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Sat June 24 2017 11:10:05

Did IPO Contribute to Etsy Woes?

By: Ina Steiner

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Even before the latest round of layoffs at Etsy announced this week, some sellers were looking for alternatives, expressing dissatisfaction with the direction of the company. The marketplace is experiencing a parallel of eBay's history. As marketplaces look for revenue growth to satisfy Wall Street and shareholders, they roll out changes that prove unpopular with sellers - competing ads on seller listing pages is a good example.

Many sites have tried to attract unhappy eBay sellers over the years, and the same has been true with Etsy. But many who try to create an eBay or Etsy alternative quickly realize how difficult it is to attract sellers without a base of buyers - and how difficult it is to drive shoppers to a site even when there is a base of sellers.

In some case, alternative venues make rookie mistakes - ones that can have a huge impact on sellers. Site security, technical issues, customer service challenges,... And who wants to pay fees for a new site with no buyers - yet without fees, how can a marketplace grow?

In Etsy's case, they chose to go the venture capital route, which enabled them to scale, but it meant they had to either sell the business or go public in order to provide their investors with a return. (It chose the latter.)

Bonanza founder and CEO Bill Harding weighed in on the issue in a recent interview when he asked if Bonanza's future was secure. Bonanza is one of the few marketplaces that gained traction during a period of extreme change at eBay and has managed to survive, though it's nowhere near the scale of eBay or even Etsy and actually earns revenue through eBay sales.

In the interview, Harding pointed to the downside of raising funds through venture capital:

"Bonanza has been around almost as long as Etsy, and we've grown every year since our inception (in terms of users, features, and revenue). Because we've expanded Bonanza incrementally, we have the luxury of being free from the influence of venture capitalists or the stock market. This gives us the latitude to build the best features for sellers without needing to wring every last dime of possible profit out of our company. We have the license to build our vision of "the perfect product" for our users, even when it's not going to increase our revenue.

"Last year, we spent a lot of time working to make it easy to unsubscribe from emails. Is this going to drive our profits skyward? More likely the opposite. But it's opportunities like those that earn us goodwill over the long term."

Interestingly, former Etsy CEO Chad Dickerson distanced himself from the decision to take Etsy public in a recent blog post about becoming an advisor to Bandcamp, which he praised for its approach - "they haven't taken much outside money and maintain full control of the company."

He elaborated, stating:

"When I joined Etsy as CTO way back in 2008, the intention to be a public company had been stated months earlier ("Our goal is for Etsy to be an independent, publicly traded company.") We didn't go public until 2015, but five rounds of venture financing even before I stepped up to CEO in 2011 were very clear steps along that path. Nothing wrong with that - it's the way things work when you take venture money, unless you want to sell the company - but that's a particular path and Bandcamp has set itself up to go down a different road and that's really interesting."

Etsy still has a lot to offer sellers, and - if history repeats itself, sellers who have felt comfortable on a single venue will seek *additional* channels rather than abandon the marketplace.

Sellers of handmade goods have a number of small alternatives, as well as Amazon's new Handmade marketplace, while vintage sellers have some established marketplaces whose names will be familiar to readers. 

Feel free to discuss alternative venues. Many EcommerceBytes readers have been selling online for a decade or two. What advice and warnings would you offer to colleagues who are looking for alternative marketplaces or thinking of setting up their own shop based on your own lessons learned?

Title edited on 6/25/17.




Comments (33) | Permalink

Readers Comments

Did IPO Contribute to Etsy Woes?   Did IPO Contribute to Etsy Woes?

by: FeelingFroggy This user has validated their user name.

Sat Jun 24 17:16:13 2017

Well blame the IPO is as good as anything if you have to blame someone.


Would be really hard for these guys to just blame themselves and say " Hey we really screwed up "

So its just like the past potus always blaming the one before him.

HOGWASH IN THE FIRST DEGREE.

Did IPO Contribute to Etsy Woes?   Did IPO Contribute to Etsy Woes?

