Episode 93: The Etsy-sodes (part IV): When Were The Good Times?

This morning I read a long essay written by a born-and-raised Portlander about the moment he decided he would never move back there…and it filled me with a sense of longing for a time, for a version of Portland, Oregon that I was lucky enough to experience, but not longer exists. The good olde days if you will. I know all of you listeners who grew up there or lived in the aughts know these good olde days of which I speak. A pre-Portlandia era. The tv show, not the statue downtown. An era of cheap rent, house shows, only like maybe two fancy restaurants in town, numerous cheap places to get a vegan greek salad or a burrito. Dancing at the Tube or the Dunes. The Value Village out in Hollywood that is now a Grocery Outlet. I still grieve for the loss of this magical time in this magical place, and I worry that I”ll never experience something that magical ever again.

And I wonder–and I would pose this question to all of you long time Etsy sellers who are listening to this—was there ever a golden era of Etsy? A moment where everything was just right? Where you felt empowered, supported, excited? We know that often as things grow in popularity (like Portland), that as more people move in (like Portland) the magic disappears, things get to expensive, the cool people leave, the treasures disappear, and everyone who was around for it feels a mixture of bitterness and longing. Did that happen for Etsy? Because I haven’t been able to find it in my research. And I’ve been reading, researching, and writing about Etsy for about 80 hours now. I just can’t find that moment where everything felt magical and exciting. The kind of moment we all carry with us for the rest of our lives after we’ve experienced it, feeling lucky that we got to have it, while also worrying that we’ll never feel that way again.

Welcome to Clotheshorse, the podcast that still fondly remembers shopping at Rad Summer, eating vegan greek salads at Dots with my best friend Reyna, and getting too drunk at The Tube to ride my bike home (and then walking 50 something blocks home). I’m your host, Amanda. And today we’re going to wrap up the story of Etsy, at least for now.

HI everyone! This is episode 93…the fourth and while not completely final installment in the Etsysode series, it will be the last one for a bit. I have so much great recorded material with all kinds of amazing guests that I must share with you ASAP…so while there are things I haven’t even had a chance to discuss yet–like Regretsy–I promise we will be coming back to this in the future!

There’s still so much to cover, so let’s just jump right in!

Let’s pick up where we left off: It was *finally* late 2008. Rob Kalin the 28-year old founder and CEO of Etsy, had stepped down, with Maria Thomas moving into that role. Kalin was working on something called Parachute, which was sort of like a business incubator for Etsy sellers. He was no longer involved in day-to-day operations. Two other longtime members of the team, Haim Schoppik and Chris Maguire, also left Etsy.

In an interview with Guardian’s Tech Weekly podcast, Thomas admitted that Etsy had a lot of challenges to hash out before it could truly reach its potential: and one of the biggest at that point was fraud. Sellers were popping up who were selling direct copies of other sellers’ designs and products.

She said, “”We have to learn from eBay and Amazon about planning for the long term. We’re going to be investing and learning around the issue of fraud. Etsy will, as a venue, do the best we possibly can to prevent those things from happening.”

But Thomas also admitted that yeah, the site was glitchy. And yeah, the customer service was virtually non-existent. And yeah, the search was horrible. And so on. And to be fair, these kinds of problems are really common with a growing ecommerce company. Kalin himself remember had never run another tech company, he certainly had very little experience in any of these issues, and he would tell the Wall Street Journal in 2010, “[Entrepreneurs] focus on the plan first, and they have it backwards in my opinion.” His feeling was that the idea was most important, and that everything would fall into place…and this was that time. When things weren’t not falling into place and that needed to fixed ASAP if Etsy were to not only grow its business, but hold on to the sellers and customers it had. And with more than 1.3 million registered users, it was still a tiny baby in comparison to Ebay, but people were talking about Etsy as a successor to Ebay.

So Maria Thomas knew it was time to fix everything. And that would mean making some important hires.

That started with Etsy’s new Chief Technology Officer (CTO) Chad Dickerson, who came from Yahoo. On Dickerson’s first day at Etsy, September 2, 2008…and in that first week, the site went down for an hour. Which to be fair–was not uncommon in 2008. I was working for a massive retailer that year and I swear a site went down for hours or days every couple of months. The internet was weird and kinda not that great back then!

Dickerson told The Cut years later, ““No one could tell what was going on, and that was kind of a taste of what was to come. The technology was a mess. Coming into Etsy was like walking into a room full of ticking time bombs, and I had to defuse each one in the right order.” And he got to work… he hired a ton of superstar coders and they began to fix and improve the site.

2008 ended up being a great year for Etsy: the recession fueled more interest in craft and handmade gifts, lots of vintage sellers moved over to Etsy from Ebay, surely Maria Thomas’s leadership had a positive impact on the day-to-day operations of the business, and certainly Chad Dickerson’s new team of devleopers and engineers were making the site crash a lot less…and so Etsy ended up doing more than $87.5 million in sales that year. Sounds impressive, right? But just keep in mind that Etsy only pocked about $3 million of that in the way of its 3.5% commission and listing fees. And earlier that year, the company had taken $27 million in investment…so, they had a long way to go before they could start making it all worthwhile for the investors.

