Spy Reporter Lists Etsy Problems - But Are They Terminal?

by: Snapped

Clearly Etsy (and they are not the only one) slid off their foundation a while ago - all for the sake of ad revenue.  And that’s all worth some due consideration.

Can’t help but notice the headline banner ads right here though, from Etsy, that feature items clearly NOT “ homemade, vintage, or craft items” either.

Just sayin.  Like that other classic ‘vintage’ ad tagged - “Things that make ya go Hmmmm”.

by: Rexford

A brilliant and well written article that I hope eventually makes it to the eyes of Etsy's Board of Directors.  The CEO should get down on his hands and knees and thank the author for not using the words "greedy" and "unethical" to describe Etsy.  And I can't think of a better word to describe what has happened at Etsy, eBay and Facebook than "Enshittification".  The author has pretty much summed up what sellers/posters have been saying for years.

We all knew that when Etsy went public that it was the end of the party.  We saw the same thing with eBay.  Both companies lost their soul and turned their back on their original mission and their "values" (if they ever had any values). Greed corrupts and it will corrupt a marketplace. These companies are beholden to Wall Street and share holders, not the sellers who actually provide the products that make the marketplace successful.

We also knew that ad words and ad word schemes completely turn search into a clusterfug and they "rig" search.  Those selling counterfeits and poor quality items  who buy advertising rise to the top in search while quality items fall to the bottom.   Additionally the money grabs by the marketplaces (taking cuts of shipping prices, continually raising fees, forcing sellers into ad schemes based on their sales) also drive great sellers away.  And algorithms that are implemented causing sellers to have inconsistent sales based on who the algorithm favors.  (more rigged search)

As they say, you reap what you sow.   Will Etsy right the ship or continue down their dark path of greed?  I'd like to think so but don't count on it.  We are just "noise" to these marketplaces. They will likely label the author as noise as well.

And yes, Mr. Lalljee--write about eBay.

by: GetAGrip

Etsy and Ebay are parasitic bed partners. Same set of problems. Neither one is going anywhere soon. Its all wishful thinking. LIKE ITS NOT GOING TO HAPPEN.

by: Fruitylovesyou

yes ebay and amzn and shopify. And pypl. PayPal sat on their hands because mummy told them to

by: comments

One could change the name in that article to ebay and the exact same facts would apply. Ebay/Etsy, as I met them, offered items that were unique and hard to find with endless possibilities. I have bought thousands of unique items that would have had me trekking the globe in life long searches otherwise. Both were founded on a sound idea taking advantage of the stupid policies their competition to get ahead, and once they reached their zenith they went stupid.

John Doneahoe came in around 2007-2008 and absolutely destroyed "unique" in favor of copying amazon policies that didn't translate to the long term success of ebay. Alas Etsy was born. They had a great idea and a greater following. Then Etsy watches ebay copy amazon and translates those policies to its marketplace. They decided to follow stupid?!

Now it is one arbitrary onerous policy or price increase after another on all the platforms. They made selling not worth it anymore to many leaving these marketplaces in a potentially profitable void, but all the sellers with inventory was essentially banned for not giving it away. That void was later filled with dropshippers who owned no inventory and had no skin in the game.

Now we are just competing for visibility quality against trash. My quality inventory, that I personally own and hand packed versus the knock off, dropship or unbranded seller with nothing to lose lists a dumpster dive find, calls it new open box and pays a 20% ad rate so it shows that embarrassing hunk of #$!@# to the community in place of a 2% ad rate item that might actually sell.

The over priced commission model where we pick up the slack for those banned for no reason, now have to compete against people actually doing terrible things, and I submit that "terminal" exactly describes the state of affairs on all these platforms that are just cut and pasting policies from their competitors.

Will wallstreet ever correct this issue? Unlikely, they are all quivering with delight because for the next month people will be reselling bubble gum pink Stanley mugs. No one from the investors to ebay/etsy staff understands the billions they are leaving on the table that real change can bring.  

by: Snapped

Store to Core.  Remember that “disruptive transformation”?