This user has validated their user name. by: White Rabbit
Web Site

Sat Jun 24 18:02:24 2017

As far as I can tell Etsy is on the market and for sale.. or certainly is talking about it with someone.

https://seekingalpha.com/news/3275284-etsy-jumps-talk-
pe-interest

It
may be all rumors but I really doubt it. How can this be a bad thing for the BODs and major stock holders :-)  the Frenzy of a buy out should double the stock and guess who holds a big chunk of the stock. :-) (not me)

All joking aside.. Selling Etsy is a great idea. I support it totally and the only losers will be any sellers that are doing well... are there any of those left there?

Looking forward to a quick easy sell to China.

Did IPO Contribute to Etsy Woes?   Did IPO Contribute to Etsy Woes?

This user has validated their user name. by: White Rabbit
Web Site

Sat Jun 24 18:03:29 2017

also...

Great article!

Did IPO Contribute to Etsy Woes?   Did IPO Contribute to Etsy Woes?

This user has validated their user name. by: BuildingMyOwnSite

Sun Jun 25 03:10:57 2017

Ina,  I can address Antique, Vintage, Handmade (AVH) aspects of your invitation regarding 4 sites: Ebay, Etsy, Bonanza, and Zibbet.   Below are features from an “Earlier Ebay”, and their “Current Status”.  Most are now problems.  Many relate to the other 3 sites.  ALL show a new site how to “Design The Next Ebay/Etsy”, or “HOW TO AVOID IT”!  Sorry for length.  I've made NO PRETENSE to be diplomatic.  I only bother with all below, because We NEED a site.  4 Losers +Amazon.  It's not there now.  Ebay History:

GONE ► POLICY FAIRNESS & TREATMENT   Ebay worked, now it's algorithms, tricks, untrained CS without adequate training, power, justice, brains.  Ebay modified all sorts of things to save money.  Ok, their filthy sandbox.  The classic “Low price - high shipping, manipulation”, could have been fixed OVERNIGHT.  They waited, added a fees on shipping.   DOZENS of other issues......

NON-EXISTENT ► Any form of Intelligent Site Promotion.  A new site will need Social Media but 3 of the above are at the limit of their good will.  This stuff goes viral........    I Dislike Social Media, but why not use it to get out the word for a new site?  Insert better ideas than mine here.................

GONE ►SEARCH THAT WORKS! (All that needs to be said). , WELL, just another word or two.......
Keep your hands off what PEOPLE SEARCH FOR. Let 'em try again if they miss!    Forget the 30 seconds and gone mentality.  of COURSE they leave..... your sites don't look or work as good as the Average Shopify, Weebly, or Supa.   I leave ANY SITE, as SOON as they mess with me. Flyouts, anything that moves, or makes noises, crap on the sides. Big pictures I didn't ask for.  Whitespace to make it load quicker.  Now I get to SCROLL MY LIFE AWAY.  I  LEAVE!  I “Gotta Lotta” places to buy at.

GONE ►Boolean! WHAT? WHY? Buyers learned how to use it!  AND it made “Saved Searches” work.

GONE ►Saved searches.  What Good Did Getting Rid Of That Do?  I had parts searches worth a $1000.00 purchase.  I can't do them everyday.  I assume you fired that person.  Why not REINSTATE IT?

GONE ► After searching, gone are the quantities next to returned categories.  HUGE MISTAKE.  Helped lead buyers to correct locations, subcategories.  DESTROYED buying on Ebay for me.  WHY???

STILL HERE ►  Large, Extensive Category List. THANK YOU!  (Did I Say That?) Over 8000! the way I count, in Antiques,   Vintage, Collectibles, Coins, Stamps, Glass, Pottery, Etc.  Prevents crossovers.  (Eliminates 2nd Catgy Fee), but SO WHAT!  FVF is HIGHER! Sellers AND Buyers are leaving........
BUT ► Even Large Category structures fail when the BUFFOON that invented BROWSE & Collections speaks.  Browse Will Drive Folks To Tarzhay for simple gold chains!  DUMP the pics, collections, etc.  Shove the research!   THEY CAME, THEY NEED TOOLS, THEY NEED A  MENU!  

