users as of

December 31, 2023, compared to 5.5 million users as of December 31, 2022.

We believe these metrics are indicative of our online penetration in the luxury goods market, despite the macroeconomic issues affecting GMV and net revenue.

The 1stDibs Marketplace

Trust is at the core of the online marketplace that we have built in over two decades of operating history.

Trust in our online marketplace is critical to facilitating online transactions of highly considered purchases with high price points.

Trust is at the core of the online marketplace that we have built over two decades of operating history.

Trust in our online marketplace is critical to facilitating online transactions of purchases with high price points.

During each of the years ended December 31, 2023 and 2022, over 20% of our on-platform GMV was generated from orders with an item value above $15,000 and approximately 5% and 4% for orders with an item value of $100,000 or more for the years ended December 31, 2023 and 2022, respectively.

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Extensive fraud protection and secure payment solutions further establish the trust sellers and buyers have in our online marketplace.

The ability for buyers to interact and negotiate prices directly with sellers increases both on-platform conversion and buyer retention rate.

We believe, the ability for buyers to interact and negotiate prices directly with sellers increases both on-platform conversion and buyer retention rate.

Our 1stDibs Promise gives our buyers peace of mind with every purchase by providing the following features and commitments:

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As of December 31, 2023, we provided sellers access to a global base of approximately 6.3 million users in over 175 countries, who would otherwise largely be inaccessible in an offline market.

Our Active Buyers had 86 and 81 sessions and viewed 218 and 289 product pages, on average, during the years ended December 31, 2023 and December 31, 2022, respectively.

We built 1stDibs to empower and inspire confidence in our sellers by using our proprietary technology to digitize and transform their businesses.

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Once sellers are added to our online catalog, we help build sellers’ online presence through editorial and social placements, including our online magazine Introspective , which offers sellers additional avenues through which to advertise online.

Our integration with Apple News also allows a broader audience of users to discover 1stDibs.

• Online Presence:

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This data allows sellers to offer more relevant products and optimize their pricing strategies, which enables them to efficiently scale their businesses.

We provide sellers with a comprehensive suite of seller tools, education, and analytics,

including reporting, tracking, and inside perspectives on pricing based on the historical sales of similar items.

We provide sellers with a comprehensive suite of seller tools, education, and analytics, including reporting, tracking, and inside perspectives on pricing based on the historical sales of similar items.

Sellers also benefit from our proprietary algorithms and targeting technologies to connect with both consumers and Trade Buyers.

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We empower sellers with tools useful for them to control item pricing and item visibility on our online marketplace.

Sellers can leverage our proprietary classification methodologies and structured data to create listings tailored to their inventory.

Sellers can leverage our proprietary classification methodologies and structured data to

create listings tailored to their inventory.

We have created a pricing index, “1stDibs Insider,” which provides pricing guidance to our sellers based on historical pricing trends.

By providing historical pricing data for similar items that have recently sold, we believe this help sellers price items more competitively.

By providing historical pricing data for similar items that have recently sold, we believe this helps sellers price items more competitively.

On our platform, sellers can set item pricing based on user type (Consumer vs.

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Our sellers can efficiently scale their businesses without the friction associated with in-person sales and multiple third-party platforms.

The ability to offer a convenient, seamless transaction experience, including on-platform communications and a wide range of payment solutions, such as credit card, PayPal, ACH, wire, Apple Pay, and Klarna further drives buyer conversion.

We maximize search engine optimization to help buyers find items and connect with our sellers, allowing them to purchase products tailored to their tastes and preferences with ease.

The ability to offer a convenient, seamless transaction experience, including on-platform communications and a wide range of payment solutions, such as credit card, PayPal, Apple Pay, Automated Clearing House (“ACH”), and wire further drives buyer conversion.

We maximize Search Engine Optimization (“SEO”) to help buyers find items and connect with our sellers, allowing them to purchase products tailored to their tastes and preferences with ease.

We have assembled a robust network of logistics providers to help sellers fulfill orders at a lower cost, giving them an advantage relative to conventional offline sales and allowing them to focus more time on what they do best:

curating and selling unique luxury design items.

Sellers have the ability to request custom quotes, offer free or partial shipping, opt into shipping services that we help enable, and access tracking details via the platform.

Using our platform, sellers can also select to subsidize the shipping cost and pass on savings to buyers.