It’s when eBay decided to jam all the vintage, OOAK, unique and suitable for resale used items together with all the ‘retail store’ items under one search umbrella.  Auctions, BIN, Offers, didn’t matter.  That’s when the wheels fell off their wagon.

In doing so, they completely (purposefully) disregarded the fact that collectively, their “core” marketplace was a completely different model, with different buyer expectations and tolerances than for ‘retail model’ sale, payment and return policies.  In fact, they were untouchable, and growing.

But there was a REASON the core items were not ‘retail’ priced and retail modeled.  Because the core item sellers could not AFFORD to adopt the retail market expectations.  And the items themselves didn’t warrant it, nor did the buyers expect them to.

Not talking about assurance in getting what was advertised - that should apply regardless.  Talking about a buyer that bought used, and now were ‘given’ all the perks of new.  Expectations of being able to buy multiple OOAK items with only one available.  Pushes to list EVERYTHING at BIN - decimating the ability for the auction market valuation model.  And destroying the viability of auctions.

Items that used to list at .99 and sell market demand price now got (still do) one or two bids instead of dozens.  And note; auctions didn’t really work for toothbrushes, CD’s and other commodities either, as would be expected.  They had their own model.

But for the unique, the BIN model would actually turn away buyers seeking fair bargain - unless the seller was willing to take a bath.  And no casual, OOAK seller could hope to match the affordability of a huge retailer to absorb ‘shrinkage’ and free returns.  

The models were not compatible.  Still are not.  

So instead of leveraging their foundation, and adding TO it (nothing wrong with seeking growth by new market penetration), they “let go of a successful past” on purpose, trying to emulate AZ, who already dominated that market, and couldn’t touch, so didn’t try, the resale, used, auction model.  

Stupid, stupid, stupid.  With Etsy following suit, like the loyal puppies they are.  Though BIN is fine for their stuff, as the artisans can set their own thresholds.  And Etsy can’t engineer auctions anyway. But it’s still a wholly different market.

Interesting to note that just recently, eBay is desperately trying to “remind” buyers that eBay still does offer the unique and vintage.  As in, please come back.

Too late though.  They killed it.  Wouldn’t listen to its death cries.  Disrespected their core.  

They can - both of em - go spit.

by: ThebigR

I haven't changed my business model since day 1 back in 1998 my ebay sales grew 18% last year and etsy sales grew 32%. They can do as they please doesn't affect me what so ever..  

by: Stone Cutter

*** I’ve done my part ***

For years, I’ve done my part in stating my opinion to the public that Etsy is not on the right path. And now, the reality is made clear.

Etsy is not going anywhere. As long as Etsy continues to make money for their shareholders, Etsy will survive….but for who? How will Etsy continue to drive their business?

Having said that, as a part time artisan jeweler, my sales continue to be crazy good as I increase my price points for better profit margins. For my shop, it’s all about the quality of Buyer. Can Etsy continue to find for me the affluent professional woman with expendable cash?

Time will tell how Etsy plans to fix their downfall.

by: imaglitch

I really believe that going public was the turning point for Etsy.  Per the article:

“Etsy’s listing on the stock exchange transformed it into a company that needed to grow and grow fast so as to be able to satisfy its shareholders and their expected returns on investment,” Thomaï Serdari, a marketing professor at NYU specializing in luxury marketing and branding, tells SPY. “When there is a push for growth that is not commensurate with the initial values of the company, misalignment is bound to appear.”

Etsy answers first and foremost to their stockholders and all decisions are driven first by earnings/money, not the mission.  Stockholders are only concerned about returns and are never satisfied.  There are many companies who grow bigger after going public, but how many become better?  

by: LDWCallsOut

I agree that the turning point for Etsy was going public.  Etsy stopped removing items or shops that were selling items not handmade, vintage, or supplies even when there was clear documentation leaving no doubt during the Summer of 2015.  Just months after Etsy went public.  Items that do follow the published ''house rules'' today are a minority of listings on Etsy.  

by: pace306

The issues are as "terminal" as Etsy wants them to be.