NEVER WAS REAL ► Enforcement of CORRECT categories.  Prevents crossover, and INTENTIONAL  listing in wrong categories.  This has DESTROYED Vintage for me, and lots of my Handmade.  Why would I sell here?  I figured it out years ago.  HAHAHAHA!!! You're left with the FAKE Vintage!!!

STILL ON EBAY ► Html In Their Listings.  THANK YOU!  I won't cede look & feel to the staff of ANY SITE. You DO NOT know better than me how to present mdse.  Statements about “Uniform Experience” are garbage.  Ebay allows Html.  For those don't:  FYI, light gray on white SUCKS!  Stupid trend.   NOTE To ECB: “Thanks a lot,  For A Well Done Site, Without the Light Gray, On Top Of The White”.

GONE ► Payments Of Our Choice.  (Trust & Net Security will force this mostly to Credit Cards.  Too Bad)

SEVERELY LACKING ► GREAT Import & Export.  Others are better:  10-50+ columns of cost, features, text, variations and even IMAGE NAMES.  FTP them to a pre-known directory online.  Copy it, but downloading can save MONTHS when we're sick of each other.   All Sites: Do You Think “No exports” will keep me there?   Fooled you, I'm not coming! And I'm telling both my friends. (And Sparky!)

So, other than Ebay, I never thought the others did very good on the above.   Some Html, a “BIT of a FAIR SEARCH” in early Etsy's case.  So I never got serious with them.  Hoping for improvements for 10 years on Etsy, while watching Ebay destroy its customers (Sellers) and my attitude, with this garbage: “In Order To Enhance The Blah, Blah, Blah”.  “What kind of PEOPLE talk like that?      

A NEW SITE CAN survive.  I'd join in a heartbeat, with decent categories, import/export, a fair representation of the above.  After all, it was all there once, (Except the lies)  And the only reason it changed was cheating by OTHERS.  Take Some Responsibility, Vet It, Jury It. Charge To Do It!

These 4 AVH sites MAY crash.  Etsy???  I think they'll stay afloat, gut themselves, raise the stock price, parachute.  Consumers end up with junk.  Markets have been about stock fluctuation for DECADES!   Not INTENSE Buyer, Seller, Service issues in AVH.  They FIRE employees bold enough to speak up.  NOBODY with ONE SHARE in these companies (as an investment) cares a HOOT about buyers, sellers, or employees as individuals.  The BOD & Mgmt certainly don't.  GET REAL! Investors care about Stock Price, NOT employee benefits, or even GREEN Issues, unless they add to profits !  Those are important.  Etsy layoffs didn't lose free lunches, they lost HEALTHCARE.  DON'T make me explain that.

But I can learn from the above.  I'm giving up on AVH.  Bought a GROUP restaurant-bar.  Buyers come in for Steaks & Manhattans (in Brooklyn), But I only show 'em FAKE Under The Bridge Pizzas & Beers!  WHAT? You Say? — Yeah, I never let  'em see the MENU! —   WHY? You Say?  'Cause Someone PAID me to show Pizzas.  I make Two Cents extra on FAKE Imported Pizzas, a DIME on FAKE Brooklyn Craft Beer, and Ten Cents, (REPEATEDLY!!!)  on wasted listings from the Real Pizza & Steak Sellers! — SUCKERS!  HAHAHAHAHAHA!!!  — Take Note: Make your site a destination, and make SEARCH WORK!  Or Sell Short, And GET OUTTA THE WAY!!!  “Get A Fork, These 4 Are Done”.

Did IPO Contribute to Etsy Woes?   Did IPO Contribute to Etsy Woes?

by: pace306 This user has validated their user name.

Sun Jun 25 17:51:03 2017

Both eBay and Etsy have the same issue(s), just to different degrees.

HOWEVER, they both stem from the same poison fruit "now that they are public companies they MUST show quarterly increased profits. Being that most of the people who run these companies have no experience (aka Meg's famous line "even a MONKEY (Im looking at YOU Devin) could run eBay") therefore they have no idea how to grow their companies.

