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How Etsy Alienated Its Crafters and Lost Its Soul

How Etsy Alienated Its Crafters and Lost Its Soul WIRED


That Etsy began allowing manufacturing partners in 2013 underscored the reseller issue that has plagued the site for years. The Marketplace Integrity, Trust & Safety team—which has the unenviable task of policing sellers for adherence to Etsy rules—is unable or unwilling to weed out sellers of mass-manufactured goods. And having sellers who are able to move nearly a million dollars of product a year is great for Etsy’s bottom line.

Sellers have been dissatisfied with Etsy’s policing of mass-manufactured items posing as handmade for a long time, but the site hasn’t seemed receptive to their concerns. An Etsy staffer I met a few years ago dismissed sellers’ questions about Chinese resellers as “kind of racist.” The snark site Regretsy (RIP) was one of the few big gathering places where sellers and shoppers could voice their frustrations with the marketplace. Any kind of “calling out” of accused resellers or bad businesspeople on Etsy’s forums is usually acknowledged by an admin shutting down the thread with “I’m going to close this up now.”

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A Bigger Market Isn’t a Better Market

There are more than 30 million items listed on Etsy right now. That popularity is, of course, great for Etsy. But new hobbyist sellers, desperate for clicks, often price their products so low as to make real profit an impossible dream.

And that popularity isn’t good for shoppers, who have to wade through pages of crap to find what they’re looking for. Searching for “mermaid” in the wedding gown category of Etsy returns 1,299 results, ranging from a $6,882 gown made by Project Runway’s Leanne Marshall to dresses for less than $200, one purportedly handmade lace dress going for $65. (For those who aren’t up to date on their fabric prices, the materials to make a wedding dress alone would cost at least $65.) A friend and I recently discovered we both always sort results by highest price when we’re searching on Etsy to see only the serious sellers. What other e-commerce sites can say the same?

Etsy needs casual crafters to keep paying the 20-cent listing fees and, if any of the items sell, the 3.5 percent transaction fees and any additional payment processing fees. (See “She’s Making Jewelry Now.”) Etsy doesn’t disclose its finances, but it facilitated $1.35 billion in sales in 2013, which adds up to more than $47 million in transaction fees, not counting listing or payment processing fees.

She's Making Jewelry Now:

Etsy Has Homogenized Indie Craft

From the beginning, Etsy has pushed the “quit your day job” storyline. The fact is, the majority of the people selling on Etsy aren’t running their businesses full-time, and the idea of quitting your day job is a manic pixie fever dream. If you want to make it big on Etsy, you don’t necessarily want to make things that fulfill your creative dreams; you just want it to get onto the front page and sell like hand-felted hotcakes.

The Etsy effect on craft trends is striking. At the San Francisco edition of the Renegade Craft Fair in November, I was struck at how most things look like the homepage of Etsy, pinnable, pretty things. (See “Put A Bird On It.”) It’s so incredibly boring. How many pieces of geometric jewelry with a pop of color can the earth bear? Will we ever see hand-drawn logos without antlers and arrows? How much barn wood must we salvage to atone for our crafty sins?

Successful Businesses Leave Etsy

The biggest secret is this: Makers who have what it takes to succeed—good product, a good marketing plan, a pricing structure that compensates everyone in their supply chain fairly—don’t really need Etsy for long.

Etsy is the fifth most-visited marketplace site in the U.S., after Amazon, eBay, Walmart and Best Buy. But for that visibility, sellers have little autonomy in the store’s design, and are subject to the site’s rules, fees and design. A customer complaint can freeze your payment account. An accusation of copyright violation can freeze your store or shut it down entirely.

For a full-time crafter, that’s too much of a risk. Successful makers of a certain size eventually move to e-commerce platforms that give them much more flexibility and control for fewer fees. If you’re working in high volume or high price points, using a customizable ecommerce platform such as Big Cartel or Shopify massively reduces your fee obligation, as I outlined in a comparison chart.

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