We will be having this same conversation again when eBay reports Q4 numbers. "Blah blah GMV is up %3, buyers and sellers are down, but revenue is up %7" (or something like that).

What does it have to do with Etsy and this article? Alot. Because as said so well above - the 2 monkeys (eBay and Etsy) sit and flig poo at each other (copy each other) but instead of learning from each others mistakes - they copy the WORST parts of each others business ideas.

Instead of GROWING business, each one comes up with more ideas to hurt the very people they rely on to make their business happen. And because "so what, what are you going to do about it?". THAT is how both platforms feel about sellers.

Any "issues or problems" that either have are self inflicted. "Pigs get fat, hogs get slaughtered" is the old saying and its never been more true for EITHER of these two.

Amazon tried handmade - I was there at a meeting with them - it lasted 3 months then died a horrible death. eBay treated handmade and vintage sellers like trash and expected things from them that are opposite of how they do business and have do it for 30-50 years. Etsy, learned that the english translation of the word Junk in Chinese is FREE CASH.

I dont sell on Etsy - my wife does - but hasnt in a long time - too much headache - so Im not as familiar with them and THEIR brand of robbery - as I am with eBays.

Jaime is still making his millions, hes making balloon animals, and doing card tricks upon request. Griff - eBays head Dummy (he wrote a book on it - its not just me being mean) is also still raking it in, and so are the other 9000+ do nothing employees. Most importantly, eBay is giving back 8 cents a share or something so Wall Street is happy.

Applying that to Etsy - as long as the same thing is happening there - theres no "terminal" anything.

BUT, poor management by these companies birthed Mercari, Reverb, Poshmark, Top Hatter, The Real Real, and others. Each site is mall but together they take a bite out of eBay and Etsy's pie .......

by: Ihatethebay

Every single one of us sellers on this page knew that Etsy would eventually ape all the worst attributes of evilbay and thus morph into "Etsbay", a term that I coined, btw.

The two giants are spiraling downward but the question is: who will pick up the slack and draw new sellers? Bonanza? Not likely as their CEO is a MBA who never created something to sell nor scoured the thrift stores, garage sales and swap meets for the same goal.
Shopify? Mercari? Poshmark?

Once again, the seller is left in the lurch, all because the CEOs and boards got greedy....

by: BurglePork

Etsy had trouble looong before going public, mainly because they couldn't keep up with enforcing their own rules. They could never remove all the not-old-enough vintage or the not-really-handmade stuff. It takes WAY too much skill to identify all of that so even if they had tried, they could never build a big enough workforce to do it (IF it can even be done!) I heard SO many stories about people who were shut down arbitrarily, while Etsy featured phonies on their blog. Once they went public, the focus shifted from building a marketplace to increasing cashflow so they could appear as profitable as possible, and things merely went from bad to worse.

IMO that Spy article is kind of a mess. It cites a private equity consultant who has admittedly never used Etsy and doesn't seem to understand it, opining "Etsy products are...not the sort of 'durable goods' that belong in a household budget." Certainly the vast majority are wants rather than needs, but handmade (& vintage) goods are by definition a luxury product - "household budgets" don't really enter the equation. Etsy is for disposable income. Why even quote that guy?? Serdari's quote, however, is on the mark, and I think it's telling that her specialty is "luxury marketing and branding."

The article goes on to say that "people who sell on Etsy [don't] understand the dynamics of public markets," a bold assumption IMO, and kind of irrelevant?? Etsy has curated a site that, instead of cultivating an emotional relationship with the buyer, forced sellers into a race to the bottom, and to compete on price rather than on experience & quality. I don't know whether the kind of platform Etsy originally wanted to be would even be viable, but I do know rich people have to shop somewhere. Etsy's ideal customer is the kind of consumer that goes to Disneyland more than once, or likes to go on cruises, or is constantly redecorating their home or curating their wardrobe, i.e. people who appreciate nice things and have money to spend on them. While I think their advertising kind of looks as if Etsy understands that, the way they've run the site does not.  

by: Snapped

“ people who sell on Etsy [don't] understand the dynamics of public markets," a bold assumption IMO, and kind of irrelevant??”

