Robert Kalin had made fully functional “inside-out computers,” which were encased in oak and covered with a transparent orange lid so the machine’s guts are visible. When he could not find a good place to sell them online, he decided to create one.

Since it was founded in 2005 as a way for hobbyists and crafts people to sell their goods, Etsy.com has blossomed into a thriving e-commerce site and one of New York’s hottest start-ups. The company says it expects to bring in $30 million to $50 million in revenue this year and has been profitable for a year. It has seven million registered users, nearly twice what it had a year ago.

Mr. Kalin said the site was catching on because many people now want their buying habits to reflect their values, as indicated by the surging interest in farmers’ markets and local clothing designers.

“It’s not just ‘You are what you eat’ anymore,” he said. “You are what you buy, and these things define you.”

Mr. Kalin, 30, and his partners, Chris Maguire and Haim Schoppik, started Etsy in Mr. Kalin’s Brooklyn apartment . Even now, Mr. Kalin is one of the site’s most prolific patrons, regularly snapping up items like custom three-piece suits, intricately woven wall tapestries and ceramic sculptures of doves.

Etsy says it is on track to handle close to $400 million in transactions this year, more than double last year’s figure. That pales in comparison to eBay, still the king of person-to-person online sales. But eBay, which came to prominence in the dot-com boom, has gone from resembling an overflowing garage sale to being something closer to a superstore in the eyes of many shoppers. It has alienated many of the smaller sellers that were once its lifeblood.

Mr. Kalin says his company’s focus on community and independent sellers will help it avoid eBay’s missteps. The troubles at eBay, he said, were “a symptom of our times . They looked to maximize profitability over community.”

Mr. Kalin points to the growing abundance of polished, high-end items from professional designers, furniture makers, confectioners and jewelry makers who are able to make a living by selling their wares through Etsy.

“You will find things on Etsy that you won’t anywhere else, ” he said.

The site is meant to resemble a funky boutique. Merchants can design virtual storefronts , and many feature stylized photos and descriptions of their offerings.

The folksy appeal of Etsy’s site creates a kind of intimacy between buyers and sellers, said Rachel Botsman, co-author of the book “What’s Mine Is Yours: The Rise of Collaborative Consumption.” And shoppers can feel good because the experience is similar to supporting an independent crafter or local artist at a flea market.

“Some people are more interested in buying an item or a good with a story behind it,” Ms. Botsman said.

Many who make a living or supplement their income by selling goods online say they like the tight-knit community feel of Etsy, which offers online forums and real-life gatherings for members.

Lori Hammond, a 49-year-old retired bakery manager living in Portland, Maine, said, “The vibe is like sitting in a room with crafters, drinking tea and laughing.”


By JENNA WORTHAM