The Rise and Fall of Etsy: Yet Another Victim of the Allure of Mass-Merchandising Structure

A new poll amongst Etsy sellers shows 41% of Etsy shops are receiving less views, visits and sales because of Etsy's recent policy changes regarding factory-produced products.

Las Vegas, NV - March 27, 2015 - (Newswire.com)

Since its introduction in 2005, etsy.com has proven itself a powerful online promotional tool for artisans seeking an alternative method of marketing handcrafted goods. Their foundation was built upon crafters who painstakingly created each of their items by hand. With all the handcrafted items collectively appearing in one place, the Etsy website, shoppers from around the country had a platform where they could find unique and fun items they otherwise would not have access to. It was a way to collect exotic jewelry, prepare for weddings, and dress a baby up for their first photo shoot. In fact, since its creation, Etsy has grown into a community of 20 million users with 1.4 million active sellers.

However, these impressive statistics are fast being threatened by none other than the very force that Etsy was originally seeking to counteract; the inevitable money-making appeal of mass-produced goods. The hard truth is that each Etsy shop owner who handcrafts each product has a limit on how much they can produce. Though the individual shops were not money-making machines, the community as a whole was, raking in almost $200 million in 2014 alone for Etsy.

But Etsy is now facing an identity crisis as sellers become more and more angry at Etsy’s policies to allow factory-produced products, even though conditions have to be met to do so.

In 2014 Etsy increased its marketing budget by 122 percent to advertise “value craftsmanship, artistry, uniqueness, authenticity and sustainability.” But in Etsy's recent IPO Chief Executive Chad Dickerson, wrote that Etsy is “diluting our handmade ethos” by allowing sellers to work with manufacturers.

Indeed, since Etsy relaxed the rules of mass-production in 2013, artisans and purchasers are now becoming bombarded by the onslaught of mass-produced products which are offered alongside quality handcrafted goods, making it increasingly difficult for handmade items to compete with the drastically lower prices of such comparable, factory-produced products sold at a fraction of the cost. A mass-produced crochet hat easily sells for $5 on Etsy, while a handmade crochet hat typically goes for $20 because it requires several hours of labor from the shop owner. 

Rather than fight the sellers who listed mass-produced items, Etsy welcomed it. This change attracted critics who pointed out that Etsy was turning into Ebay. It encouraged Chinese manufacturers to sell their products on Etsy which caused a major uproar from original Etsy sellers for numerous reasons. No true crafter can compete with cheap goods and shop owners felt betrayed by the website which was originally created for them. Many even pointed out that the website title still reads, “Your place to buy and sell all things handmade, vintage, and supplies.” 

An excellent example of profiting from sweat shops is Alicia Shaffer from the Three Bird Nest shop. After the company changed their policies an article was published about Shaffer and her success on Etsy. Shaffer was generating over $65,000 a month by importing goods from Aliexpress.com and Alibaba.com and then selling them on Etsy. These goods looked handmade, but were listed at an affordable cost which drew in unsuspecting buyers. When this article hit Facebook comment after comment was posted from outraged crafters expressing their betrayal. 

Original sellers are increasingly complaining of dropped traffic to their shop’s pages and making either fewer sales or none at all. As a result, the majority of original sellers are leaving Etsy to sell products on their own websites. These sentiments are further expressed through polls and interviews published by Rich Mom® amongst Etsy shop owners. When asked if Etsy’s recent policy changes affected views or sales negatively, 41% said yes, 41% were not sure, and 17% said no. However, 76% stated that they did not support Etsy’s new policies and when asked to describe in one word how shop owners felt about Etsy, repeated responses included: unfair, disappointed, betrayed, frustrated, unsure, sellout, disgusted, unforgivable, devalued, cheated, indifferent, and annoyed.

In a recent interview with Alane Clark, Alane described how she sold a crocheted football baby hat as her first product on Etsy, but quickly learned about the fierce competition she was up against. She stated that the new mass manufacturing policies have forced her to start her own website.  

“A lot of potential customers on Etsy ‘favorite’ my items, but rarely come back to buy.” Alane said in an interview.

Thus, Alane decided to become independent of Etsy and just recently launched AlaneMarie.com.

“I can more easily tell my story there without the distractions from so many other shops.” Alane said.

Leilani Howard also decided to move her business, Rolani’s Wonderland, away from Etsy’s crowded hallways. As a mother of five, Leilani admits her number one struggle is balancing between work and family. 

Leilani didn’t have time to worry about the overwhelming saturation of Chinese manufacturers on Etsy, so she ventured out on her own and created RolanisWonderland.com. Her site launched just a few weeks ago.

“I hold a lot of respect for artists featured on Etsy. Nevertheless, opening a new tailored website for my business was inevitable in order for Rolani’s Wonderland to grow.”

Even more recently, Aubrey Hill from Blossoms and Billows stated that she was creating her own website as well, which will launch later this year.

Aubrey’s first business transaction was selling a set of Christmas cards to her grandmother. Now she believes she also must move away from Etsy in order to flourish. 

“My journey so far has been one of hope, sacrifice and extreme passion,” Hill said in an interview. “I cannot wait to see how my interpretations of the world continue to take me to places I’ve never dreamed!”

Alane, Leilani, and Aubrey are not the only ones venturing off to build their business, though. A recent Rich Mom Business poll indicated that more than 60% of Etsy shop owners plan on starting their own website within the next 12 months.

In addition to seller complaints, Etsy is now starting to see buyer complaints. Any customer using the search tool on Etsy now has to sieve through numerous product pages just to find a true, handmade item.

To complicate things further, Etsy announced its intention to go public in 2015. Rupert Neate of The Guardian (2015) reported in February that a ferocious debate was sparked between Etsy and its sellers after it claimed to be preparing for an initial public offering of its shares. 

This has resulted in a mixed reception from its sellers. Some are excited by the opportunity to buy shares whereas others are concerned that listing the shares on the stock market is going against the website’s founding purpose, accusing it of “selling out to make money.” However, the argument stands that Etsy already sold out when they accepted mass-produced products on their website.

Eerily, Etsy’s IPO itself might foreshadow the impending fall of Etsy because of this controversy amongst members.

The IPO states “The authenticity of our marketplace and the connections within our community are important to our success. If we are unable to maintain them, our ability to retain existing members and attract new members could suffer.”

As the struggle to redefine Etsy’s identity by its leaders continues due to their focus on profit margins, the majority of successful crafters are leaving Etsy and opting to concentrate on their own websites. Empty shops on Etsy are increasing with each passing month, further showing the site’s downward trend. Whether Chinese outsourcing overtakes the website or the local sellers all close shop, the fact remains that Etsy’s current path is one of destruction or … Ebay.



Contact Info:
Freelance Journalist

Press Release Service by Newswire.com

Original Source: The Rise and Fall of Etsy: Yet Another Victim of the Allure of Mass-Merchandising Structure
Data & News supplied by www.cloudquote.io
Stock quotes supplied by Barchart
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.