Friday, May 8, 2015

Is Etsy Dead? An Insider’s View of the “Handmade” Company’s Future


Original Art "Dead Bird Series" by Katarina Thorsen, who used to sell on Etsy.
As a designer I need to be acutely aware of trends, and as a trend, the handmade movement, and Etsy in particular, is dying.
When Etsy launched in 2005, it was on the crest of an emerging national handmade movement. A new kind of craft fair, frequented by tattooed hipsters sporting “buy local” canvas totes, sprang up across the country, causing one writer in 2005 to cheekily lament “It's that time of year when the Look mailbox fills to bursting with perky pink postcards, each one advertising a holiday bazaar displaying the goods of local artists and designers.”
By Christmas 2007, supporting DIY and independent designers took on a patriotic urgency as the United States fell officially into the worst financial crisis since the Great Depression. For thousands of gen-Xers, many of whom were laid off and/or starting families, Etsy promised an ideal lifestyle: make sweet jewelry from home in your spare time. Etsy’s Quit Your Day Job series encouraged this dream, even highlighting “typical workdays” that often involved biking to the post office and working around children’s naps and dog’s walks.
I first started on etsy in January 2007 as seller number 43,719. There were just five shops selling in my category (printables), which made it fairly easy to dominate an emerging market. By 2009 I was making more money in less time than in my “day job” and piddix became one of the top 10 handmade shops out of the now-million-plus active Etsy members.
In many ways my success mirrored Etsy’s phenomenal growth. By 2010, I was being approached for licensing gigs, and I soon had my artwork in stores like Target, Trader Joes, and hundreds of independent museums and boutiques. In comparing notes with other etsy top sellers, this year-over-year growth was common, and published etsy statistics trumpeted an ever-increasing amount of good sold, page views, and Etsy members.
The beginning of the end for Etsy came in 2012. Etsy was “busted” by the Wall Street Journal for the proliferation of factory-made goods, and then the situation was exacerbated just a few weeks later when Etsy accidentally named reseller Ecologica Malibu a Featured Seller. Etsy finally went all-in and announced in October 2013 that they would officially allow factory-made goods and drop shipping, as long as they were “designed” by an Etsy seller.
By this time many top sellers had already begun setting up their own, independent shops (I shifted my focus away from Etsy, "graduating" in July 2012). Lifestyle blogging--which came of age hand-in-hand with the handmade movement--was proclaimed dead at the end of 2013, with Grace Bonney of Design Sponge largely concurring in 2014 that independent writers sponsored via advertising were largely being replaced by paid sponsored content from larger companies.
The decline of Etsy as a home to small, US-based independent designers was also due to the maker’s own successes in licensing and wholesale: you can now go to the mall and get the same indie-design products that five years ago you could only find at craft fairs and online.
With Etsy’s stock recently going public many are questioning whether Etsy's success will rise or fall in the future.
My prediction is that Etsy will continue in the same direction as it is now for several years: an ever-increasing global market of disparate goods no longer tied together by a handmade or vintage thread. 
For a while, it will still be possible, though more difficult than before, to make a handmade living. Sellers who want to do so can go several ways. For example, they can become a stylized importer of well-photographed lifestyle goods, like Three Bird Nest (etsy’s current darling). Or they can offer something that is truly unique or hard to replicate elsewhere, such as customized gifts, niche products, and limited offerings.
Is etsy dead? No. But it is dying. Etsy as a company has never made a profit, and absolutely nothing that they are doing now, nor any of my personal experiences with the company and its staff, give me any confidence that they will ever do so. The eventual end-game of the company may be to merge or be bought by an online marketplace with no handmade preference, such as ebay, amazon, or shopify. But Etsy’s heyday as a marketplace to make a handmade living has passed.

17 comments:

Jansie said...

I completely agree. For what it's worth.

Beth P said...

I too agree with this very sad but true event. I personally am going to start doing small local craft shows in its stead. Sigh... change is always eminent and it is not always for the better. The only thing I can see in this ever growing competitive global marketplace is to sell local.

