Will Etsy's New Policies Turn it Into eBay? The handmade marketplace will allow sellers to hire staff and use outside shipping and manufacturers.
By Kathleen Davis •
Opinions expressed by Entrepreneur contributors are their own.
"Is Etsy selling out?"
That was the question posed by Kimm Alfonso of Etsy's Seller Education during today's Town Hall event where the ecommerce site announced major changes to the way its handmade community operates.
The question came as a response to Etsy CEO Chad Dickerson announcement of three big policy changes that effect sellers. The new polices allow sellers to:
1. Hire staff. Etsy sellers are now allowed to hire help in creating the items that they sell and those employees can live anywhere. Previously sellers could have their shops shut down if they had help from people in other parts of the county or world.
2. Use shipping services. Sellers will be able to use outside shipping and fulfillment services. They will no longer be required to personally ship all of their items.
3. Use manufacturers. Etsy sellers will be allowed to use outside manufacturers to produce the designs they create. They must submit an application to the Etsy team to make sure the manufacturer meets Etsy's ethical guidelines.
Related: The 'Etsy Economy' and Changing the Way We Shop
Dickerson said the changes are in part a response to sellers who say that the site's restrictions have made growing their businesses -- or in some cases, even meeting current demand -- impossible.
When the policy changes go into effect in January 2014, all sellers will be required to disclose their employees and share whether they are using manufacturing services on their listing pages. Etsy will also be redesigning seller pages.
Transparency, Dickerson and the panel of Etsy staff reiterated, is at the heart of keeping the community spirit alive on Etsy. Dickerson outlined principals that describe Etsy's new definition of "handmade":
1. Authorship. Items sold in the handmade marketplace must have been designed by the shop owner (even if a team of people helps create them).
2. Responsibility. The shop's owner has to know how the items are being produced during every step of the processes.
3. Transparency. Sellers must disclose who is involved in making the items they sell and where they are located.
Etsy reiterated that sellers in its handmade marketplace cannot "re-sell" a product, meaning they can't take a new, finished product they had no role in creating and sell it to someone else unchanged.
The announcement of the changes raised a lot of concerns among sellers at the event and online, with over a thousand questions pouring in following the announcements. The primary concerns were that sellers with outside help would have a competitive advantage over smaller sellers unable to afford such help and that the distinction between the two wouldn't be prominently displayed for buyers to distinguish the difference.
Concerns over the use of overseas manufactures, and the authenticity of the Etsy mission have been ongoing as the site expands.
So is Etsy selling out? Some handmade purists may fear that is the direction these changes may take the site, which has over 1 million active sellers, but Dickerson asserts that Etsy is staying true to its quirky maker roots. "I don't want to be the CEO who turns Etsy into eBay. Etsy is fundamentally a creative community, and eBay is not."
