Initiatives like these are certainly good for business, but some Etsy sellers worry that allowing outside manufacturing has also opened up the floodgates for shops to sell more items at increasingly lower prices, ultimately shutting a lot of the smaller sellers who have to charge. After the initial announcement, Etsys seller forums filled with people upset over the companys new direction. Manufacturing is manufacturing, a single artist is a single artist, thats just how I look at it, says Tammy Allman, a painter who has been selling on Etsy since 2012. And I think thats how a lot of sellers look.". Some, like allman, threatened to leave altogether and move over to a smaller handmade site like zibbet, which saw its users, revenue and number of items sold on the site double after the policy changes. (Allman still sells reprints of her watercolors on Etsy). Etsy says its seen no notable fluctuations in its sellers or items sold since the announcement, but Allmans qualms bring up a good question: What is handmade anyway? In the days following the policy changes, dickerson was"d describing some items as handmade in spirit, referring to computer-assisted design and 3-D printed goods.
As an entrepreneur, you want to grow and create a brand, she continues. But not so successful that now you cant be on Etsy anymore. So it was like, yes, i want to grow, but not too much. This was a recurring theme, says Dickerson, and a big part of why Etsy decided to revamp its policies. By expanding its guidelines, Etsy has allowed a seller like ferguson to grow into a thriving small business—one wallpaper that the company hopes will stick around for the foreseeable future. What were really betting on are the sellers who helped Etsy grow over the years, says Dickerson. We want them to be able to continue to grow but in a way thats in line with Etsys values and the world we want to create. 'the way the rules were set up before limited growth.'. Parallel to the new policy, are initiatives like etsy Wholesale (currently in beta which connects sellers to local boutiques and big name retailers like west Elm and Nordstrom and its Craft Entrepreneurship program, which teaches underserved communities the value of making.
Alexandra ferguson is one of those sellers. Back in 2009 Ferguson was working in fashion and making felt applique pillows on the side. She started her Etsy shop with no real money—maybe.60 in listing fees was my startup capital, she laughs. But by the end of the year, ferguson was so busy making pillows with sayings like "WTF" and "Kiss the cook she decided to quit her day job and work on her personal brand full-time. This past July she moved into a 4,000 square-foot space in Industry city, a warehouse neighborhood in Brooklyns Sunset Park thats become a hub for small-scale makers who need to expand from their living room workshop arrangement. Image courtesy Alexandra ferguson, these are the kind of sellers Etsy would love to see more of on the site, and the hope is that the new policies will encourage this sort of organic growth, not dampen. Ferguson says right around the time of moving to Industry city, she was toying with the idea of leaving Etsy altogether. We were flirting with graduation from Etsy, she says. The way the rules were set up before limited growth.
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Instead, they're relying on sellers to make a judgment call on the type of manufactures theyll employ, with hope that the Etsy ideology will prevail. Thats a big gamble for a company looking to build a better retail swift economy from the ground up, but Dickerson says so far more than 80 percent of sellers who have applied for outside manufacturing have opted to go with manufacturers in their own country. When you build any sort of internet service in scale there will always been bad actors, people who dont tell the truth or manipulate things, he says. But we trust our sellers to make the right decision. Growing pains, in 2013, Etsy raked.35 billion in gross merchandise sales; this is after a 895 million year in 2012. The company makes its money through commissions, pocketing.5 percent of each item sold (the rest goes directly to the seller charging a fee of 20 cents per listing, and rainy a host of other revenue generators. Since 2005, the company has ballooned to more than 500 employees, one million sellers and 20 million items for sale and counting.
All this to say etsy is growing, and fast. We dont grow, and were not successful unless the seller community is successful, dickerson explains. So basically our success as a company is completely tied to the success of our sellers. Problem was, some sellers were becoming too successful. As shops matured on the site, they began to outgrow the made-in-the-living room ethos that made the sellers sign up with Etsy in the first place.
