EcommerceBytes-NewsFlash, Number 3166 - October 03, 2013     1 of 3

The New Etsy: Q and A with CEO Chad Dickerson, Part 1

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Etsy is redefining what it will allow sellers to list in the Handmade category on its marketplace. CEO Chad Dickerson made a number of announcements at a Town Hall meeting on Tuesday, but the one that had most sellers buzzing was the decision to let artisans and crafters use employees and manufacturers to help in the process of making items listed under "Handmade."

Sellers in attendance and those watching the Town Hall webcast had questions about how this would impact the problem of resellers on the site.

After hearing the questions asked during the Town Hall event and on the Etsy discussion boards, EcommerceBytes Editor Ina Steiner had a chance to interview to the CEO after the meeting concluded.

What are the highlights of today's announcements?

Chad Dickerson: To recap: we talked about communication, and I really want Etsy to do a better job communicating with the community. We made three key commitments: the first is a quarterly update to the community about what we're building and why we're building it; the second was around providing more insight into the whole flagging process and the operations of the Marketplace Integrity team, and we're sharing some data there (at Etsy.com/integrity). The third was providing urgent phone support. I'm sure you're aware that that's something been that's been asked about for quite some time on Etsy; we're happy to provide that, that is the commitment around community.

The next part was around policies. As you know, the policy debate on Etsy has really gone back many many years, all the way, even before I joined the company five years ago. We announced a few key changes to policies. The first is that our sellers can hire any people they need to to run their shop. The idea here is we saw we were spending a lot of time listening to sellers who didn't have a clear understanding of how many people they could hire and we weren't providing clarity, so we wanted to provide absolute clarity and give sellers the freedom to hire help. Of course, we're making it mandatory to disclose any of the people and their roles in your shop on your About page. The About pages will be mandatory starting January First.

The second is we'll allow sellers to use shipping and fulfillment services. We have prohibited drop shopping and the use of other shipping services. I think that's really hurt all sellers, not just handmade sellers, it's hurt vintage sellers and supply sellers. So we're opening the door there. Sellers tell us they spend too much time standing in line at the post office when they want to be making things and buying their vintage collections and that sort of thing.

The third one was, we're now allowing sellers to apply to Etsy to partner with outside manufacturers to produce their designs. This is probably the most significant policy change. What we've found over the past several years is that there's been a lot of confusion about how much production help you can get on Etsy. We've had this idea of partial production for quite some time and it's been incredibly confusing to sellers.

If you look in the forums you can find many sellers asking, What does this mean? What does partial mean? It's never been clear. We wanted to make it really clear given there's a huge diversity in how people make things. Just like the number of people who work in your shop, you'll have to disclose any manufacturing partners that you use, and that also has to be on your About page and the listing page as well.

Then, reselling, which has been a flash word in the Etsy community for some time. Reselling is still not allowed; as a seller you have to demonstrate authorship, responsibility and transparency in producing your items.

That's how we define what "handmade" means on Etsy and we've done it in a broad way that we think fits all the different ways that sellers on Etsy make things and produce things.

I have a ton of questions - it's a lot of news. One of the things you just said about being able to have transparency - that is on the listing page and the About page, but I'm curious. If I have somebody manufacture mugs for me with my design on the mug - the shopper who searches mugs on Etsy may encounter now tens- or hundreds-of-thousands of mugs. How are you going to let shoppers narrow down search results to mugs that were made from one seller from beginning to end?

Chad Dickerson: I think that gets to the heart of what "handmade" means on Etsy. I don't know if you heard this in the town hall, but there was one seller who asked the question, around the definition of handmade, and we've seen this for years - it's clear that the definition of "handmade" is not shared by all people everyone has a different opinion about what it means.

The policy that we have that defines what handmade means on Etsy, and we expect that people in the Etsy community will still have divergent opinions on what handmade means. What we've found is that in practice, the way things are made and the way things are produced, it's really the breadth and types of things you see on Etsy, it's very hard to define handmade in a specific way across all the things that are made.

In the case of the mug, you may actually be able as an individual seller to fire up a kiln and you may be able to make that yourself. You may still have to buy your clay from somewhere and your glazing from somewhere, but in many categories it's hard to define what the line is.

Even in some of the most popular categories, people are doing partial production already. It's hard across all categories to define all the things that are made completely by one person. The prototypical example would be if you're a knitter, to be a single artisan with no dependency on anyone else, you would have to raise a sheep and shear the wool, and make the yarn and knit it.