Bold indeed.  But it goes beyond that.  People who sell should NEVER assume they know either ANY buyer’s motivation OR how much money they have in their pocket.  

Moreover, people with no experience selling on ‘public markets’ should never assume THEY ‘know better’ about how a particular market works (and there are many types based on method and item) better than those who actually have experience doing it.

by: Chicago48

I have no complaints against Ebay like some of you.  I'm glad it's a platform and hope it stays in business.  How many of you will boo-hoo when it goes away?  I'm now listing on Depop, owned by Etsy, and have a few minor complaints.  Mainly how to sell an item once you accept the offer.  It's screwy.  Buyer has 24 hours to pay for the item after the offer is accepted, unlike Poshmark which is immediate payment and now Ebay.

by: Marty2020

Frankly? Blah blah blah..reading the same thing about ebay year over year (and over year). Now etsy...every critic needs his 15 minutes of fame

by: pace306

48

MY complaints (such as they are) are designed to try to make eBay BETTER, not go OOB.

My relationship with them goes back to 1998 and I fully understand their purpose, their "supposed goals" and even (back then) their ideals.

Its when the greed, lies and theft came in - that we "no longer best friends".

They ARENT going OOB regardless of what I or anyone else says - they make way too much money, have way too many connections and - Ill go out on a limb here - really are doing better/have more cash then they let on (2 sets of books).

The one and ONLY thing that motivates THEM is big salaries and a cushy lifestyle - something they wont ever give up.

Back to Etsy - Id apply the same thing there too. When the focus changed from concentrating on having the best selling platform to making the most money - things fell apart. Ebay went through the same thing. Jaime doesnt know about selling on his own platform. Hes never experienced the Abysmal customer service, the always wrong VERO dept, never had his money held, and was never told "taking losses is part of business - here take one - for the good of the team).

Josh - never experienced it either on his side.

Thats why "its ok" to have crappy quarterly numbers - EVERYONE who counts is getting paid ... except the sellers who are leaving - and going to other places like Mercari and Posh.

And while those places arent "paradise", in some ways they are better then the other 2 - and the creation of them and Whatsnot , Facebook Marketplace and Tiktok Marketplace - shows that there's a need for a place to have simple transactions with out "Daddy" always around.

Whether or not either marketplace improves - well that depends on how much they can get away with before something BAD happens. For Etsy - it may be the exodus of the last few good sellers of real handmade and vintage - leaving them with all Chinese garbage. For eBay - it might be the lawsuit against them by the US government - though it wold probably hurt them not kill them as the DOJ doesnt want that kind of blood bath on their watch in an election year,

by: walkinwillie

Been selling on eBay since 1997 and while I haven't liked everything they have done, it is still a very effective marketplace for me. Sure, I don't like their fees but instead of complaining about it, I am in the process of opening up my own Shopify store and hope to move some eBay customers over to there in a "slow, over time" way. I see way more "rage against the machine" comments than ones that not only rage but list exactly what they will do to better their own situation.

by: I_Fix_Dolls

I am both a buyer & a seller in a sort of niche market, "I Fix Dolls" is not just a name. I need a supplies of 100 years old, (give or take 50 years) items to do what I do. Of course I look for the best prices on both "E" places, now with the shipping increases, taxes the government keeps inserting (There is a "Self employment tax for people like me trying to supplement the pitiful Social Security money) and buyers competing for limited items, and sellers TRYING to make a little money it's taking more time and money. When I do the work & have a finished product, I too have to compete against modern items and a small buyer population for my items.Lately Etsy has been crazy. Sellers have almost NO protection from scammers and thieves. No "Real people" to handle cases brought against sellers. Most sellers who have items worth $250 are going elsewhere as they are not protected if they make a sale.I hang in there, as for me even a little money is better than no money.  

by: toolguy

Lalljee lost me right at $37 billion!

That was 2 1/2 years ago.

It's at $9 billion with a 30 P/E ratio right now.

A dog with nowhere to go but down. . .I've never bought anything from Etsy, neither has my wife.