Value Proposition to Buyers

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Our platform calculates a “salability” score for items using machine learning and gives items with a higher likelihood of selling increased priority in buyers’ search and browse sort order.

Additionally, our platform offers pricing insights to show buyers historical pricing data for similar items that have recently sold which can help buyers negotiate, increase confidence, and help in decision-making.

Additionally, our platform offers pricing insights to show buyers historical pricing data for similar items that have recently sold which can increase buyer confidence and help buyers with decision-making and in negotiations.

Our customized Private Client and Trade Service teams provide high-touch human support for consumer and Trade Buyers.

Our buyer services include:

• Largest Selection of Unique Luxury Design Products:

We offer one of the largest online selection of luxury design products from leading sellers and makers of vintage, antique, and contemporary furniture, home décor, jewelry, watches, art, and fashion.

We believe our growing collection of approximately 1.7 million luxury design products is unmatched and makes us the premier destination for design lovers and enthusiasts.

Luxury design products tend to retain value over time as a result of their scarcity and durability.

We aggregate supply from a large number of globally distributed sellers, offering buyers an online destination to access a variety of luxury products across the globe.

As of December 31, 2023 and December 31, 2022, we had approximately 44% and 41% of our listings located outside the United States, respectively.

The percentage of our unique sellers based outside of the United States was 55% and 52% as of December 31, 2023 and December 31, 2022, respectively.

• Buyer-Seller Communication :

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For certain individual Consumers or Trade Buyer, respectively, we provide support at the individual level through our Private Client and Trade Services to provide a seamless buying process.

Our Competitive Strengths

Largest Selection of Unique Luxury Design Products

We believe our growing collection of approximately 1.5 million luxury design products is unmatched and makes us the premier destination for design lovers and enthusiasts.

Luxury design products tend to retain value over time as a result of their scarcity and durability.

We aggregate supply from a large number of globally distributed sellers, offering buyers an online destination to access a variety of luxury products across the globe.

As of December 31, 2022 and December 31, 2021, we had approximately 41% and 40% of our listings located outside the United States, respectively.

The percentage of our seller accounts based outside of the United States was 51% and 47% as of December 31, 2022 and December 31, 2021, respectively.

Brand History Built on Trust and Authenticity

We have built a digitally native brand that is synonymous with luxury design by earning credibility with sellers and building buyer trust and loyalty in our brand and online marketplace.

This trust is built through a seamless buying and selling experience, backed by years of excellence and an industry-leading vetting process.

Our vetting specialists complete an evaluation of each seller prior to being accepted by 1stDibs.

These specialists are highly trained, experienced experts in art, design, jewelry, among other areas, and conduct due diligence on each seller.

This vetting process helps to ensure that our buyers can continue to purchase items on our online marketplace with confidence as we grow.

Highly Engaged Buyer Community

Our online marketplace appeals to a broad range of design lovers across multiple income groups, geographies, and age groups.

Our diverse group of buyers appreciate the value of high-quality luxury products and want a convenient and secure way to complete these highly considered product purchases.

Our Active Buyers had 81 and 80 sessions and viewed 289 and 237 product pages, on average, during the years ended December 31, 2022 and December 31, 2021, respectively.

Our marketing content, combined with our expert curation and merchandising, helps buyers navigate through approximately 1.5 million luxury design products.

Seamless Purchasing Experience

We deliver a seamless luxury experience in a digital environment.

We pioneered a two-sided communication functionality that allows sellers and buyers to negotiate directly through our platform’s message center.

Our buyers also have access to dedicated sales and client service teams to ensure a smooth, convenient, and personalized buying experience.

As ambassadors of 1stDibs, our sales team interacts with high potential trade accounts and Private Clients to identify sales opportunities and to educate them on our service offerings.

Buyers enjoy the flexibility of accessing our platform across devices and choosing among a wide range of payment options and purchase formats, such as Negotiation, Auction, or Private Offer.

Additionally, we have assembled a global network of logistics providers to allow our sellers to ship products virtually anywhere in the world.

Powerful Network Effects

We created powerful network effects by leveraging our proprietary data and technology with better supply attracting more buyers and more buyers encouraging high-quality sellers to join and remain on our online marketplace.