In April of 2009, Etsy seller Susan Schumann, aka schugirl, suggested that all Etsy members unite to collectively promote Etsy on April 24th. This would be called Etsy Day Sellers made signs for their cars, left flyers at coffee shops, tweeted a ton, made youtube videos, put signs on their dogs, and met up to hold signs at key intersections. While Etsy was clear to say that this event was *not* sponsored by Etsy and instead was just a project that was put together by a bunch of really enthusiastic sellers, it certainly promoted participation heavily on its blog, saying things like, “We here at Etsy love you for working together to create a really exciting opportunity for us all. We will be reporting the guerilla marketing on Friday and we challenge YOU, buyer, seller or fan, to shout “Etsy!” from the rooftops. Get the Etsy name out there in the brightest, sparkly-est, boldest way you can think of! Make sure to record your efforts with video or photos (if you upload photos to Flickr, making sure to tag them “Etsy Day 2009”). We’ll be highlighting the funniest, weirdest, most attention grabbing efforts here on Etsy’s Blog and on our social networks (like our Facebook page and Twitter), and we’ll make sure to link back to you. “

Overall, this action did seem to drive new visitors to the site…traffic to Etsy increased 40% on Etsy day…what is interesting to me though that Susan Schumann–the etsy seller who created this idea–is no longer selling on etsy. Nor is her husband.

Remember Etsy Bitch, the blog created by Etsy sellers who wanted a place to vent and discuss their frustrations about Etsy without dealing with the censorship and retaliation that was happening in the Etsy forums? Well EtsyBitch’s post about Etsy Day was called “EtsyDay?Oh no more free labor?” and went on to say, “We don’t really care where the “idea” for Etsy Day came from, it’s the whole idea that Etsy is SPONSORING and PROMOTING another push for sellers to do more FREE MARKETING for Etsy without getting ANYTHING BACK is just more of the same. Many sellers have been already marketing Etsy FOR FREE for 4 YEARS already!!!!

It’s important to mention this again: Etsy was still not providing marketing and advertising. And so essentially all a you really got as a seller was a place to sell your stuff and appear in the searches run by random customers…but the search was kinda crappy, the website was still unpredictable, and sooo…you can see why Etsy Bitch existed in the first place because many sellers felt as if they were always doing the marketing themselves and yet they were paying to have their stuff available for purchase on Etsy.

But remember…Etsy is at this point in 2009 only making a listing fee and that 3.5% commission off of each purchase. The reality is that Etsy barely had money to fix the site issues, much less provide advertising. Customer service was still a nightmare and sellers felt frustrated and abandoned.

Furthermore, more and more stories were popping up of Etsy sellers having their shops closed down for no reason other than retaliation over negative statements made in the Etsy forums. One seller wrote into to Etsy Bitch to share their story, “Today I learned through a customer that Etsy has disabled my account. I have not received one word of notification as to why my account has become deactivated. I have no non-delivery disputes that are open. Nothing. I emailed Etsy only to find out that my account was deactivated because of my affiliation (meaning she helped me set up my store) with another Etsy member who had a personal falling out with Etsy. Now, what right does Etsy have to terminate my account privileges without my knowledge because I had gotten help from a family friend who no longer has a relationship with Etsy?”

Basically: this person’s shop was disabled because they had help setting up their shop from someone else who Etsy had banned? Yeah, is that even legal?

In response, Etsybitch said, ‘They seem to be shutting down sellers with a history of asking questions and not offering reasons why they were shut down with a uninformative form letter, if anything. Every week we hear of another one. Voices that called out for Etsy to straighten up and behave like a company and not a clique of vengeful children are vanishing faster and faster. Now they are dipping into the “friends of our enemies” level to close down.”

I’m just going to jump in here and say that I received multiple messages from various members of our community about being banned over weird stuff even as recently as last year, with little to no help from Etsy. In most cases it was a mistake–possibly a weird bot issue–and yet Etsy was unwilling to reinstate stores. One seller was booted from the site…and then so was her boss because the seller had called Etsy support for her help with her boss’s site. It’s crazy.

But back in 2010, One commenter at EtsyBitch said, :

“The big elephant in the Etsy playroom is that this is a huge business with no fuctioning customer service. Etsy also has no seller-appeals process (check the Handbook if you have 5 weeks to spare) and Etsy has been pretty heavy-handed with some accounts.

If you’ve ever been subjected to some of Etsy’s bizarre email warnings, mutes, bans, etc., then you know that Etsy doesn’t even have a fair warning system. You could have your store altered, edited and closed without any notice at all. Or you might get a series of emails that make no sense, accuse you of violations you never committed, and are NEVER SIGNED WITH AN ACTUAL NAME!

That kind of stuff sure smells personal to me, but what recourse do Etsy sellers have on a huge, humungous, very profitable site that STILL HAS NO CUSTOMER SERVICE AFTER MORE THAN 4 YEARS?!?

Check out the other sites – they all have real customer service. Etsy never will – because the focus at Etsy isn’ the seller, it’s how many tens of thousands of new stores set up each week and throw away listing and showcase fees by the boatload.

One thing for sure, the cash register drawer at Etsy is always open!”

Despite sales continuing to grow and grow at Etsy, more and more sellers who had been there since the beginning were starting to talk about leaving. Either because the site was always crashing or because customer service was terrible or because they just weren’t making any money while also working harder and harder.

As a reminder, most of these sellers were underselling themselves because that’s what customers expected. A hot deal. And etsy wasn’t jumping in to coach sellers on paying themselves living wage, because that might drive up prices and turn off customers.

In late 2009, Rob Kalin wrote a letter to Etsy’s board. He said that Etsy had strayed too far away from its original goals–remember, community and fostering small business were his priorities, which to be fair, are the same as mine.–because it had been focusing too much on growth. Now, of course, when Kalin accepted all that VC money, he was committing to growth and profitability, but as I mentioned at the end of the last episode, Kalin would admit in 2019 that he had no idea what he was signing himself, Etsy, and its community up for when he took that money. He said, “ “I didn’t have enough awareness of the context of what was going on there, in terms of if we take this step will it compromise the values.”

The board agreed to reinstate Kalin. “I’m here to restore a sense of wonder, a sense of poetry, and a sense of foolishness to Etsy,” he told his staff. And it was a great time for him to step back into that role. Perhaps thanks to all of Maria Thomas’s hard work and Chad Dickerson’s overhaul of the tech side of Etsy, the company was finally profitable. And it ended the year with more than double the sales of the previous year, at more than $180 million. Once again, Etsy only got to keep about $5 million of that, so they were still far away from providing a strong return on the investment money they had received in 2008, but things were looking up.

