EcommerceBytes-NewsFlash, Number 3167 - October 04, 2013     2 of 4

The New Etsy: An Interview with CEO Chad Dickerson, Part 2

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Etsy is loosening the guidelines around what sellers can list in the Handmade category. Etsy CEO Chad Dickerson also announced a number of other policy changes during a Town Hall meeting with sellers on Tuesday, and after the meeting, he sat down with EcommerceBytes Editor Ina Steiner to talk about the changes.

In Part One of the interview, the CEO answered questions about how the policy changes will impact search, whether drop-shipping will be allowed, and whether he thinks Etsy may become similar to sites like CafePress. In Part Two, he talks about the difference between Etsy and eBay, how Etsy will enforce its new rules about the use of manufacturing partners, and the Marketplace Integrity efforts to keep sellers in compliance with site policy.

I heard somebody in attendance, maybe it was an online question that came in, about eBay: was Etsy turning into eBay? I have to ask you because you said you don't like eBay, could you expand on that in the same way you just did with CafePress about the difference in terms of ethos? What is it about eBay that makes it different from Etsy?

Chad Dickerson: I think eBay is an undifferentiated marketplace. You can sell cars, and someone said you can sell houses, you can sell computers, all these sorts of things. Fundamentally, Etsy is about people and creativity and making things that you are passionate about. We have Etsy teams and all these sorts of things around the world, so I think that really the spirit and soul of the company is fundamentally different.

Etsy will always be about creative people, it will always be about community. While I don't work for eBay, from the outside looking at eBay, that's not what eBay is about. As the leader here at Etsy, I think it would be a mistake for Etsy to try to be another company that is already successful in some way. It doesn't make sense for us to be like another company.

I went on to the forums too, so based on what I'm hearing from your sellers, I wanted to run some of those things by you. Some sellers said they were concerned about low sales and visibility, and they weren't really clear or maybe felt brushed off about the response to that question during the town hall meeting. What would you say to sellers who just feel they are buried in search results or are not getting sales?

Chad Dickerson: I can understand why sellers are frustrated, because there are a lot of sellers in the marketplace; some are doing well, others are not doing as well, there is definitely competition. It's quite possible there are individual sellers whose sales are down.

We're always looking closely at search and browse to try to make sure that the most possible sellers are represented and are represented in the right way. In the town hall, we asked the person who was asking the question to talk to our team so we could maybe do a shop critique and could look at some of those specific issues. But it's quite possible there are individual sellers whose sales are down. I think the important point is, we're looking at it. We're trying to make decisions that will make the most sellers be as successful as possible. I don't want to deny anyone if they feel their sales are down, that could very well be true and is true.

I'm always interested in search and browse. It's really fascinating to see, especially as the marketplace grows and scales. I would just put this out there to you if there are any opportunities to talk about what you are during in terms of search and browse I'd love to have that conversation at some point. But I want to ask you about another thing I was hearing from sellers. Here's a comment from the forums: "How will Etsy make sure sellers are divulging that they are using outside sources. Resellers don't divulge that they are resellers. So why would anyone willingly admit that their items are being manufactured elsewhere?" How would you address that concern?

Chad Dickerson: Even when Etsy was smaller, we said that there will always be bad actors in the marketplace. There will always be people who don't play by the rules. We always have to, it's a little bit of a cat and mouse game. We're always trying to improve our techniques to get them out of the marketplace. We have found that the vast majority of Etsy sellers are very trustworthy and provide the information and run their businesses very honestly. So ultimately we do trust the sellers overall to provide the information and be honest about it.

One thing I really want to emphasize, and I'm really excited about this, is because we're going to be requiring About pages for sellers, more than ever - and again you have to be honest for these to work - but other sellers will be able to see the story behind their peers' shops. If there is someone you think is a reseller, you'll be able to see their About page and how they describe themselves. I think that's a really big advance.

Our sellers have always been smart and perceptive, and I think what will happen is the seller community and our software and all the things we do to battle things like resellers will have more information to make those decisions. There will also be more information that the community can see that they weren't able to see before.

On those About pages, are sellers required to disclose their real names?

Chad Dickerson: I don't believe you have to disclose your real name on the About page.

I know there have been concerns about privacy or safety issues in the past. And then, I saw today and I've heard it before: sellers saying that Etsy features the same shops over and over again. How would you address that concern?

Chad Dickerson: I've heard that before. I can say that when that happens, when we feature the same shop a number of times, its not something that we do intentionally. It could happen. Kellan (Elliott-McCrea) our CTO, talked a little about this today. He talked about how in the Browse section sometimes the same seller is featured multiple times. The team is working on that.

We're always trying to make the site more diverse in terms of the number of different sellers, we're working on that, specifically in Browse, which we talked about today has a certain curated aspect to it. The work we're doing will help with that.

So stay tuned on that. That will broaden the number of shops that are featured.

I wanted to ask you about the whole idea of marketplace integrity. This is something where it's hard to scale that kind of, you know, you're going to get reports, and I imagine the bigger you get, the more reports you get. How are you dealing with those scalability issues?

Chad Dickerson: I spend a lot of time thinking about this and working on this too. I mentioned in the panel today that when I joined Etsy years ago, the flagging process - and this was when Etsy was much smaller - it took a very long time to follow up on flags. Over the past year to 18 months we've developed systems so we are able to review flags generally in 24 hours, and sometimes longer, sometimes shorter. We've also written software that detects patterns so we can catch things that don't look right.

In the same way that someone who runs your credit card, it can get declined. We have a similar kind of technology that looks at odd behavior and that sort of thing. As we've grown, we've built systems and software that enables us to review it faster. That's how we scale.

One of the interesting things, and it's too early to tell exactly how this will work out, but as we go into January when the About pages will be required, I think the quality of flags and the quality of the help we get from the community will go up because sellers will have a deeper view into the shops, so that will help us scale too. It is in some ways very much like what credit card companies do, what email companies do when they find spam. It's kind of an arms race, we always trying to get a little bit ahead.

An Etsy spokesperson jumped in to add the following remark:
I just want to add one thing. We are definitely always working on our software detection, but the application process is very much meant to be a human process at least to start, because we believe it will be a learning experience and we want to have detailed, in-depth dialogs with our sellers about how the choices that they're making and how they got to the point where they are manufacturing. I'm not implying that will be a lengthy process, but it will be a detailed process, and some part of that will always be a human process.

Chad Dickerson: I want to add one thing on the manufacturing point. We've seen, in our wholesale marketplace where we were allowing site production, we've seen such a diversity of partners, we've learned from that process that we think sellers will do the right thing. We see a lot of sellers working with local, small shops in their community and sustainable operations and that sort of thing. The whole world of manufacturing has gotten more personal and sustainable in the past several years.

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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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