Episode 180: Taking Collective Action, with Kristi & Chiarra of the Indie Sellers Guild (part 1)

Welcome to Clotheshorse, the podcast that spends a lot of time thinking about where Etsy went wrong…

I’m your host, Amanda and this is episode 180! Today’s special guests are Kristi and Chiarra, board members of the Indie Sellers Guild, a nonprofit dedicated to providing education and support to all online creative indie sellers around the world.   The Indie Sellers Guild got its start in 2022 while organizing the Etsy Strike,  when about 17,000 shops put their Etsy storefronts on vacation mode, meaning that customers could not shop from them. Today Kristi and Chiarra will be telling us about what led to the Etsy strike, the outcome, and what they are working on now.  This is part one of our conversation and I’ll be back with part two next week.

Before we jump into that, let’s travel back in time for a moment.  Not too far, just August of this year…when I asked you to submit audio essays about your relationship and experience with shopping secondhand and the Secondhand First way of life.  Now, September got kinda wild, mostly because my series on the history of fast fashion turned into a much bigger project.  And I couldn’t share them then. So…now I’m going to be sharing them over the next few episodes!

This week’s audio message is from Frances.  Let’s take a listen!

Coming soon

Thank you Frances for taking the time to share your thoughts and experiences with us! It actually reminds me of a very sad story involving a suede cape.  Not just any suede cape…the most perfect suede cape ever.

So while, we’re on the topic of audio essays (and not suede capes), it’s time to announce the return of a Clotheshorse tradition:  

If you’ve been hanging out around here long enough, then you know that I firmly believe that small business is the future. In fact, the future DEPENDS on smaller, more ethical businesses. Yes, not every small business is owned by a saint. Some owners are terrible bosses, sell bad product, or just DGAF about their communities. And if they are bad, skip them! But even the worst small businesses have significantly smaller impact than the big baddies like Amazon or some of my past employers! And the fact is, most small businesses are run by people you know and they are just trying to make a living while doing the best job they can.

No matter how you feel about the winter holidays, it is an important time of year for small businesses. Last year I started a few traditions around here for the “holiday shopping season.” I featured audio essays in each episode of the podcast in November and December. Clotheshorse has grown a lot since then and our community wants to support small businesses in any way possible. So this can be some great exposure (for free) to a bunch of rad people!

Okay, so what is an audio essay?

It’s a recording you make–using either your phone or your computer. You email it to me at [email protected], and I edit it and mix it, and add it to an episode. 

It’s not an ad…it’s your story and feelings about owning a small business, including:

• What motivated you to start a small business?
• Why it’s important to you, what you do, and why you do it.
• What have you learned?
• And of course, I want you to include information about your business and where listeners can find you.

Write out what you want to say before you record it. Try to fit it into 5 minutes or less.

It’s okay if you make a mistake while recording, just say that part again and keep going. I’ll edit out the mistake!

Record in a quiet room away from fans, air conditioners, bus stops, and howling hound dogs.

Be sure to double check your recording before sending. Yes, I have received fully silent recordings.

When you email it to me, include your name, pronouns, and IG handle.

The deadline for this project is November 1st  and it is a  first come/first served situation.

Okay, so last year, I did a four part series on the rise and history of Etsy called (embarrassingly enough) “The Etsy-sodes.”  I would urge you to go give those a listen if you have not yet because there is so much detail.  And Chiarra actually references them a few times in our conversation today.  I think it will also give you a much bigger perspective on why the way Etsy has been working for the past few years has been out of line with the original vision and mission of the company.  

Etsy was founded by a young guy, Rob Kalin, back in 2005.  He wanted to create a platform that functioned like eBay (in that it connected individual sellers with customers, eBay was groundbreaking for making that idea possible and then completely normalizing it…in fact, without eBay, you don’t have Depop, Poshmark, Mercari, etc), by connecting makers with customers.  While it was a build of slow build for Etsy at first, the company received  a lot of positive attention for constantly adding features that would make it easier for makers to build a strong small business. And the idea of fostering small businesses and community were key components of the Etsy philosophy. In 2010, Kalin told the Wall Street Journal that his vision for the company had always been  “Instead of having an economy dictate the behavior of communities, to empower communities to influence the behavior of economies.” And early Etsy walked the walk.