Still, Kalin truly believed that he was going to be able to restore the sense of anti-capitalist, community-driven values to Etsy…I would argue–and surely you would agree–that was a fool’s errand knowing the amount of investment the company had brought in. There was too much money on the line to indulge idealistic thinking.. And no matter what Kalin might have believed at that time, he still had to deliver massive growth and continued profitability. EBay–for better or worse–had stopped thinking about community and empowering sellers a long time ago. Etsy would have to do the same if it wanted to really be “the new ebay.”

Kalin sat down for an interview with Teri Evans of the Wall Street Journal in March of 2010. And I have to say that I found him very likeable in this interview. He feels sincere, someone I could talk to about a lot of things, which is not normally how I feel when I read interviews with CEOs. You have to remember that I have worked with not one, but two CEOs who had a cult of personality around them and it was terrible. I find myself disappointed and really just angry when I see people pandering to or worshipping CEOs because of my own experiences. So when I say that I find Kalin likeable, I am both surprised and well, delighted. We agree on a lot of things. We have a lot of the same hopes for the world. The difference is that he had both the resources and well, the hubris to see his vision play out.

When asked what his vision for Etsy was, he said, “instead of having an economy dictate the behavior of communities, to empower communities to influence the behavior of economies. In my mind, Etsy’s ecosystem is about empowering and supporting these very small businesses. That goes well beyond just a marketplace.”

He went on to say, “It’s always been important to me that Etsy the company is part of Etsy the community. If you can keep that direct connection to your community, that’s vital to success. I actually dislike the word ‘users.’ I don’t see people in the community as those who ‘use’ us, and we’re not trying to ‘use’ them either.”

The interviewer, Teri Evans, asked him .” ‘Keep it human’ is one of your rallying cries, what does that mean?

And he said, “It means growing big, while staying small. Etsy itself is hundreds of thousands of very small businesses and I want to be able to keep that intimacy within our own company, even as we grow and the number of people we need to support grows. It means always keeping a human face on what we’re doing. I don’t want to hide behind a corporate firewall and start speaking with some third-person voice. I want to always speak with a human voice.”

So let’s take a pause for a moment here to reflect on all of this. When I read this, when I think about what Kalin is saying, when I remember that VC money comes with strings attached that essentially deprioritize all of these warm and fuzzy ideas like community and humanity and empowering small business…well, I get really depressed. Because I love what Kalin is saying here…and I want this platform to exist. I want an Etsy that is about community and empowerment, that prioritizes mentoring and supporting its sellers more than bringing in new customers. I want an Etsy that says, let’s prioritize sellers making a profit over our profit…because if our sellers do well, we will do well as a result!

And as I reconsider everything that Kalin said to the Wall Street Journal, as I imagine a version of Etsy that truly embodies those values…well, I know there is no way in hell that Rob Kalin is a part of today’s Etsy. Yes, spoiler….things are going to change again.

But in the meantime, Kalin doubled Etsy’s staff, adding more engineers and customer service reps. The goal was to take care of sellers, to treat them as the valued customers they truly were. Of course, if you want to double your employees, then you need to massively increase the amount of revenue you’re bringing in to cover those salaries and remain profitable. Kalin has no option at this point BUT to continue maintaining a company that becomes more profitable with time. Certainly not less profitable, but even the same amount of profitability is not acceptable. It must be more and more profitable while also becoming bigger and bigger.

Oh…but let’s be honest here…in 2015 Etsy would file for an IPO–meaning it was going to go public–and then it would it reveal that the company had never technically turned a net profit because every extra cent that was made had to be continuously reinvested into improving the website, hiring staff, and marketing.

So in the last episode, I pretty heavily cited a 2011 profile of Etsy written by Max Chafkin for Inc. And as I mentioned then, this article was pretty negative in terms of its portrayal of Kalin. Chafkin paints him as a weirdo spouting off cuckoo idealistic hot air, while fondling a knife.

Wait…let’s just read this particular paragraph:

“Today, Kalin is socially awkward, reticent, and given to eccentricities that can seem downright crazy. “I speak to people in the business world and the technology world, but I don’t admire them,” he says, pointing an 8-inch combat knife at me for emphasis. “I admire the makers of the world.” This is not empty rhetoric: Kalin makes his own furniture and his own underwear. He also thinks that trying to maximize shareholder value is “ridiculous,” adding, “I couldn’t run a company where you had to use that as an excuse for why it was doing things.” “

I’m just going to go ahead and say that “maximizing shareholder value is ridiculous” statement is not a good look for him. I mean, in my eyes, it’s a very good look…but there’s no way his investors and his board liked reading that!

Chafkin would go on to say, “In my own experience, I found Kalin infuriating, inscrutable, and yet impossible to hate.” Later it would turn out that the knife was actually a letter opener made by an etsy seller and that Kalin was just sort of nervously fidgeting with it because it was pretty clear that Chafkin didn’t like him. But that wouldn’t come out for years. So the business world–and anyone else reading Inc in 2011–got to see Rob Kalin as a child with a knife who was bad at his job.

Chafkin pointed out time and time again that Kalin was essentially on a fool’s errand, that there was no way he could make Etsy profitable and huge, make it the next Ebay while still prioritizing sellers. And Chafkin himself viewed most of the stuff for sale on Etsy as “junk” albeit “strangely compelling junk.” You almost can’t help but wonder if maybe he was not the right person for this profile.