Making Changes, etsy's updated guidelines state that all Etsy users are eligible to use outside help, whether that be a clothing designer who outsources her sewing to a garment factory or a visual artist using zazzle to print his work. The only stricture is that creative authorship has to rest with the seller. If you could outsource your making process to factories, what makes Etsy any different? This isnt a totally new idea; Since 2008, Etsy has allowed partial-production, a hazily defined phrase that allowed sellers to self-identify as designers rather than makers." This meant sellers who wanted to make cnc-milled accessories didnt necessarily have to own (or operate) a cnc machine;. Back in the earlier days of Etsy, this policy wasnt uniformly enforced, and it was only loosely understood by sellers. The members misunderstandings were only intensified by Etsys own confusion about what it considered to be handmade.
Before the policy change, etsys rules and guidelines outlining what counted as handmade were 14,000 words long; today theyre just over 900 words. Etsys new policies are essentially a validation of its earlier partial-production rule. Boiled down, any sellers who want to hire a partner are required to fill out an application, outlining their personal role in the creation of a product and how they will be using outside manufacturing. Then Etsy's Marketplace Integrity, trust safety team determines who is and isnt granted the right to use outside help. So far, more than 1,000 shops have applied for permission, with a third being granted, a third rejected and the other third still under consideration. The main reasons we've turned down applications are that the applicant has not adequately demonstrated their role in the design and creation of their items, or they have not been able to (or willing to) take responsibility for how their items have been made, explains. Cohen says the Integrity teams job extends beyond blindly stamping approval; more often than not, the team will dig deeper into requests in order to get a better understanding of a sellers role in the design and her relationship with prospective manufacturing partners. But the company says its not responsible for vetting the actual manufacturers.
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Events like the foxconn debacle and Bangladeshi garment factory fire have soured the public on manufacturing, and with good reason. But when Dickerson talks about manufacturing, he likes to steer the conversation towards Etsy users who have bootstrapped their own mini-factories, or craft-friendly communities like. Manufacture ny, a 40,000 square-foot facility in Brooklyn that gives local designers space to manufacture their products. As Dickerson says, the Etsy ethos may end with a transaction, but it actually begins with the design and manufacturing of restaurant a product. We homework think Etsy can help change the face of manufacturing and make it more local and sustainable, dickerson says. We want to change how things are made and produced in the world in a more human-centered way. Dickerson admits that this all sounds like utopianism. But the meat of it lies in updated guidelines about what counts as an Etsy sell-able product. By widening that definition, the company hopes to reach a far larger swath of sellers and consumers.
Etsy ceo chad Dickerson. Photo: Etsy, for Dickersons part, he hoped the new guidelines would clear up some longstanding confusion around what users could and writing couldnt. We heard about a lot of sellers who were afraid to hire help or afraid to use any outside assistance because the policies werent clear, he said. We wanted to open that up to give sellers more freedom in their lives, not less. At its core though, the policy change is about more than simply clarifying the definition of handmade. By entering the world of manufacturing, Etsy has positioned itself to grow far beyond the modest cut and sew roots of its sellers. Etsy hopes that by doing so, they can impact the way we make and sell things. Redefining Manufacturing, i think that our collective view of manufacturing is outdated, dickerson tells me one afternoon, sitting in his office at Etsys Brooklyn headquarters.
the companys ceo explained why they had gathered for an official town hall meeting: Today were announcing you can hire whatever number of people you need, dickerson told the group. With this announcement Dickerson was essentially telling Etsy sellers they could now hire outside staff and manufacturers to help produce their goods on a much larger scale. The audience remained quiet while dickerson outlined some of the changes Etsys new policy would bring about, but for some Etsy sellers watching the town hall meeting online, this announcement signaled a fundamental change in the companys dna. When Etsy was started in 2005, the company unbendingly positioned itself as a disciple of crafting and making. If handmade were a religion, Etsy would be a texas mega-church. So to some, dickersons announcement was sacrilege: If you could outsource your making process to factories, what makes Etsy any different than ebay or Walmart? For others though, this updated policy was a sigh of relief after years of feeling overwhelmed and uncertain of how they would keep up with the growing demand for their goods without outside help.
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