What we found as we looked across the entire community is that the way the world and creativity are changing, that it's almost impossible to distinguish across all the categories unless you're doing what I describe with the sheep and the wool. So handmade is difficult to describe.

To answer your question more clearly, how are we going to continue to make the small seller part of what Etsy is about, we need to do a better job with things like search and browse to make sure the small seller and sellers who may be larger are represented in a fair way.

Frankly that's on us on the product side. We think there's room for all kinds of success on Etsy. And the solo maker, however that is defined, is still welcome.

I was curious if you are going to make some changes, I guess it would have to start with how the seller creates the listing, certain checkboxes, so if you're a solo maker you could indicate that, and Etsy would let you narrow that down in search. But you didn't say that. You said you were going to work on a better search and browse experience. Is that one of the considerations, or how else would you do that?

Chad Dickerson: I think when the way the listing process is going to work now, you're going to have to, when you list an item, you'll have to say, I made this with a manufacturing partner, and you have to disclose who that is.

What I'm saying is that there's so much diversity on the site and so many ways of making things, that being able to define that in a way that works for all categories and all people and all the different types of production processes is very difficult because of the divergent ways that handmade is defined.

There's lots of things under consideration, no one thing in particular has been decided on, but of course we'll let you know if any specific changes get implemented in search.

OK, great. I was curious if you anticipated an influx of sellers with these policy changes, and if so, how that would would impact Etsy infrastructure, and how that would impact longtime Etsy sellers?

Chad Dickerson: Right, that's a great question. The way that we've made these decisions is really around what we're seeing in the existing seller community. These changes were not designed to bring on a whole new group of sellers to Etsy. They are really designed to basically address some of the needs that we've heard from sellers of all sizes, the shipping changes and the hiring help, those are not just for larger operations.

We had been hearing, and this is really disturbing to me, we've been hearing from Etsy sellers who started on Etsy just like anyone else and achieved a certain degree of success, and when they became successful on Etsy they started to feel unwelcome and unsure and a lot of anxiety about whether they were still welcome on Etsy. And the way we're thinking about this set of changes is that we want people to be able to start on Etsy and grow on Etsy. We don't want sellers who at their greatest point of success feel unwelcome and anxious.

So it is about seller retention, but do you anticipate an influx of sellers?

Chad Dickerson: I think it's really too early to tell. I said this in the town hall, we haven't, we've spent all our time talking about doing things for the community and creating clarity and opportunity. We haven't spent five minutes trying to model the business and financial impact because we think this is the right thing to do for the marketplace and everything else will work out.

Is there a distinction between shipping and fulfillment services and drop shippers? I got the idea that you're saying that drop shipping will be allowed?

Chad Dickerson: In this scenario, with the new policies, drop shipping would be allowed.

The new policies go into effect January 2?

Chad Dickerson: They will not be enforced until January 1 - the beginning of the year. But if sellers want to take advantage of some of these changes now, they can do so. One really important point on the drop shipping, and this goes to the responsibility part of how we're defining handmade - authorship, responsibility, transparency - regardless of what shipping services that anyone uses, we still expect sellers to own the entire customer support experience, as they have before.

So whatever shipping partner you use, as a seller, you'll still be responsible for making sure the item gets to the right place and is high quality and all of those things.

If I do get permission from Etsy to use a manufacturer, the manufacturer or whoever is making the product can actually ship directly to the buyer - is that allowed? So somebody other than the seller - an Etsy-approved manufacturer - could ship the item to the buyer?

Chad Dickerson: That's correct. We think that, we can't predict what all sellers will be using or how they'll use that, but we think this underscores the idea of responsibility and how, regardless of how the item is shipped, you still take responsibility for how it's made and how it gets to your customer.

Do you anticipate Etsy becoming similar to CafePress where people can upload their designs and have it made and shipped to the buyer?

Chad Dickerson: I don't think so. I think the ethos and the spirit of Etsy is very different than CafePress. We'll always be about really interesting, unique items, connecting people to commerce, items with stories behind them.

While I'm sure you can probably find today things on Etsy that may be similar to things you find on CafePress, we don't see the long-term success of the company and the community being that type of work necessarily. But there will still certainly be some things that are comparable between those two sites.

Look for Part 2 of the interview with Etsy CEO Chad Dickerson in the next issue of EcommerceBytes. (Part 2 of this interview, is now available.)

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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