He went on to write, “As I was interviewing people for this article, I repeatedly heard that Kalin could be dangerous at close range. “He can be a very difficult person,” says Matt Stinchcomb, the head of Etsy’s European operations and a longtime friend. “I don’t mean that in a negative way. He’s just like a lot of really smart people who don’t want to suffer the rest of us.”

This article was not a great look when it was published in April 2011. Because more and more of the business community (and surely etsy’s investors) were starting to wonder if Kalin was standing in the way of Etsy’s growth.

Yet there were still people out there who believed in Kalin, if only because they were looking at Ebay’s missteps. In 2010, New York Times writer Jenna Wortham described Ebay as having “gone from resembling an overflowing garage sale to being something closer to Wal-Mart in the eyes of many shoppers. It has struggled to reinvigorate its marketplace and alienated many of the smaller sellers that were once its lifeblood.”

Rob Kalin told Wortham that Etsy would be avoiding Ebay’s mistakes by prioritizing and valuing its sellers, saying, “It is a symptom of our times. They looked to maximize profitability over community.”

He went on to say, “It’s not just ‘you are what you eat’ anymore,” he said. “You are what you buy, and these things define you.”

Still, for the most part, 2011 was a weird year at Etsy…for one, there was that Inc profile painting Kalin as a difficult, knife weilding mess.

And then there was the People Search disaster…a new feature that was supposed to add a social media type vibe to the site…but really, just violated everyone’s privacy. Hey remember Ecommercebyte (previously know as auctionbytes), from our ebaysode? Run by the Steiners? Well even the Steiners had to cover the disaster of People Search,” but they did it in a very chill, non-biased way saying “Etsy users are unhappy after learning that anyone can now find them by typing their real names into the Etsy search engine. Even buyers show up in search results, letting people view their favorite items, favorite shops, and the “teams” to which they belong’

And beyond that, Etsy sellers were feeling even more frustrated than ever. Etsy was refusing to run television ads. Sellers were no longer finding themselves appearing in google searches (and no one at Etsy could give a straight answer). Paypal payments were going to the wrong seller. Or sellers were being paid the wrong amount. Stores were continuing to be shut down at the whim of random Etsy staffers. The same stuff was being featured over and over and over again on the Etsy homepage.

One seller wrote to EtsyBitch:

“Etsy did not and does not plan ahead, and they refuse to increase functionality and increase advertisements. Basically at this point, I think the first site to get commercials will be the front runner. Artfire has been nipping on the heels of Etsy, and if they pump up the advertising, then Etsy will lose what little upperhand it had.

Etsy is only on top because it was first. It’s not smartest or prettiest or best. It was just first. And it’s luck is starting to run out. And so are customers”

In July 2011, Wall Street firm GreenCrest Capital released a report about Etsy, saying that seller complaints/concerns were becoming a bigger and bigger issue for Etsy. Nonetheless, the firm predicted that the company’s revenue (not to be confused with sales) would grow from $72 million in 2011 to $201 million in 2016. That sounds like a lot of money, but that’s slow growth over five years when venture capitalists are expecting exponential, ebay style growth.

GreenCrest Capital surveyed Etsy sellers and found a lot of bad news. Over 80% of respondents had concerns about their Etsy experience. Their complaints included the effort required to maintain an active storefront, competition with other sellers, privacy concerns, and Etsy’s lack of technological capabilities, particularly product search. The analysts who wrote this report went on to say that there were only two ways that Etsy could make sellers happier: either reduce it’s already “super low for the industry” fees or make significant, margin-dilutive platform investments: meaning spend money on things like better site performance and search, customer service, fraud detection teams, and advertising…which would cut into the company’s ability to EVER make a profit. And oh yeah, the company would NEVER be able to go public without being profitable and going public was the big goal because then all of those investors would see a big pay day.

This report, on top of the bad Inc article, on top of the epic fail of the People Search function, on top of more and more public criticism of Etsy from its sellers…well, it was the end for Rob Kalin. And in July of 2011, Rob Kalin was fired from Etsy. He would later describe that year as “hurting like hell,” and he would tell Vox (after clearing up that he was not brandishing a knife but an artisan made letter opener, ““It felt like my life’s work was being taken away from me. But looking back, I’m glad that it happened. Making incremental improvements to a publicly traded company is not my bailiwick, that’s not what I would have been the best at anyways.”

Etsybitch would take a particularly bitter and cruel final jab at Kalin, saying

“Up until now it’s been Kalin’s little fiefdom run by himself and his protected inner circle of hipster trolls who seem to not only be untouchable, but unpublishable.Have the investors been actually paying attention and simply couldn’t look the away anymore and overlook his aloof bizarreness (like pulling hunting knives on business reporters) anymore? Or did, as I prefer to think, Kalin just stopped showing up for work? God knows his heart hasn’t seemed to be in it for 5 years, so why bother having the rest of him show up when you can stay at home and build guitars from IKEA doors and read greek poetry so obscure even Jack Keroauc would roll his eyes.”

Chad Dickerson–the CTO that Maria Thomas hired in 2008 would be installed as the new CEO. And this would be the turning point into the Etsy and it’s ad fees, annoying star system, bad customers and everything else we know today. Buckle up because we’re about to cover a lot of bad stuff, really fast!

Chad Dickerson took over the reins of Etsy and to be honest, nothing really seemed different. Three was a lot of the same talk about community and empowering sellers, etc. Search would be improved (but no one shared a plan or a timeline for this), more customers would come to the site (once again, no plan, no timeline was shared) and there would be a new Seller Happiness Team, According to Dickerson’s statement on the Etsy blog, “This new team will include people from all over the company with a focus on making running your shops on Etsy both delightful and rewarding. We’ll be engaging with the seller community more publicly and more deeply with a unified cross-disciplinary effort from teams across the entire company. The first task of the Seller Happiness Team is determining how we will measure happiness in the seller community so we can set a baseline for how we are doing, and then improve upon it.”

