EcommerceBytes-NewsFlash, Number 3165 - October 02, 2013     1 of 5

Etsy Redefines Handmade in Controversial Policy Shift

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Etsy CEO Chad Dickerson announced major shifts and policy changes in a Town Hall meeting on Tuesday, and sellers are still struggling to understand what it will mean, especially those concerned about resellers. The biggest announcement was that Etsy was redefining what could be sold in the Handmade section of the site, and it was also the most controversial.

The company has long struggled with its mandate in the Handmade category that limits sellers to making their own goods with no help from employees or outside services. But now, Etsy is broadening who can sell in the Handmade category to include those using employees and manufacturing partners.

The CEO also made a number of other changes, including news that Etsy would begin providing "urgent" phone support for Etsy sellers, a much requested service, but only for sellers with questions about payments, Direct Checkout or shop suspensions. In addition, sellers who are "permamuted" in the forums will be able to appeal the decision.

In his presentation, Dickerson outlined some major changes coming to the site in January impacting sellers:

1) you can hire whatever number of people you need, and you can hire people in other locations
2) you can use shipping and fulfillment services
3) it's okay to work w/ outside partner and manufacturers if approved by Etsy
4) if you hire people and use outside partners, you must disclose it on your Shop about page.

Having said that, he reiterated that reselling was not allowed in the Handmade category.

While those three permissions sound very basic, on Etsy, it's heresy to some artisans and crafters who say they are already competing with resellers who mass produce the items they sell on the site, often in geographies with low labor costs. The head of Etsy's Trust and Safety team Corinne Haxton Pavlovic took to the Etsy blog to convince sellers the company was not changing its stance on prohibiting resellers.

Sellers attending the Town Hall meeting in person and via the webcast had many questions about the definition of reseller. "What's to prevent Ikea from selling on Etsy," one attendee asked.

"What's the difference between Etsy and eBay now," another seller asked.

Dickerson said two things guided the decision to make the changes: clarity and opportunity. His team settled on three key principles that define what Handmade means.

  • Authorship - the items you sell begin with you;
  • Responsibility - you take responsibility for the way your items are made from beginning to end;
  • Transparency - we are raising level of transparency in the marketplace. You should be open and honest about all the people and partners involved in what you're selling on Etsy.

Some sellers were skeptical that the policy changes would be able to keep manufacturers and resellers away. One seller asked on the forums, "How will Etsy make sure that sellers are divulging that they are using outside sources? Resellers do not divulge that they are resellers, so why would anyone willingly admit their items are being manufactured elsewhere?"

In another piece of news, Dickerson announced that starting in January, Etsy would provide a quarterly update giving users a "full view of what we're doing and why" that will be the basis of a conversation with users. He also said Etsy would start publishing a report at Etsy.com/integrity where user can see the number of flags (reports against a shop); the number of flags in which Etsy has taken action, the number of shops affected, and by region.

EcommerceBytes had a chance to speak to Dickerson after the Town Hall Meeting, look for more on what he had to say in our continuing coverage this week.

What do you think of the news from Etsy? Comment on the EcommerceBytes Blog.


About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.


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