Once in motion, the

flywheel of this network enhances both seller and buyer quality and drives a competitive advantage.

Having more buyers on our marketplace increases the sale potential for our sellers, causing them to list more inventory and focus more time on 1stDibs buyers.

This value cycle serves as a barrier to entry against potential competition.

This network effect has driven tremendous value to all parties and made 1stDibs one of the largest luxury design online marketplaces in the world with increasing returns to scale.

Fully Scalable Marketplace Model

We are an online marketplace operating a scaled, asset-light business that offers an extensive catalog of luxury design products across our specific verticals.

We enable fulfillment and shipping, but do not own or manage inventory, further supporting favorable working capital dynamics as we grow.

Our scalable technology platform enables us to efficiently drive expansion into new geographies and verticals while supporting the creation and development of new applications.

For example in November 2021, we introduced 1stDibs Auctions as a new purchase format.

Also, in April and May 2022, we launched localized sites in Germany and France, respectively.

These sites enable local buyers to browse and receive customer support in their local language.

Powerful Data and Analytics

We use proprietary data and algorithms to drive operational insights that continuously enhance our seller and buyer experiences.

We leverage this data, including user behaviors, sales trends, and seller behaviors, to improve the effectiveness of our buyer targeting and conversion efforts, and increase supply growth from existing and prospective sellers.

As our online marketplace grows, our data becomes increasingly valuable.

This data advantage allows us to develop business processes to optimize our operations, including marketplace supply, merchandising, authentication, pricing, marketing, and servicing.

We collect and share data from across the platform to improve seller tactics and help them make informed decisions about sourcing, pricing, and selling products on our online marketplace.

We use internal and external data to target, acquire, and retain qualified buyers through performance-based, data-driven marketing campaigns.

Innovative and Proprietary Technology

Our highly sophisticated, purpose-built technology stack facilitates complex, multi-step online transactions and is extremely difficult to replicate.

We created an extensive digital catalog in luxury design with associated metadata that is used to simplify the buyer experience in an ordinarily complex purchase process.

Technology powers all aspects of our business, including our complex single-SKU and multi-SKU order management system.

We leverage automation and tools to improve efficiency and deliver a positive customer experience.

Our Environmental, Social, and Governance (“ESG”) Efforts

Our business creates a positive environmental and economic impact, balancing the needs of our buyers, sellers, partners, employees, investors and the environment.

We are committed to extending the lifecycle of luxury goods by promoting their recirculation.

As of December 31, 2022, approximately 64% of the listings on our marketplace are secondary.

Buying an item on our marketplace offsets the need to manufacture a new item, this opportunity to shop sustainably creates a positive economic impact for all parties.

We have built a talented, experienced management team led by our CEO, David Rosenblatt, who joined 1stDibs in November 2011 with a vision to transform the online luxury experience.

Members of our management team have helped create and grow leading luxury, design, and technology businesses globally such as Amazon, Care.com, Christie’s, DoubleClick, Farfetch, Google, PayPal, Refinery29 and Shutterstock, and have retained a strong entrepreneurial spirit and a wide array of knowledge.

We believe in the importance of fostering a diverse, inclusive, and safe workplace;

diversity is both a priority and strength of our company.

We strive to continue to improve representation throughout the organization.

Below is a breakdown of how our U.S.-based team self-identifies as of December 31, 2022.

Asian Black or African American Hispanic or Latino White Two or more races Female

All Employees 17 % 8 % 8 % 64 % 3 % 56 %

Management (1)

— % 13 % — % 87 % — % 50 %

(1) - Management is defined as our Executive Leadership Team.

The composition of our Board of Directors also reflects our commitment to diversity.

Three of our six directors, including each chairperson of our Audit, Compensation, and Nomination and Corporate Governance committees, are female or a member of the LGBTQ+ community.

We are committed to building a diverse team and an inclusive workplace that respects and meets the needs of our diverse community of sellers, creators, and customers.

To that end, we are leading a number of initiatives to further broaden the spectrum of our workforce and to create a culture of diversity, equity, and inclusion.

Our goal is to ensure that all people feel welcome and are ultimately celebrated for their uniqueness.

Our efforts are focused on establishing business norms that promote Diversity, Equity, Inclusion, and Belonging (“DEIB”) both within the company and across the broader design community.

