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Etsy Clarifies Guidelines on Outside Manufacturing

In advance of today’s Town Hall meeting (January 28), Etsy posted an announcement that it was clarifying guidelines on outside manufacturing that it had announced in October at the company’s last Town Hall meeting that broadened the definition of “handmade” on its marketplace.

The decision to allow sellers to use some outside manufacturing on “handmade” goods was controversial, and when asked last year if the policy would turn Etsy into eBay and exacerbate the problem of resellers, Etsy CEO Chad Dickerson said, “Believe me, I don’t want to be the CEO that turns Etsy into eBay. I don’t even like eBay.”

As a result of the new policy, Etsy required sellers to apply if they wished to partner with manufacturers to produce their designs, and created exemptions, including “digital prints and posters, music, books you authored, and 3D printed items.” However, Sarah Abramson, who leads Etsy’s Marketplace Integrity team, said on Monday the exemptions turned out to be “more confusing than helpful.”

Therefore, Etsy is eliminating those exemptions. “Anyone who works with a third party to produce items they’ve designed will need to apply to sell those items on Etsy. We realize this is creating more work for some sellers who’ve been successfully selling on Etsy for years, but it’s the best way to be fair and clear.”

Abramson also clarified that sellers did not need to apply to tell Etsy where they bought pre-made components. “If you buy the supplies you use to make your items from a retailer, you do not need to apply. You only need to apply to work with an outside manufacturing partner if they contribute to making your designs.”

She also revealed that Etsy had approved less than 50% of applications reviewed since the new policy took effect in the fall. She provided additional information about the applicants:

  • On average, the applicants have been selling on Etsy for about 2 years.
  • Geographically, applications have come from a fairly representative sample of sellers, and Etsy has received applications from 48 countries.
  • For about 80% of approved applications, the manufacturers are in the same country as the shops.

Etsy has also been proactively contacting certain sellers and asking them to fill out the application.

“Looking into 2014, we’re focusing on two areas we can improve upon – making the application easier to fill out and getting back to you sooner with the results of our review.”

Etsy is holding a Town Hall meeting today, which is being webcast beginning at 11 am EST.

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Ina Steiner
Ina Steiner
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). She is a member of the Online News Association (Sep 2005 - present) and Investigative Reporters and Editors (Mar 2006 - present). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com. See disclosure at EcommerceBytes.com/disclosure/.