SInce they must continue to provide increased reults, when their common sense (or lack there of) runs out, they start to do things that make no sense .. and anger their sellers and other parts of their customer base.

Etsy has done it now a few times and eBay continues to do it.

From this point of view - it cant ever change. The reporting for past quarters comes quick and fast - and without a solid business plan (which they DONT have) these things will continue.

Amazon doesnt have this problem - but eBay and Etsy do...

Did IPO Contribute to Etsy Woes?   Did IPO Contribute to Etsy Woes?

This user has validated their user name. by: The End

Sun Jun 25 18:12:53 2017

Starting a New Selling Venue is EEEEEEEZZZZEEEE.
Give it a Good Name Like : "American Treasures".
1)STAY OFF THE STOCK MARKET ! ! ! !
2)No BAIN or fancy pants CEO's.
3)NO CHINA or other mass produced Modern CRAP.
4)Don't butt in between us and OUR customer.
5) Charge .20/listing per 3 months.
6) Keep the take rate flat at 2.5%
7) We accept POSTAL money orders, personal / business checks, and credit cards.
8) We have our own credit card gateway.
9) We generate our own labels> stamps.com.
10) Hard to find items are the anchor.
11) NO PAYPAL ! ! ! !

We'll expect this venue to open in FULL operating condition by the end of AUGUST 2017 ! ! !

All you negative Nellies can go ....



Did IPO Contribute to Etsy Woes?   Did IPO Contribute to Etsy Woes?

by: FeelingFroggy This user has validated their user name.

Sun Jun 25 20:19:21 2017

To much kool aid

Did IPO Contribute to Etsy Woes?   Did IPO Contribute to Etsy Woes?

This user has validated their user name. by: BuildingMyOwnSite

Sun Jun 25 20:20:05 2017

@TheEnd:

Seller #000001:  BuildingMyOwnSite Has Joined, and wants to know:

Got any categories yet?  I'll start diggin stuff out!

Did IPO Contribute to Etsy Woes?   Did IPO Contribute to Etsy Woes?

This user has validated their user name. by: Ming the Merciless

Sun Jun 25 23:08:48 2017

The Wall Streets gods worshipped by CEOs are the root causes of the problem.

To compete successful marketplaces need capital to improve and grow. That money can only come from finite sources -- principally investors, ad revenue, or clients.

Client revenue (fees) has limitations -- high fees and fee increases drive clients away, cause prices to rise, and can eventually drive clients away.

Ad revenue also has limitations. We've all seen what disadvantages ads have had on ebafia ad will have on Etsy.

The remaining source, investors, understandably want ROI which is what begins anti client policies.

A few decades ago many corporations balanced their policies so that employees, customers, and share holders received roughly equal benefits.

This was a time when wages kept pace with corporate earnings and C level management was a REASONABLE percentage of average employee compensation.

Until a disastrous Supreme Court decision mandated that corporate decisions MUST ALWAYS favor shareholders at the expense of employees and clients.

IPOs are just the beginning of the end for online sales venues not named Amafia or Wally World.

Did IPO Contribute to Etsy Woes?   Did IPO Contribute to Etsy Woes?

by: Garcia This user has validated their user name.

Mon Jun 26 01:21:45 2017

The death knell for sellers is almost always going public. Etsy and Ebay no long respond to sellers they have to respond to shareholders. If they don't make money they lose shareholders.  Unless someone buys Etsy and takes it private, Etsy will go the way of Ebay and sellers will drift from selling site to selling site in search of a place that responds to them and their need and sells their products. Good luck finding that.

Did IPO Contribute to Etsy Woes?   Did IPO Contribute to Etsy Woes?

by: odona This user has validated their user name.

Mon Jun 26 02:47:56 2017

In a word, ''Yes!''

I was there for both IPO's (luckily) but got out of etsy as fast as I could (luckily).

It took ebay several years to start getting squirrely (thanks Meg) but etsy collapsed almost overnight. I saw it in my receipts instantly and, once Chad left it got even worse. I'm now doing less than 10% of the business I was doing 3 years. ago.