During the year ended December 31, 2022, our internal approach included educational, recruiting, and corporate social responsibility programs.

We established six employee resource groups for the purpose of connecting employees with shared identities, backgrounds, and interests to help foster the company’s culture of inclusion, and engage employees in our DEIB efforts.

Externally, we continued to provide financial support to organizations through our employee giving and charitable donations program.

Our Growth Strategies

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We are focused on continuing to grow our buyer base and believe we are still in the early stages of introducing a unique and growing supply of luxury design products to a much broader audience.

Of our 5.5 million users as of December 31, 2022, we estimate that approximately 67% are U.S.-based and 33% are international, which represents less than 1% penetration of the population of both markets.

As of December 31, 2021, of out 4.3 million users, we estimated that approximately 69% were U.S.-based and 31% were international.

Users represent non-seller visitors who register on our website and are identified by a unique email address, and include both buyers and prospective buyers.

As of December 31, 2022, 18% of buyers are located internationally, which is unchanged from December 31, 2021.

Of our 6.3 million users as of December 31, 2023, we estimate based on the available information provided by our users that approximately 66% are U.S.-based and 34% are international, which represents approximately 1% penetration of the U.S.

population and less than 1% of the international population.

As of December 31, 2022, of our 5.5 million users, we estimated that approximately 67% were U.S.-based and 33% were international.

As of December 31, 2023, 20% of buyers are located internationally, compared to 18% from December 31, 2022.

To date, we have primarily grown our current buyer base organically through word-of-mouth, mentions in the press, and earned media.

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This value proposition drives sellers to our online marketplace, deepens the breadth of our inventory, and helps attract new buyers.

Consistent with our strategy to grow our online marketplace supply, we launched new seller pricing tiers in January 2022, which allow new sellers to choose the plan that best fits their business, including choices of a higher monthly subscription fee and lower commission rates, as well as a subscription-free tier with higher commission rates.

As of December 31, 2022, the number of seller accounts grew to approximately 7,300 from over 4,700 as of December 31, 2021, and our seller stock value was in excess of $16.0 billion as of December 31, 2022 compared to a seller stock value in excess of $14.0 billion as of December 31, 2021.

As of December 31, 2023, the number of unique sellers grew to approximately 7,800 from approximately 5,600 as of December 31, 2022.

We may also choose to expand our network of sellers inorganically, either through acquisitions of, or partnerships with, companies or design brands.

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Adding verticals has several benefits, including increasing our addressable market, the number of sellers and buyers, and purchasing frequency, and offering our buyers a wider supply of inventory while strengthening our brand as a preeminent online destination for luxury design products.

We believe there are also opportunities to diversify our business model by expanding into additional sales formats, including, for example, an auction format which launched in November 2021 and has traditionally been the primary sales format in our industry.

For the year ended December 31, 2022 auction orders comprised approximately 5% of total orders.

We believe there are also opportunities to diversify our business model by expanding into additional sales formats.

We intend to continue to evaluate such diversification opportunities as part of our overall growth strategy.

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During the year ended December 31, 2023, the vast majority of our buyers were located in the United States and other English-speaking countries.

As of December 31, 2022, 41% of the supply on our online marketplace comes from outside the

United States, while only 18% of buyers are located internationally.

We believe that this presents a large international expansion opportunity.

As of December 31, 2023, 44% of the supply on our online marketplace comes from outside the United States, while only 20% of buyers are located internationally.

We believe that this presents a large international

expansion opportunity.

Our website traffic also indicates strong international presence and opportunities for conversion, with approximately 43% of current traffic coming from outside the United States.

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We may also expand internationally through acquisitions.

Our Technology and Data

Technology powers all aspects of our business.

Our proprietary services-based architecture is the foundation of our platform.

It is designed to connect sellers and buyers worldwide, enabling online transactions of unique products by removing purchase friction.

We leverage appropriate technologies to ensure security, performance, and scalability.

Key features of our technology platform include:

• Services-based Architecture :

Allows us to scale individual parts of the platform independently from others, increasing engineering efficiency.

It also facilitates using different programming languages appropriate for specific tasks, including python for machine learning, java for big data jobs, and node for front end integrations.

• Proprietary Database :

Includes taxonomies, structured metadata, an expansive catalog of luxury brands and designers, and an extensive library of luxury design products, product attributes, and pricing data.