Well first off, this sounds like a lot of bland meaningless corporate-speak to me, Etsy Bitch–in one of its final posts–would call out the ridiculousness of a Seller Happiness Team that included no actual sellers! Etsy bitch asked,”How does Etsy propose to “determine and measure seller happiness” if it continues to ignore what sellers have been saying in the forums for years?!?

Does “engaging with the seller community” come AFTER locking threads with a public spanking? After sellers are muted, banned and…..perma-muted? After Etsy publishes an entire page of all the ways Etsy plans to continue silencing sellers it doesn’t like?

It was a particularly bad time to start a conversation about a Seller Happiness Team because that same week, a featured seller was enjoying her second time as a featured seller…which further reinforced the sense of favoritism and unfairness happening at Etsy.

One commenter wrote:

No matter what Chad lists from here to hell and back Etsy is never going to follow through on one item. Etsy’s SOP is to yak about the list for 2 weeks, decide they’re all “too much work” and drop ’em in a flash.

If 200 people can all go home & not figure out that an all-internal Seller Happiness Team WITHOUT sellers is the stupidest Etsy idea amongst hundreds of stupid Etsy ideas – what else can anyone expect?

A two year old would have seen through this stupid insult in less than 30 seconds,”

One of the last things Dickerson called out in his list was dealing with the so-called reseller problem:

“…I’ll be focusing more of the company’s energy on understanding and addressing the core issues that lead to resellers being visible on Etsy. We’ll definitely continue to step up enforcement, but we’ll also be doing more work to address the root causes of the problem.’

Resellers were people who were buying stuff from alibaba or Cafepress or whatever and selling on etsy as stuff they had made themselves. This was a violation of Etsy’s policies, and while the company was working on weeding out these sellers…they were also penalizing innocent sellers along the. This would become Etsy’s most controversial issue in 2012. And it was receiving a lot of bad press over it.

Etsy had two teams that scoured the site for resellers and copycats. They were the Marketplace Integrity and Trust & Safety teams. Their job was to monitor the site for factory-made goods, items that violate copyright, or offensive material. They would shut down sellers’ shops that break its rules. There was also–as of 2012–new software that would help find these issues without a human. And I suspect that this software still exists, hence all of the problems with sellers STILL losing their Etsy shops. This software was called SCRAM, and it flagged sellers who seemed to set up their shops and fill them with product too fast. Which…what if a seller had made a huge batch of stuff, already photographed it, and listed it all at once? THIS IS ENTIRELY POSSIBLE AND COMMON. These sellers would be flagged for review.

In 2012 Etsy had doubled its trust and safety teams to a total of 16 people…which still doesn’t sound like enough headcount to actually do this job well, which is probably why a lot of sellers felt that Etsy was NOT doing this job well! Sellers were taking matters into their own hands, starting their own callout site for resellers and copycats, etsycallout.wordpress.com, whose mission was “CALLING OUT BLATANT MISTAGGERS, RESELLERS, AND OTHER HOT TOPICS SINCE ADMIN WON’T LET US.”

Etsy seller Jaime Core told the Wall Street Journal about her own experience hearing from the Etsy police.

“the company sent her an email with a “long” survey asking about her items, specifically a soy strawberry candle. The survey requested the names and ages of anyone working with her in her candle-making business and for step-by-step photos of her production process.

“I was flipping out,” she said. . About two hours after she sent in the photos and answers, Etsy responded by email: “Thanks for being part of the Etsy community,” she says.

It didn’t close her shop. She says she doesn’t know why her candles were flagged. Julian Wong, a manager of the Etsy integrity and safety teams said,, “We open up dialogues with sellers and most instances (well over 80%) result in outcomes like Jaime’s.”

Other sellers would find their stores suspended because they were shipping from a different address than their home address. Which makes perfect sense if you’re shipping from work or maybe you’ve rented out a studio..Or if maybe you don’t want etsy customers to know where you live!

Etsy told that Wall Street Journal that it about 1300 of its sellers were flagging suspected items each week for review. And while that sounds like a lot, it was only half of a percent of total active listings. Yet, even that is a lot of work for a team of 16 people. What about the stuff that SCRAM flagged?

And despite Etsy’s public commitment to stopping resellers, it was happening. Chad Dickerson received a ton of heat when someone discovered that his public list of favorite items on the site included a mass produced robot watch. Another now-famouse incident involved a furniture maker profiled as an “Etsy success story,” called Ecologica Malibu. In record time the internet–lead by another blog, Regretsy, discovered that the woman shown in the Etsy profile sketching designs in her Malibu studio was actually a distributor for a manufacturer in Indoneisa. She wasn’t making shit, if you will. Photos surfaced of laborers literally building the furniture she was claiming to make herself. In record time, Etsy rebranded her “a collective,” and closed the comments.

Meanwhile, a change.org petition popped up demanding that Etsy take a stand once and for all against resellers, saying, “For a long time, Etsy members have been frustrated by the lack of response from Etsy when flagging obvious resellers. Even when accompanied by proof of reselling (by linking to wholesale sites containing the very same products sold as “handmade” on Etsy), flagging rarely results in anything being done.”

In 2012, Dickerson and Etsy raised another $40 million in investment, pledging to grow the international business and continue to improve functionality with that money. Of course, bringing in even more investment meant that growth and profitability were even more important, and must happen aggressively. Ironically, that same year Etsy became a B. corp, meaning that its corporate goals must include having a positive impact on society and the environment. Interestingly enough, Etsy would lose this certification in 2017 because the policies and structures required to qualify as a B corp were holding back its growth.

In the fall of 2013, Chad Dickerson stood before a meeting of Etsy sellers and employees and announced, “Today we’re announcing you can hire whatever number of people you need.” Meaning…Etsy would now start selling factory-made products. When this new manufacturing initiative was rolled out to everyone via a video chat,, Heather Jassy, SVP of Members and Community, who led the conference, described it as “one of the most stressful days of my life.”