Maybe I missed a shift toward smart phone / facebook, et al and I certainly have given up trying to understand etsy's promotional crap but from my perspective - and I understand the problems of a venture backed company - going public was the absolute worst move they could have made for viable longevity.

I, too, have been waiting for a new venue.

For now I stay on the 3 bigger ones (although I'm not sure Bonanza is really a player) and think about getting a job which I haven't had to do for 50 years. At 70, I suspect problems ahead...uurp!

Did IPO Contribute to Etsy Woes?   Did IPO Contribute to Etsy Woes?

by: Tiffee Jasso This user has validated their user name.

Mon Jun 26 03:18:07 2017

Etsy's downfall for actual growth and expansion comes from allowing the massive Asian market to come in and downgrade the quality of the site. Sure for a while the money rolls in, but as you move to mass marketed cheap souvenir stuff from better made homemade items, you lose buyers who want quality. You also lose sellers who no longer can get exposure because of the overwhelming amount of imports that take over the search engine. It is not only Etsy that is having this problem. Ebay is overwhelmed at times by Asian and East Indian sellers, and Amazon is battling the same problem.  

Did IPO Contribute to Etsy Woes?   Did IPO Contribute to Etsy Woes?

This user has validated their user name. by: Rexford

Mon Jun 26 07:01:41 2017

I saw what happened to eBay when it went public.

I expected the same when Etsy went public.  It happened.  I have no pity for them. Greed destroys companies.

Did IPO Contribute to Etsy Woes?   Did IPO Contribute to Etsy Woes?

by: cvsharkey This user has validated their user name.

Mon Jun 26 07:11:05 2017

Etsy was not intended for mass-produced products.

IPO was a mistake, the lure of it was too much for those who were in power at the time. But a company can be taken private again. I don't see this happening with Etsy, but it could be done.

Decades ago, companies paid more attention to the value of their employees, that was a time when unions represented those employees and the companies had to pay attention. That time is past.

Etsy was a unique selling proposition. Much of their marketing was accomplished through their sellers promotion of the site. This made their sellers their shareholders. Then, they got cocky & went public.

Limited market growth: There is a disproportionate balance between American sellers & American buyers. The world has discovered selling on Etsy to American buyers, many of those same countries do not have populations able to make purchases from Etsy. Toss China into the mix and it becomes completely unbalanced. In order to grow the market you need to attract more new buyers, not just more new sellers. You need a balance.

And whatever happened to those 11 or so ''committees'' who were comprised of Etsy sellers and were going to address the issues of Etsy sellers???

Did IPO Contribute to Etsy Woes?   Did IPO Contribute to Etsy Woes?

by: Chicago48 This user has validated their user name.

Mon Jun 26 07:24:06 2017

Artfire?

Did IPO Contribute to Etsy Woes?   Did IPO Contribute to Etsy Woes?

by: Moonwishes This user has validated their user name.
Web Site

Mon Jun 26 08:15:12 2017

Some of us ecrater sellers are trying to get momentum going as a viable site for handmade. I don't even sell hommade items as such, just the stuff that helps them make things. If you sell homemade items, please come and you will be very welcome.

Within the last year  I checked out Amazon's homade/handmade category. It was a farce. There were only a few categories of goods open and you had to have permission to sell in that section. On ecrater, no permission is needed no matter what you make whether doll clothes or salt licks for deer. Yes you may have to do some promoting on your own, but even the highest fees are less than places like Amazon.

Did IPO Contribute to Etsy Woes?   Did IPO Contribute to Etsy Woes?

by: Watching the Wheels This user has validated their user name.

Mon Jun 26 09:13:50 2017

ETSY HAS ALWAYS MAINTAINED A SLOP WORK STANDARD.

How many times is everyone going to re-hash the SAME OLD, SAME OLD?

Started off SMOKE AND MIRRORS, and continues as SMOKE AND MIRRORS.

THE ENTIRETY OF THEM JUST DO NOT GET IT. PERIOD.

Bottomline, they just don't make the grade. IF, someone can figure out how to throttle the NEW AGE MILLENIAL SNOWFLAKE SILLINESS out of them, ...