Leverages browsing history on our platform, followed searches, “favorited” items, and previous purchases to generate personalized emails and on-site recommendations.

Provides the ability to predict the relative likelihood of an item selling, as compared with other items, based upon price point and the quality of the listing, images, and shipping quotes.

• Scalable Page Creation :

Utilizes unstructured on-platform search query data to create new indexable pages automatically to increase our long-tail organic search traffic and enable broader Search Engine Optimization (“SEO”) and Search Engine Marketing (“SEM”) coverage.

• System Security and Business Continuity :

Infrastructure has been designed to adhere to industry best practices for secure storage and management of all sensitive data, including encryption (for data at rest as well as in transit), access logging, and internal change controls.

Physical and logical access controls are in place, and personally identifiable information is obfuscated.

Utilize third-party servers across multiple availability zones with data securely backed up in real time across multiple regions, with ability to rapidly migrate to alternative data centers.

We acquire new buyers and drive traffic to our online marketplace through a mix of direct response marketing channels, with an emphasis on digital and a focus is on efficient growth.

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We understand user preferences from their discovery and purchase history, and use that data to recommend products that are most likely to drive engagement, conversion, and repeat purchasing.

We offer Private Client services to our most engaged consumers and cultivate interior designer engagement and retention through the Trade 1st program.

We offer Private Client services to our most engaged consumers;

and cultivate interior designer engagement and retention through the Trade 1st program.

We communicate with our buyers primarily through email, site, text, mobile push notifications, print catalogs, and organic social.

We acquire new sellers through a combination of inbound applicants who primarily find us by word of mouth from other sellers, as well as focused lead sourcing from fairs, association, and industry groups.

We acquire new sellers through a combination of inbound applicants who primarily find us by word of mouth from other sellers, as well as focused lead sourcing.

We review all applications from these efforts, tier them according to desirability based on their inventory quality and “salability” onsite, and then invite the approved sellers to join our online marketplace.

Services and Logistics

We are committed to offering exceptional service as an integral part of a digital luxury experience.

Our 1stDibs Promise, includes a price-match guarantee, comprehensive buyer protection, global delivery and more.

Our Marketplace Trust team oversees anti-money laundering, fraud protection, and seller performance.

In addition, we may offer certain Private Clients and Trade Buyers with a dedicated sales specialist and exclusive benefits.

We provide additional benefits to Trade Buyers, including trade exclusive pricing, buyer incentives, priority support, sourcing expertise, and enhanced buyer protection, among others.

Our client service team helps ensure the satisfaction of sellers and buyers by addressing and assisting in the resolution of questions relating to orders, deliveries, returns, and disputes, including our buyer protection program.

Our logistics team works

closely with leading global logistics providers to enable seamless delivery from the sellers’ locations directly to buyers, both within the United States and internationally.

Environmental, Social, and Governance (“ESG”)

Our business creates a positive environmental and economic impact, balancing the needs of our buyers, sellers, partners, employees, investors and the environment.

We are committed to extending the lifecycle of luxury goods by promoting their recirculation.

As of December 31, 2023, approximately 64% of the listings on our marketplace are secondary.

Buying an item on our marketplace offsets the need to manufacture a new item, which creates a positive economic impact for all parties.

In addition to providing buyers an opportunity to shop sustainably, we continued to provide financial support to organizations through our employee giving and charitable donations program in the year ended December 31, 2023.

Our Employees, Culture, Values and Human Capital Resources

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We regularly receive input from our team members through employees surveys, focus groups, and events to gauge employee engagement and identify areas of focus.

Segment and Geographic Information

We have one operating and reportable segment.

See Note 2 “Summary of Significant Accounting Policies” to our consolidated financial statements for further discussion of our operating and reportable segment.

We have built a talented, experienced management team led by our CEO, David Rosenblatt, who joined 1stDibs in November 2011 with a vision to transform the online luxury experience.

We believe in the importance of fostering a diverse, inclusive, and safe workplace;

diversity is both a priority and strength of our company.

We strive to continue to improve representation throughout the organization.

Below is a breakdown of how our U.S.-based team self-identifies as of December 31, 2023.

Asian Black or African American Hispanic or Latino White Two or more races Female

All Employees 16 % 7 % 6 % 67 % 4 % 50 %

Management (1)

— % 12 % — % 88 % — % 38 %

(1) - Management is defined as our CEO and the management team reporting directly to the CEO.