Manuela said...

I totaly agree too, I am keeping selling a small amount of beads there to get in touch with customers ... but it became more and more harder to make a living from Etsy. So sad, it was such a great place several years ago.

Dorothy Domingo said...

I don't know that Etsy is dead, but they definitely lost a lot of their reputation for handmade integrity when they allowed outside manufacturers. Beyond the problematic re-definition of handmade, they allowed IP infringing listings a stronger foot-hold on the site with this move.

I will stay and try to sell my handmade pottery as best I can. I never really bought into the Quit-your-day-job con that they promoted by selective use of featured sellers, so I'm not disillusioned by the changing market. They have been pushing the ethos of scaling-up and wholesaling in recent years which my work doesn't lend itself to, so I hope there is still a place for small-inventory artists like myself in the future.

I just want to make and sell my work, and hope that Etsy can provide a fair platform for sellers like me. I fear that instead they may continue to pretend that a lot of us sellers are not being crowded out by shops that only fit the Etsy aesthetic or those that can circumvent the rules with impunity. It certainly doesn't help that they changed the categories, and "disappeared" many of them, including my own, Ceramics and Pottery. That one move disappoints me deeply, but I have to wait and see if it's the final death knell of my prospects on the site. I'm still taking a wait-and-see approach.

Teena Stewart said...

I am just now facing this reality after quitting my day job in January to pursue handmade full time. I have been able to support myself on Etsy during the Christmas season but have had no luck with sales the rest of the time despite keyword research and tons of social media promo. It's discouraging.

Deb Weir said...

I think Etsy as a handmade market is dying. My views and sales have dropped over 70% from the same time last year. The forums there are filled with frustrated sellers who can't compete with the manufacturers and shops that infringe on copyrights/trademarks to make sales. Buyers are also frustrated that they can't find the handmade items they want through their searches. As supplies still seem to be selling well, I am tempted to "destash" so many of my findings because I am not selling much in the way of handmade lately.

Anonymous said...

Spot on !!
I love the 3 dead birds! Cracking me up :)
But sadly, I do see the site dying

Toni ChicMouse said...

Sad! Sad! Sad! I recently went looking for a tie die summer dress on Etsy and all I could find were shops from Bangkok, Thailand selling junk. That is not handmade! And what does "designed" by the seller actually mean?

Prairie Primitives Folk Art said...

I've had my Etsy shop for 8.5 years. 2013 and 2014 were almost identical in gross revenue in my Etsy shop, but this year seems slower. I've made 20% more sales than in 2014 YTD, but my revenue is about 10% less; views & faves are down slightly, but not alarmingly.

I had my own site for more than 10 years and, with the exception of making a connection with one particular wholesale customer (who reordered numerous times), it really wasn't worth the time it took. Remember folks, with your own site, you're responsible for ALL of your own traffic!

I have been contemplating opening an eBay store. I've sold on eBay off and on since 1998 and currently have had things listed on eBay consistently for more than 2 months, yet have only sold $40 there. My items get few views, despite having good titles. Something just isn't right about that ... so I'm wondering if eBay is giving preference to stores in search results?

piddix said...

Thanks so much everyone for all your comments. I definitely think there's a place to keep making a living via etsy. Though it's getting harder with more and more (often cheap, manufactured) competition. For most of my full-time etsy friends, their best year was 2012, and since then they've been forced (for better or worse, probably better) to diversify their income through their own websites via places like shopify. Beth, I think craft shows is a great idea. I've been talking with some founders of the local craft shows and it seems like there's still a good market for them, especially at Christmas, which is good to hear. And Dorothy, I'd like to think that things like Ceramics and Pottery would hopefully be harder to replicate (and ship from overseas), so that would be great if it could remain immune from as much copying and competition. Though a simple change from etsy (like the category change) can mess things up even more.

Teena, don't give up! Certain items are definitely seasonal, so will hopefully pick up again in the Fall.

I'm working on a post for next time about ways to still earn a living on etsy, kind of expanding on the idea of "customized gifts, niche products, and limited offerings." I still have etsy friends thriving, especially with customized goods, so there's a way!

