|Tue Oct 1 2013 16:48:08|
Can Etsy Fix Reseller Problem with Transparency?
By: Ina Steiner
Etsy announced a major change that broadens the definition of "handmade" on its marketplace. But some artisans and crafters fear Etsy is turning the site into eBay and will actually exacerbate the problem of resellers. When asked that question during a town hall meeting this morning, 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."
Etsy and its sellers have long struggled with what it means to hand make goods given Etsy's restrictions in the Handmade category - see this March 2012 EcommerceBytes article, "Etsy Struggles to Define What's Allowed in Handmade Category."
But limiting sellers from scaling their business means they look for other channels on which to sell, and it means Etsy itself is limiting its revenue growth. Broadening the definition of handmade can increase its bottom line, but if the site becomes inundated with mass-produced goods (even if those goods were designed by Etsy crafters), it could turn off its base of buyers looking for unique arts and crafts.
Etsy will now allow sellers to hire an unlimited number of employees and hire outside firms to manufacture part or all of their goods. Sellers hearing the announcement during a Town Hall meeting that was also webcast appeared to be struggling to understand how Etsy would prevent resellers from taking over.
After the call, I spoke to Dickerson about these issues and asked him if search could become inundated with manufactured goods. "The definition of handmade is not shared by all people - everyone has a different opinion about what it means." He used an example of a knitter - do they have to raise the sheep, shear the wool and make the yarn and knit it to be considered a seller of handmade goods?
Defining handmade is difficult given the breadth of items on Etsy. "We need to do a better job with search and browse and make sure that the small seller and other larger sellers are represented in a fair way - that's on us, on the product side."
So would Etsy have a checkbox to indicate a seller is a solo maker and then allow shoppers to filter those items in search? Dickerson said now, when you list an item, you'll have to indicate if you use a manufacturing partner. But there are lots of things under consideration, no one thing in particular has been decided on.
Etsy seems to believe that by giving sellers more flexibility in the "making" process but requiring them to disclose information about that process - including the use of employees, designers and manufacturing partners - then buyers could make better informed decisions about who they purchase from. It's all about transparency and authorship, and telling the story behind the products.
There was a lot of news coming out of the Town Hall Meeting, which will be covered in Wednesday's EcommerceBytes Newsflash newsletter, including the following:
- Sellers will be able to use shipping and fulfillment services - and that includes dropshipping in which a manufacturing partner ships to the buyer, according to Dickerson.
- Etsy wll create urgent phone support for Etsy sellers (restricted to questions about payments, Direct Checkout or about shop suspensions).
- Etsy will create an appeals process for users who find themselves "permamuted" on the Etsy forums;
That first point will be good news for vintage sellers who use automation to ship or fulfill orders.
Let us know what you think of this major shift in thinking at Etsy and how it will impact sellers, search, traffic and sales.
UPDATE: See my interview with Etsy CEO Chad Dickerson in EcommerceBytes Newsflash. Part One is now available.
UPDATE: Part Two is now available.