The composition of our Board of Directors also reflects our commitment to diversity.

In 2023, three of our six directors, including each chairperson of our Audit, Compensation, and Nomination and Corporate Governance committees, are female or a member of the LGBTQ+ community.

We are committed to building a diverse team and an inclusive workplace that respects and meets the needs of our diverse community of sellers, creators, and customers.

To that end, we are leading a number of initiatives to further broaden the spectrum of our workforce and to create a culture of diversity, equity, and inclusion.

Our goal is to ensure that all people feel welcome and are ultimately celebrated for their uniqueness.

Our efforts are focused on establishing business norms that promote Diversity, Equity, Inclusion, and Belonging (“DEIB”) both within the company and across the broader design community.

During the year ended December 31, 2023, our internal approach included educational, recruiting, and corporate social responsibility programs.

We currently have five employee resource groups for the purpose of connecting employees with shared identities, backgrounds, and interests to help foster the company’s culture of inclusion, and engage employees in our DEIB efforts.

Our Technology and Data

Technology powers all aspects of our business.

Our proprietary services-based architecture is the foundation of our platform.

It is designed to connect sellers and buyers worldwide, enabling online transactions of unique products by removing purchase friction.

We leverage appropriate technologies to ensure security, performance, and scalability.

Key features of our technology platform include:

• Services-based Architecture :

Allows us to scale individual parts of the platform independently from others, increasing engineering efficiency.

It also facilitates using different programming languages appropriate for specific tasks, including python for machine learning, java for big data jobs, and node for front end integrations.

• Proprietary Database :

We created an extensive digital catalog in luxury design with associated metadata that is used to simplify the buyer experience in an ordinarily complex purchase process.

This database includes taxonomies, structured metadata, an expansive catalog of luxury brands and designers, and an extensive library of luxury design products, product attributes, and pricing data.

Our highly sophisticated, purpose-built technology stack facilitates complex, multi-step online transactions and is extremely difficult to replicate.

Technology powers all aspects of our business, including our complex single-SKU and multi-SKU order management system.

We leverage browsing history on our platform, followed searches, “favorited” items, and previous purchases to generate personalized emails and on-site recommendations.

This data provides us the ability to predict the relative likelihood of an item selling, as compared with other items, based upon price point and the quality of the listing, images, and shipping quotes.

• Scalable Page Creation :

We utilize unstructured on-platform search query data to create new indexable pages automatically to increase our long-tail organic search traffic and enable broader Search Engine Optimization and Search Engine Marketing (“SEM”) coverage.

• System Security and Business Continuity :

Our infrastructure has been designed to adhere to industry best practices for secure storage and management of all sensitive data, including encryption (for data at rest as well as in transit), access logging, and internal change controls.

Physical and logical access controls are in place, and personally identifiable information is obfuscated.

Utilize third-party servers across multiple availability zones with data securely backed up in real time across multiple regions.

As our online marketplace grows, our data becomes increasingly valuable.

This data advantage allows us to develop business processes to optimize our operations, including marketplace supply, merchandising, authentication, pricing, marketing, and servicing.

We collect and share data from across the platform to improve seller tactics and help them make informed decisions about sourcing, pricing, and selling products on our online marketplace.

We use internal and external data to target, acquire, and retain qualified buyers through performance-based, data-driven marketing campaigns.

Data Security and Protection

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We have developed policies and procedures designed to manage data security risks, including employment of technical security defenses and continual monitoring of servers and systems.

Further, as part of our efforts to protect sensitive information, we rely on a variety of security measures, including encryption and authentication technology licensed from third parties.

Further, as part of our efforts to protect sensitive information, we rely on a variety of security measures,

including encryption and authentication technology licensed from third parties.

We also use third parties to assist in our security practices and prevent and detect fraud.

We intend to continue to invest in efforts associated with the detection and prevention of security breaches and any security-related incidents.

Segment and Geographic Information

We have one operating and reportable segment.

See Note 2 “Summary of Significant Accounting Policies” to our consolidated financial statements for further discussion of our operating and reportable segment.

Our business is subject to foreign and domestic laws and regulations applicable to companies conducting business on the Internet and in the resale market.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business