Did IPO Contribute to Etsy Woes?   Did IPO Contribute to Etsy Woes?

by: maxmad This user has validated their user name.

Mon Jun 26 09:38:33 2017

IMO There's nothing wrong with a company going public, it can grow a company 10 fold, but in etsy's case they used the money for free yoga, paid lunches, bought an expensive office, in probably one of the most expensive area's in the world, hired rookie  programmers and staff and fully allowed them to run their business right into the ground, don't get me wrong, these people are probably great at what they do, but should have never been allowed near the ecommerce part of the business, buyers are easily spooked by anything out of place, and etsy sure did a great job spooking them.

etsy deserves what it got, just because they delete posts in their forum they don't like, means nothing, it won't change or hide the facts, they will continue to go lower and lower until nothing is left, or until the last etsy paying cheerleader realizes they've been had.

The naïve sellers who think buying promotion, or a pattern site, making title changes or SEO will help their shops sell, need a serous reality check, I would advise they seek some professional help, asap,  etsy is directing traffic to were they think they will get a sale, period, layoffs and slow sales are just the beginning, just wait and see how truly desperate this company will get to survive, the money and the heartbreak will come from it's sellers, thru fees and manipulation.

Don't be fooled, by ''it will turn around'', ''it's the economy'', ''it's your SEO'', ''not enough items listed'', ''you need a pattern site'', this is all smoke and mirrors, designed to keep you paying, keep you hoping, keep you dreaming, keep you thinking it's you that is the problem.  

WE do absolutely nothing on social media, we pay no promoting, with barely an seo tag, no pattern, no nothing to drive traffic to etsy, guess what?, lately our sales have been the highest ever on etsy, because they probably fit some wacko etsy algorithm for ratio of views / revenue , which we calculate at approx. .20 to .50 cents per view,  Our fine products are manufactured by machine the absolute polar opposite of handmade.

Welcome to the new and improved etsy experiment, a test site filled with crap, that no one wants, and if they do, they can buy it almost anywhere else for cheaper.

Way to go etsy, your almost there,,,,,

Did IPO Contribute to Etsy Woes?   Did IPO Contribute to Etsy Woes?

by: countrymouse This user has validated their user name.

Mon Jun 26 09:46:40 2017

Check out artyah.com

Did IPO Contribute to Etsy Woes?   Did IPO Contribute to Etsy Woes?

This user has validated their user name. by: BuildingMyOwnSite

Mon Jun 26 14:12:54 2017

If you are a seller on Etsy, still Cheer leading, and hoping for success, take a STEP BACK.  REREAD the ENTIRE above post by “maxmad”    Read it carefully, and ACTUALLY THINK!!!  about what @maxmad said:

(STAFF):“.....should have never been allowed near the ecommerce part of the business.....”
(SELLERS):“.....who think buying promotion, or a pattern site, making title changes or SEO will help their shops sell, need a serous reality check.....”
(MANIPULATION):“..... the money and the heartbreak will come from it's sellers, thru fees and manipulation......”
(SEARCH):“.....because they (my items) probably fit some wacko etsy algorithm for ratio of.....”

Wake up Etsy Sellers.  If you aren't one of the losers this week, as ''maxmad'' points out.  NEXT WEEK is your turn, and then, LIKELY, forever.  This stuff is all true........
——————————
Watching the Wheels reminded me of an old quote:   ''You are not special. You are not a beautiful and unique snowflake.''     You can read the quote in context here:

https://en.wikipedia.org/wiki/Generation_Snowflake
>We
didn't stand for this kind of AMATEURISM anywhere I ever worked!  Sure, we always had what we called a flake or two.   But not En Masse!!!  NO OFFENSE, BUT as @Watching the Wheels said in an above post:   “IF, someone can figure out how to throttle the NEW AGE MILLENNIAL SNOWFLAKE SILLINESS out of them, ... “

My Advice to flakes: GROW UP!!!, or better yet, just call out: ''I'M MELTING!!!, I'M MELTING!!!''  See if anyone comes to help.  (Hint: NOPE!)

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