When Etsy loses its reputation for authenticity, it loses its competitive advantage, it loses its customers’ trust, and it loses its raison d’etre. Will Etsy survive the deluge of resellers – and the exodus of artists, craftspersons, and sellers of genuine vintage?
To recap: Last weekend, Etsy – the premier platform for selling and buying handmade items online (as well as vintage items and craft supplies) – gave a coveted “Featured Seller” spot on its blog to a person who imports furniture from a wholesaler in Indonesia and re-sells it on Etsy. The seller was revealed as a reseller by the blog Regretsy causing an uproar among the current and former sellers on Etsy who believe in the site’s original mission.
Reselling is against Etsy’s written policies. The relevant excerpts from the policies are (emphasis added):
- With the exception of Vintage and Supplies, categories on Etsy are for handmade items. Handmade items must be created by the seller operating the Etsy shop (or a member of that shop).
- To be considered handmade, the seller must substantially alter the design of an item produced from a “ready to assemble” kit.
- You may not list handmade items that you (or a member of your shop) did not create. This is considered reselling and is not permitted.
- An assistant, under the direct supervision of the seller, may: assist with a portion of the creation process, list items in a shop, ship items, communicate with buyers, accounting or other record keeping.
- An assistant or third-party vendor’s involvement may not comprise a majority share of a handmade item’s creation.
You may wonder why legitimate Etsy sellers are so outraged. I outline a few of the reasons in this post (more to follow!).
Resellers represent themselves as makers of handmade items when they are not. Resellers buy new items in bulk from a wholesaler or a factory in the developing world and sell them as-is, with no alteration, as “handmade” by their own hand. They buy “vintage style” and “antique style” new goods and sell them as real vintage and real antiques.
Resellers on Etsy also rake in the sales. Experienced shoppers easily recognize their wares as not-handmade and not-vintage, but resellers on Etsy nevertheless make big bucks. Some shoppers buy from the resellers simply because they like the item and it is cheap – especially the items that were purchased wholesale from factories in low-income countries.
Some many people buy their items because they are suckered in by a fake “handmade” story. They believe what they are buying is unique, and that they are supporting an individual artist or artisan.
Certainly there’s no law against buying “junk” jewelry at rock bottom prices, or clothing that was made in a factory. But that is not what Etsy is for… it is not what Etsy promises.
Genuine artisans have built the cache of Etsy; they’re the reason (along with the sellers of genuine vintage items and supplies for crafters) that Etsy has a high profile and ever-increasing level of traffic. People come to Etsy because they are looking for “the real thing.”
This is the Etsy that certain venture capitalists (VCs) invested in.
How do resellers harm the legitimate Etsy sellers?
Resellers ride the coattails of the sellers of actual handmade and vintage items. Most customers come to Etsy because of the brand built by the legitimate sellers. Resellers divert these customers to their own shops for the following reasons:
1. They are able to stock their stores with exponentially more products than sellers of actual handmade and vintage, because the resellers’ goods are mass-produced and currently in production. Handmade items take more time to make; vintage items are more scarce. Because they have more items in their shops, they are easier to find in searches and can often dominate search results.
2. They undercut the price of genuine handmade and vintage, because the wholesale products are mass-produced under who-knows-what conditions – and thus cheaper – and because unlike vintage they are not scarce.
3. Resellers tend to turn off buyers who are disappointed to find out that their “unique” purchase is also available in large quantities on Overstock.com, or is factory-made. These buyers don’t come back to Etsy, and they tell others to stay away too.
Many of us suspect that Etsy’s decision-makers condone reselling on Etsy, so long as the shops are popular and their products have the Etsy “look.”
We suspect this because there are prominent examples of shops who are clearly reselling – and have been for a long time – and have been reported for violating the rules multiple times – yet are still conducting business on Etsy. Resellers have appeared in Etsy’s Front Page showcase, in the Etsy newsletters, and now, even in the Featured Seller spots.
We suspect Etsy condones resellers because the decision-makers, in thrall to the VCs, want to maximize short term profit in advance of the IPO, and because they simply want to make as much money as possible off of Etsy and then get out (or move on to their next CEO job). (Etsy does not charge sellers a monthly fee, but rather collects a percentage of sales revenue).
We suspect they do not care about the long term viability of Etsy, which depends upon its reputation for authentic handmade and vintage items.
Authentic handmade and vintage is Etsy’s brand. That is its competitive advantage, its special niche.
There is no reason to go to Etsy to buy handmade-looking furniture when one can get the same thing from Overstock dot com.
No reason to buy that vintage-looking dress here when one can get it on sale at Anthropologie.
No reason to buy those fancy factory-made candles here when on can drop into a Pottery Barn after work and pick some up. And so on.
On Etsy, as on eBay, you buy from individual sellers who are responsible for shipping, returns, exchanges and so on.
If the only difference between Etsy and big retailers like Overstock / Anthropologie / Pottery Barn is that on Etsy you are purchasing from a stranger you never heard of, while on Overstock / Anthropologie / Pottery Barn you know your item will be shipped on time from a well-stocked warehouse, and you can return it, and the company isn’t going to disappear into the night with your money — people will choose the seller they know and trust.
And that seller will be the corporation with the money to advertise their brand, not the individual seller on Etsy that no one’s heard of.
Etsy refuses to acknowledge that giving a blog feature to a reseller was a mistake, and they have not removed the reseller’s shop. The continuing silence from Etsy’s decision-makers is deafening. They clearly do not care enough about our concerns to issue any kind of meaningful statement, much less open a real dialogue.
They continue to put mid- and low-level staff in the line of fire by having them write meaningless platitudes to commenters in the Etsy Forums — setting these staff up for ridicule and insult on other websites. Staff who use their own first names and actual photos when moderating threads. While the decision-makers and the VCs count the money in relative anonymity.
Etsy’s CEO, Chad Dickerson, hasn’t said a word about this situation. Its hard to imagine any other business in crisis electing to make junior and mid-level staff the public face of the company.
Perhaps needless to say, I have very mixed feelings about selling on Etsy right now. I’m thrilled to consider myself a ‘colleague’ of so many amazingly talented, earnest, and hard-working sellers.
On the other hand, I don’t like the nagging feeling that I’m participating in the deconstruction of a once proud and promising company, or helping that company deceive unwary shoppers.
We are caught between a rock and a hard place – the most vulnerable people right now are the individual artists and artisans and vintage sellers who depend on Etsy for their income. Abandoning the site means abandoning them. On the other hand, it is increasingly difficult for the average shopper to distinguish who is legit and who is not.
More to come….