Etsy spun it as a great opportunity to sellers to now finally, for real this time, quit their day jobs and do what they loved by paying someone else to make stuff for them. And made of show of bringing in retailers like Macy’s who were planning to buy tons and tons of Etsy made products at wholesale.

Furthermore, Etsy wouldn’t be monitoring who was making this stuff for the sellers. It was up to them to find and vet factories…Dickerson said that his hope was basically that Etsy sellers naturally have the ethics to work with factories who treated their workers well, etc. And it didn’t matter if things were no longer, say screen printed but now digitally printed or had machine embroidery versus hand embroidery…as long as the product was “handmade in spirit.”

Why did Etsy make this decision, essentially killing the “handmade, human” vibe of the brand?

Etsy was losing its successful sellers. They were moving off the platform and starting their own ecommerce sites, wholesaling to other retailers on their own, etc. This was a last ditch effort to keep those big sellers. They needed them for one to continue that story that sellers COULD quit their day jobs and make a living on etsy. They needed successful sellers on the platform to illustrate this. And two, they needed those listing fees and commissions from those successful sellers to keep the company going. Also–those successful sellers had been asking for permission to outsource production of their goods for years…but Rob Kalin had been vehemently opposed to it. But the reality was that any successful seller had left Etsy long ago and really had no use for a site that was so controlling, so censoring, and offered little value in return for its fees and policies.

Next, Etsy was hitting a ceiling in terms of growth. There are only so many makers, so many vintage sellers out there, we already know that sellers were getting burned out or leaving the site because of its policies…and so there weren’t many new people to bring into the fold. And remember, Etsy was promising massive growth to its investors. Beyond promising it, they were required to deliver it. And it just couldn’t happen with its current seller base.

this is a good time to remind you that Etsy still wasn’t profitable. But if they could get more sellers in the door who sold many units of the same item over and over again, they could maximize revenue without creating more work for themselves. In plain and simple terms: Etsy’s future–its exponential growth, its profitability, that return on all of its investors money…it relied on selling a shit ton of stuff, and that could never happen when it was all handmade. Makers only had so many hours in a day and that wasn’t enough to grow Etsy in the way it needed.

Ultimately, about 6% of existing Etsy sellers began to outsource manufacturing(or at least hire people to help them) after this policy change. Not the huge shift that Dickerson was hoping for…but what DID happen is tons more sellers appeared on the platform, reselling stuff from alibaba or other cheap ecommerce sites for prices for lower than any of the other handmade stuff available on Etsy. And more and more sellers felt alienated and left.

In 2015, etsy seller Grace Dobush wrote a great piece for Wired called “How Etsy Alienated Its Crafters and Lost Its Soul,” where she explained why she closed her Etsy store. It was the resellers, it was the pressure to price as cheaply as possible, it was just too easy to get lost in the other tens of thousands of items on the site. And she said,”At its outset, Etsy was a powerful tool for makers, by makers. We were a bunch of Davids, fighting back against the big-box Goliaths with artisanal slingshots. Founder Rob Kalin came up through the same online craft forums that me and my crafty cohorts did, and we were making a revolution.

In the past few years it’s become apparent that Etsy is the Goliath. Indie craft’s whole purpose from the outset was to meet your makers and consume conscientiously. Now, when you ask your friend where they got that cool “Weekend at Bernies” cross stitch sampler, they’ll tell you, “I bought it from Etsy”—the maker’s identity is secondary, if noted at all.

I’m not pessimistic about handmade culture at large: Maker culture is thriving independently of Etsy, and it’s easier than ever for crafters to run independent online stores. I prefer to sell my wares (and buy my presents) at local indie craft markets and in curated bricks-and-mortar shops that reflect the flavor of their communities and encourage real relationships between makers and buyers.

The bottom line is this: Etsy needs crafters more than crafters need Etsy.”

It comes as no surprise that in 2015, Etsy went public. This had always been the goal. This would be the big pay day for all of those investors. The company’s offering of about 16.7 million shares raised about $267 million, after it was priced at the top end of the expected range of $14-$16. None of this was shocking or disappointing. At this point Etsy had 28 MILLION items for sale on its site!

In hindsight it’s so clear that the company had lost its way, or at least its original values and community, in exchange for all of this growth.

April Winchell–the founder of the now-defunct Regretsy wrote an opinion piece for Vice called “From Etsy to Sweatsy,” ostensibly to discuss whether or not Etsy stock was a good investment.

She said,”Etsy is Walmart with better fonts.

You’ve still got to ask yourself, what exactly am I investing in? Selling factory-made goods isn’t a movement. It doesn’t “reimagine commerce” or “unite the global marketplace” or do any of the other things Etsy likes to hear itself talking about. Mass-production is the dreary cornerstone of every big box retailer, and it doesn’t turn into mason jars full of daisies when Etsy does it. Etsy is not magic. Etsy is Walmart with better fonts.

Now let’s look at the worst-case scenario, and the one more likely to be true:

Many of the factories manufacturing Etsy’s “unique items” are sweatshops.

You can yarn bomb it all you want, but the people who produce this merchandise are not crafters. They aren’t sitting around their kitchen tables, happily stringing beads and living the handmade dream. They are impoverished people in third world countries, forced to work in terrible conditions. They’re exposed to dangerous chemicals, they work on unsafe machines, and if they’re lucky, they make less than 50¢ an hour. And many of these exploited workers are children. That’s what you’re investing in.

And here’s your return: every piece they make that gets sold on Etsy is part of your profit.

Enjoy your dividend check!”