• The company had these “Street Teams,” crafters who organized around things like better booth rates for art fairs and pop ups. 
• It held entrepreneurial workshops for its sellers with names like “how to grow your global microbrand.” It offered shop critiques, taught its sellers how to write press releases, showed them the best practices of its most successful sellers.
• It had its own “magazine videocast” called the Storque, which the New York times called a “DIY business school.”  
• Kalin also hired the best Etsy sellers to literally work for the company in the hopes of being able to share their skills as both crafters and entrepreneurs directly with all of the sellers using the platforms.
• The company also held weekly craft nights at their offices, had a book club and created Etsy Labs, a community-focused program that taught craft and business skills to the public

Now what’s interesting about all of this is that from the very beginning Kalin was taking investment money from VC (venture capital) firms.  And that kind of funding comes with serious strings attached, specifically the promise of exponential growth and maximum profitability.  And in many situations, that means profits are prioritized over people from day one.  But Kalin was able to build this community aspect, really lifting up sellers, for a few years. And this stuff is expensive to do!   Maybe the investors felt that it was good PR, all part of brand building.  Or maybe it was still so early in the ecommerce era that they just weren’t expecting profitability quite yet.

But by late 2007, just a few years later, Etsy was running out of money.  Fortunately it raised another $27 million in investor funding in January of 2008.  That’s a ton of money, but Etsy was also valued at $90 million at this point.  This round of funding was led by Jim Breyer–a venture capitalist and board member at Facebook and Walmart–and leading this round of funding earned him a seat on the board of Etsy.   This marked a major shift in the strategy and operations of Etsy…and sellers were not thrilled about the Walmart connection.   In 2008, we weren’t living in the depressing, frightening world of Amazon…so Walmart was the most evil company any one could think of…and to be fair, sometimes I get angry that Amazon has made people forget just how terrible Walmart is for both small businesses and workers all over the world.  What would this mean for the community that Etsy had created and nurtured?

To quote Vox writer Kaitlyn Tiffany, “Suddenly, a better life for crafters could not be the company’s only goal. It also had to make serious money for some people who are pretty serious about their money.”

And a lot of change happens over the next few years:

• Rob Kalin–the founder–is pushed out of the company in 2011.
• In 2012, the company becomes a certified B corp
• In 2013, the company begins to allow manufactured products–meaning not all made by one individual–to be sold on the platform. Of course resellers began to flood the site, and more and more long time sellers left the platform. But Etsy had to allow the inclusion of manufactured product because they had hit a ceiling in terms of sellers and potential customers and frankly, sales.  And investors wanted a return on their investment. They would get that big payday just a few years later…
• In 2015, Etsy becomes publicly traded company, , saying, “Etsy’s strength as a business and community comes from its uniqueness in the world and we intend to preserve it. We don’t believe that people and profit are mutually exclusive. We believe that Etsy can be a model for other public companies by operating a values-driven and human-centered business while benefiting people. Financial success is important for the company, because that is what allows us to reinvest in our platform and grow our business sustainably — just like the businesses who have a home on Etsy. When our sellers succeed, our business succeeds, which leads to value for our shareholders.”
• Now going public puts even more pressure on constant growth year over year over year, along with maximum profitability.  Yet more and more conversations were being had about the state of Etsy: it was full of knockoffs, with more and more manufactured items on the site there was little transparency around the supply chain (and there were lots of conversations about products being made with child labor and just general human exploitation).  
• About a month after going public, Etsy stock prices tank as it was revealed that as many as 2 million items for sale on Etsy — about 5% of all the goods on the site — could be counterfeit or violate trademark laws. Furthermore, this rampant reselling and theft of intellectual property was causing a surge of etsy sellers to leave, heading off to their own websites, shopify, big cartel, etc. 
• This leads to a whole bunch of corporate drama–go listen to the etsysodes for the full story–and a reorg in terms of leadership.  
• Leadership continues to kind of not fix the reseller issue, while also not delivering on other promises made to sellers, like better search functionality and seller support.
• And in 2017, after 20% of the staff was laid off, Etsy employees circulated a petition asking Etsy to “Stand for more than just Profits, saying, “We believe these changes represent a move away from Etsy’s mission and values, and we are feeling uncertain about what the future holds for us as Etsy employees and for Etsy’s community of creative entrepreneurs.”
• Also in 2017, Etsy loses its B. Corp certification, with CEO Josh Silverman saying, that Etsy “had the best of intentions, but wasn’t great at tying that [sales] to impact….Being good doesn’t cut the mustard.”
• What happens next? A fee increase, advertising fees, so much more….and we’re going to talk about that today.Once again, I urge you to go listen to the Etsy-sodes for so many more details.

Okay, let’s jump into my conversation with Kristi and Chiarra!

Coming soon

Thanks to Kristi and Chiarra for spending some time with me! They’ll be back next week to share more of the stuff the Indie Sellers Guild is doing, including something really important that involves how some sellers are being paid! It relates to the “reserve” that Chiarra mentioned.  In the mean time, go join the Indie Sellers Guild. I did! I’ll share links to the do that in the show notes, as well as how you can take the marketplace research study, and share your own stories about unethical Etsy sellers!