Anonymous said...

I'm a sporadic user of etsy. I don't follow it closely. I really enjoyed your post, and I feel I learned a lot. Do you suppose there will arise a "handmade" competitor site? Do you think etsy's failure (to date and, as you predict, in the future) is because a handmade site is inherently not a viable business, or because of something etsy-specific that another handmade site might avoid?

piddix said...

I thought about the rise of a new type of marketplace, too, and yes, I think something will come up, but not the same as etsy used to be. My guess at the moment is that shopify will take over for a lot of the full-time sellers as they move people to their own sites. I'm hoping something handmade-specific (maybe focused on weddings or a smaller niche?) will pop up that is curated and gets good traffic. At the moment, though, anything that tries to compete will etsy just doesn't quite cut it traffic-wise. It comes down to sales, and so far any of the newer handmade sites just don't bring in the sales and traffic that etsy can if done right.

David said...

I used to sell my copper art on eBay for up to $3,000 per piece. I also sold miniature oil paintings (5" x 7") for up to $850. I couldn't keep up with the demand--low bidders who wanted "second chance offers," and new bidders who came along in nearly every auction. In a 7-day auction I typically got between 400 to 1,200 views and up to 60 watchers. I have been away from eBay for a while but recently listed some items. Now I am lucky if I get 30 views in one week and even 1 watcher. Wtf? How is that possible? I joined etsy in March and have had zero sales. The place seems to be 98% sellers and a small percentage of buyers looking for cheap handmade items. If you sell cute trinkets for under $20 you may make some sales, but for higher-priced, fine handmade items--quality work that takes a lot of time and talent to make--I don't think it's a good venue. Maybe it's the summer slowdown. My feeling is that, the economy is still in horrible shape, and people aren't buying luxury items like art.

Sutphin said...

Regretsy?

I've seen dozens of posts here complaining about etsy and was wondering what everyone was talking about: "Handmade vs factory junk"; "someone ripped off my designs", "search feature doesn't work", "my shop was shut down and no response from etsy for 3 weeks", "I was kicked off for not being able to prove my items were handmade by me," ad infinitum ad nauseum.

So I did a search on etsy's site, the "internet's source for vintage and handmade items."

What an effing farce.

In every search, items that had no relevance whatsoever, came up first.

I found countless items, like plain styrofoam cups, plastic spoons, straws, even a woman selling evangelical tapes, and junk that was clearly bought somewhere like Hobby Lobby or a garage sale, probably for $1.49, and then resold as "handmade" for $27.50.

"Handmade" items? What a cruel joke.

I feel sorry for the dedicated, hardworking artisans trying to eak out a living on regretsy, their work buried under countless listings for factory junk and resold factory junk.

What I found oddly fascinating is the little clique, a Confederacy of Etsy Dunces, that hangs out in the help forums, ready to pounce on anyone who dares to burst their little etsy bubble. Funny thing, when I looked at their shops most of them were selling items that anyone with a room-temperature I.Q. would find laughable if labeled "handmade." Of course they were the ones who would jump all over anyone who dared to ask a simple, polite question about etsy's definition of "handmade." Pathetic.

No wonder etsy's IPO was the worst performing one in 2015: http://fortune.com/2015/06/08/etsy-ipo-worst-2015/


Anonymous said...

Yes, etsy. Because you can't polish a turd.

Charlotte said...

'Etsy'. .. . .an Italian word for junk or trash items that are spruced up with glitter, cheap beads, or decoupaged, and then resold as handmade art.

Anonymous said...

Unfortunately, I agree as well. I think not only Etsy is dying, but handmade as a field of unique crafts.
So many stores copy each other - I surfed from one store of prints to the other and couldn't understand what is unique in each of them. Etsy became an overcrowded mass market place.
Not really all of them, but the most.
Later I visited Etsy as a place where I can find one of a kind things, but now there a lot of Chinese sellers who offer low quality trash.
I hope you understand what I mean...
Elena