Beyond the ethics of it all, it turned out very fast that maybe Etsy stock wasn’t a good investment. About a month later, Etsy stock prices tanked 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 lead to a a group of investors filed a class action lawsuit against Etsy claiming fraud. The suit claimed that Etsy’s CEO and officers failed to disclose numerous problems with the site which could affect the stock price, among them that “more than 5 percent of all merchandise for sale on Etsy’s website may be either counterfeit or constitute trademark or copyright infringement” and that “brands are increasingly pursuing sellers on Etsy for trademark or copyright infringement, jeopardizing listing fees and commissions”. The suit also claimed that Etsy management knew of the rampant trademark and copyright infringement but did little to stop it, and in fact worked to hide this information from potential investors

This is a not a good time for Etsy. In its first earnings report, it revealed that it had lost $36.5 million in its first quarter, compared to a lost of about $400k for the entire previous year. To make matters worse, a profile of a million dollar etsy seller on Fast Company lead to the discovery that she was also reselling stuff she was buying from Alibaba. NOT A GOOD LOOK.

Next, Amazon was ramping up its own competitor to Etsy, Amazon Handmade, by literally sending facebook messages to top Etsy sellers to try to get them to leave the platform and join this new one. And btw, you can still sell Handmade on Amazon…but you have to prepared to sell to customers who expect super fast free shipping and low low prices….oh wait…are we talking about Etsy right now? Hmmmmmm

The bumpy ride continued into 2017, when Black-and-White Capital LP, which owns about 2% of Etsy’s shares, released a letter criticizing aspects of the company both big and small, from its “horrendous search functionality” to “historical pattern of ill-advised spending.” Chad Dickerson was ousted as CEO, 8% of the Etsy workforce was laid off, and a new CEO Josh Silverman was put in place.

With Silverman in place, the company took off…sales continued to grow to more than a billion dollar per quarter in 2019, to more than 2 billion per quarter in 2020.

Yet it’s always important to remember that Etsy only keeps a small fraction of that money. And they must continue keep that momentum. They are still smaller than ebay but getting closer and closer.

Just before Silverman took over, an Etsy executive told Forbes that more than half of Etsy’s revenue comes from sellers fees, like its proprietary payment processing system, which takes a fee of 3 percent, plus 25 cents per US transaction. The company made it the mandatory default option in May, removing the option for sellers to use individual PayPal accounts). Because listing fees and commissions weren’t generating enough revenue…Etsy needed some of that money that was going to Paypal…just like ebay did!

When Etsy began to promote free shipping in 2019..okay, promote isn’t a great word here…maybe demanded it from sellers? In order to be pushed up in the search results…and btw when there are tens of millions of items for sale on the site, being in those first few pages of search results can really make or break your business…so you have no choice but to offer free shipping (which you the seller are actually paying for) in order to sell anything in the first place…the first quarter of this free shipping initiative resulted in a 37% increase in Etsy’s revenue over the previous year. And to be clear..this free shipping was a direct attempt at competing with Amazon. Or at least, an acceptance of the Amazon-ification of online shopping: customers expect free, fast shipping and low low prices.

IN 2020, Etsy started automatically advertising its sellers’ products and taking a fee — at least 12 percent — for every sale it referred. Sellers who sold less than $10k a year could opt out, but everyone was opted in by default.

Nonetheless, what we see here, with all of the policy changes over the years, from allowing resellers to free shipping to the new-ish etsy advertising policies and fees…all of this is to drive higher profit and revenue for a company that may have hit its ceiling in terms of organic growth…meaning, there aren’t many new customers to bring in, there aren’t any new sellers (especially as sellers continue to leave the platform to start their own website or sell directly on instagram…heck, vintage sellers are even going back to ebay!) Even this new star steller system that rewards sellers (with what? I don’t know) for shipping stuff super fast (and free) while responding to customer messages super fast is really just a way of Amazon-ifying the experience for customers…well the shopping customers, not the sellers who are also customers.

Jenny Topolski, an Etsy jeweler told Vox,“It often feels like they’re just trying to sell us more products. It’s almost like a pay-to-play style of business, which I think people feel insulted by.”

“We’re the heart of the company, creating literally all content and revenue,” she says, “and suddenly we weren’t particularly welcome anymore.”

Nicole of Kilner Goods sent me a great message about her experience with Etsy. She broke down her own experiences with the ever-increasing fees the free shipping, etc, adding”Then it was a nearly constant push for sales. Have a sale for this or that holiday, and again, we’ll rank you higher in search if you have a sale. Lately and lastly it’s this pop up shit that comes up after you’ve favourited something. It’s a “Hurry! Buy this soon, there’s only one left” pop up. Very amazon/fast fashion like, and it just cheapens the feel of the site for me. I make one of a kind items, and though they’re not cheap, the constant, “discount this” mentality makes me feel like Etsy is trying to make their site like any other fast fashion/cheap home site.

I feel lucky that there is an Etsy, rather than just brick and mortar or craft shows because of it’s huge reach, and cause trying to drive traffic to my own e-commerce site seems like a magical alchemy I really don’t care to master 😉 But man, I wish it would slow down, if that makes sense? I know they are a large company that exists to make money, but why does every company seem to sell out when they get to a certain tipping point? I know longing for Etsy to get smaller and less competitive (I guess) is a fantasy but I feel like they were originally more small business focussed and less “Etsy trend report”.

And other sellers have called out the complete loss of community…including the forums.

Kenzie of White Citrus Ceramics said, “I have been selling there since 2012 and I was able to adapt to the changes but one thing I’ve noticed is that they seem to have done away with the ‘community’s aspect completely… my guess is because it went from helpful message boards with other sellers to buyers thinking it was customer service… so they just became spam walls of THIS SHOP WON’T ANSWER ME IVE EMAILED THEM 10 TIMES IN THE LAST 2 HOURS .”

