Etsy website takes the ‘hand’ out of handmade

by Kelly O'Brien | Mar 31, 2015

Imagine a store that sells everything. From beeswax candles and embroidered throw pillows to vintage clothing and one-of-a-kind jewelry, it’s all there waiting to be purchased.

The store is real, and it’s online; you don’t even have to leave your living room. It’s called Etsy, and since its inception in 2005, the Brooklyn-based online marketplace has been esteemed as the best place to buy and sell unique vintage and handmade goods from around the world. From the beginning, “handmade” was the key word: Etsy sellers had to make the products themselves, with an exception for curators of vintage items. However, in October 2013, the company changed its seller policies to allow the use of outside manufacturers, thus taking the “hand” out of “handmade.”

Although Wired business reporter Liz Stinson calls the policy change “a fundamental shift in the company’s DNA,” Etsy never intended it as such. The changes were meant to relieve sellers whose businesses had grown so much they could no longer handle production on their own. The old policies regarding manufacturing were unclear, leaving many sellers to avoid the use outside assistance—subsequently stunting their businesses growth—for fear of having their store shut out by the site.

Despite the change, Etsy CEO Chad Dickerson wrote in a blog post October 15 that “the one-person shop is still the heart of Etsy, and one-of-a-kind items, vintage treasures, and craft supplies all have a place in our marketplace.” Many of these one-person shops, however, saw it as a betrayal of Etsy’s original values, a blasphemous shift in ideology.

The policy change has allowed sellers to flood the site with mass-produced merchandise.

A number of sellers also complained about knockoffs, and multiple stores selling the same “one-of-a-kind” product; one Ottawa-based seller, who also shops on the site, described looking for a purse and finding three images, side by side, of the same bag. Most of these sellers saw it as a sign it was time to pack up and move on.

In the weeks and months after Etsy announced these changes, Stinson says the Australian e-commerce site Zibbet saw its transactions double, as the site positioned itself an alternative to Etsy. Zibbet was opening its arms to those “pissed off” sellers looking for a new home.

Stinson says, “People were like, ‘What the f*@k? If Etsy is not going to uphold this ideal of handmade, then I’m going to go somewhere else that does, somewhere that puts the makers first.’”

The initial outcry faded quickly after the most outraged sellers left the site. But a year later, as the dust settles, the question remains: Has Etsy passed the point of no return?

Little guys are losing

Samantha Brazeau-Wilson, who runs Birch Jewelry on Etsy, says she doesn’t like to think so, but has doubts about how long she can wait for proof the company’s decision was the right one; she says she saw her sales plummet after the policy changes, and they still haven’t bounced back.

“There are many benefits from supporting the handmade community, but not everyone sees the advantages,” she says. “It comes down to convenience, availability, and price. Someone who uses an outside manufacturer will more than likely come out on top over someone who takes the time and effort to create something themselves.”

This crafting-disadvantage is not the only drawback of the company’s new handmade policy. Sellers must apply to Etsy’s Integrity, Trust & Safety team to have their chosen manufacturer approved, and while the company does review the seller’s role in the design process and their relationship with the manufacturer, Etsy does not vet the manufacturer themselves. It is the seller’s responsibility to choose the type of manufacturer they’ll partner with. This gap in the policing of manufacturers has allowed sellers to flood the site with mass-produced merchandise.

If Etsy sellers and manufacturers are caught falsifying their product by the Integrity, Trust & Safety team, their store will be shut out. But according to a number of sellers, there is no system in place to prevent such sellers from opening a new store under a different name.

Brazeau-Wilson says leaving the production standards of the manufacturer in the hands of the seller will likely cause more harm than good. “Not everyone stays faithful,” she says.

Despite sending some users and sellers away, and inviting some not-quite-handmade products in, the policy change has allowed Etsy to become a force to be reckoned with. In 2013, the site went from 800,000 to 1 million active sellers, and from 22 million to 40 million users, with sales totaling over $1 billion US.

Compare those 1 million sellers to the 6,500 on Zibbet in 2013, and it’s easy to see why those who remained after the initial exodus will be sticking with Etsy. According to Stinson, for the site to reach this size and level of financial success, change was inevitable.  She says the size difference is unfortunate for a “new kid on the block” like Zibbet, but says it’s important to remember “it makes a lot of sense to use the platform where more eyeballs can see your stuff.”

Despite the drop in her sales, Brazeau-Wilson says she’s still more likely to make a profit on Etsy because of the huge number of consumers who visit the site. At the end of the day, she says, “there are still shoppers out there that can appreciate a good handmade product and will pay that little bit extra to support the handmade community. That, to me, is enough.”

Etsy CEO Dickerson wrote in October 2014 that Etsy “knew that not everyone would embrace them,” but believed the changes were essential for the company to continue to thrive. To thrive, Stinson says, a company has to make tough decisions. In Etsy’s case, this meant risking the loss of its authenticity.

“Companies have to be able to grow in whatever way they see fit, and sometimes that means alienating people,” she says. “It’s just a fact of life.”

Same appearance, changed content

On the surface, the policy change doesn’t seem drastic; the purchasing and shipping processes remain the same, and regular users can still easily find their favourite sellers. But in the 17 months since the change, shoppers have seen a difference in what they put in their carts.

Hillary Allaire, a student at the University of Ottawa, says she started using Etsy in high school, originally supporting a friend’s store and gradually finding local clothing designers she would buy from regularly.

Now, she says, she buys almost exclusively manufactured goods on Etsy. She says she often heads there in search of screen-printed t-shirts with “funny or stupid things on them,” to wear to concerts or parties where she just needs something “quick and cheap.”

“I know they’re mass produced and the quality isn’t good, but it’s basically the same as going to a store like Forever 21,” she says.

‘Someone who uses an outside manufacturer will likely come out on top.’ – jewelry maker Samantha Brazeau-Wilson

The policy change has not ruined all aspects of Etsy. Etsy is still the site where you can buy beeswax candles, embroidered throw pillows, vintage clothing and one-of-a-kind jewelry. But now you can also buy purses mass-produced in Malaysia or Indonesia. The one thing you won’t find, however, is the eclectic, community feel Etsy built its empire on.

When he announced the policy changes to a room full of Etsy sellers in fall 2013, Dickerson said Etsy “is all about creative people building businesses, connecting people through commerce, and making items that have stories behind them. Etsy is not just another e-commerce site, and we never will be.”

But following the policy changes, Etsy has become the store that has everything, just like eBay.