And I think that’s an important thing to call out here, too…as Etsy expanded its customer base, it brought in more and more and more people who aren’t from the maker community, who are looking for cheap, fast gifts. I mean, to see more please go check out the smallbizmemes instagram account. The way customers talk to etsy sellers fills me with the kind of rage I normally reserve for billionaire space travel! But these customers have no concept of the time involved in making these items, they don’t understand that when you’re shipping using the usps, things are out of your control, and they certainly don’t understand that sometimes sellers take a day off and can’t respond to customer messages. Etsy’s expansion has certainly made it hard to be a seller.

Kate Kennedy–another Etsy seller–told Vox, ““My customer interaction at the beginning was so different than it is now,” Kennedy says. “People were much kinder, more flexible, more understanding, and now people are expecting things in two days and asking for coupon codes and free shipping. By cosmetically making it look more like Amazon, there’s a huge disconnect between the customer’s expectations and what the sellers can realistically provide.”

In December of 2020, as the USPS practically collapsed and packages were lost or delivered in late in January, rather than stepping in and educating buyers about the issue…Etsy opted to instead say “hey, USPS is behind schedule so why not just buy a gift card instead.”

Meanwhile sellers were left to deal with the harassment and threats of customers who somehow had not yet heard that the USPS was falling to pieces.

So if Etsy is so terrible, why aren’t all the sellers moving elsewhere? After all, in theory, capitalism should lead to competition and innovation…meaning better selling platforms for makers and vintage sellers….

In 2010, EtsyBitch began a series breaking down the Etsy alternatives out there. Let’s see where they all are now:

First there was Cargoh, which is still around. Unlike Etsy, sellers on Cargoh must be approved because they company wants to have a more curated assortment, without categories becoming too overassorted. The fees–8%–seem to be in line with Etsy, without the push for free shipping and all of the other nonsense.

Next was ShopHandmade, which was not only sketchy, it had low traffic and disappeared pretty fast.

Another platform is Zibbet and it seems pretty decent, although it’s important to remember that none of these sites get close to the traffic that Etsy receives.

Silkfair–another suggestion–seems to be gone.

Mintd–RIP

Artfire–still around, but looks like a poor man’s etsy

Dawanda–a european etsy, in 2018, Dawanda shut down and Etsy absorbed its sellers

Coriandr–gone

Winkelf–RIP

1000 markets–RIP

Ecrater–now seems to be a weird ebay, and the home page currently shows tires, some gently used Revlon lipstick, and baseball paraphernalia

And as time passed, as Etsy needed to maximize its sales and profits by reaching every possible customer and seller on earth…it began to buy up other companies that were either direct competitors, or at least doing the etsy thing in another country. This included

Elo7, the Brazilian etsy

A little market, the french etsy

Trunkt, a wholesaler of artisan made goods…trying to control the wholesale game Trunkt is now etsy wholesale

Yellowsmith, “ a community of makers working together to make great jewelry. Each design is created by an undiscovered designer, shaped by our global community, and made in our workshop. Yellowsmith jewelry is sold exclusively through our website and select retail locations.” Please note that yellowsmith no longer has its own website.

And Etsy continued to buy up other peer-to-peer selling platforms like Reverb (used music equipment) and Depop (vintage and secondhand clothing and accessories…lots of handmade stuff, too)

If you sell vintage clothing…you still have options out there if you want to escape Etsy: Ebay, vinted, mercari, even poshmark. But if you’re a maker, the options are either Amazon Handmade (which sounds terrible based on what I’ve read) Jenny Topolski described it to vox as “Terms for the sellers are awful. For all of the things they’ve changed, you still run your own business on Etsy. If you sell on Amazon, you’re working for Amazon. You’re just the same as anyone selling, like, restaurant supplies.”

or one of the few remaining sites I listed, which don’t bring in the traffic that you need to run a business.

And so–for all intents and purposes–Etsy has a monopoly on handmade goods. This allows them to dictate the terms from pricing to policy, and sellers have little room to argue. Is it unfair? Yes. Does it go against Rob Kalin’s vision? Absolutely .

Kalin would tell Vox in 2019: “How much money does Etsy have in its bank account and how much does the average Etsy seller have in their bank account? Who can afford to be more generous? Yet here we are, the company is asking the sellers to be more generous with the company.”

Etsy is not 2005 Etsy, it is not even 2008 Etsy. Were one of those years the golden era of Etsy? The time someone looks back on fondly as the time they wish they could relive, a time they were so lucky to experience? It’s hard to say. The writers of Etsybitch–who btw stopped publishing in 2011 after the death of one of team members, Angelica Schaaf Rayl-would tell you that Etsy never had a good time, that it had always been a shit show. But certainly Etsybitch would have a lot to say about free shipping, star sellers, manufacturing, advertising, and all of the other nonsense that came later.

I don’t know when the original ethos of Etsy died, probably when Rob Kalin was ousted the first time? Maybe the second time, but regardless, as Jenny Topolski would tell Vox,

“It’s just a place to sell now,“I still think the company is more ethical than a lot of big companies. I don’t feel particularly mushy feelings toward them, you know what I mean? It’s kind of just business. Whereas I used to feel a lot more.”

Not quite as harsh as “Etsy is just walmart with a better font.” But I feel that.

I want to wrap things up here by saying this: please don’t stop supporting all of the small business people who sell on Etsy. This is their lifeline to customers, until something better comes along. And right now, that better thing doesn’t exist. I like to imagine a nonprofit cooperative for sellers, where yes there are still fees, but that money is used to run a good site, provide customer service, all of the things that were lacking at Etsy, run with true transparency, and a vote from all members of the co-op. Just something for all of us to noodle on. Rob Kalin–if you’re listening–call me, we can talk about it together.

Thanks for listening to another episode of Clotheshorse, researched/written/recorded and edited by me, Amanda Lee McCarty

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