Last week, Etsy filed for a $100 million initial public offering, leaving buyers and sellers alike wondering what it all means.
If you’re not familiar with Etsy, it’s a marketplace founded in Brooklyn in 2005 for people around the world to shop for unique items online. Over the past decade, Etsy has strayed from its humble beginnings of selling only handmade items…sellers on Etsy now offer everything from homemade jewelry, unique paper items, vintage treasures (like me!), craft supplies, and more.
I have no problem with any of those, as I am a seller of vintage, not handmade, items. I even think some large businesses can thank Etsy for growing their small mom-and-pop online shops into worldwide companies. There are over 1.4 million sellers and over 19 million buyers on Etsy today. I would love to sell my items through my own blog and not have to use a “middle man,” but the truth is that my little corner of the internet can’t even remotely compete with that much exposure.
But Etsy could be changing drastically soon, and not for the better. As a seller, I see some big problems on the horizon. With the new IPO, it’s almost a certainty that seller fees will increase.
Anyone remember Hunter’s Alley? I sold on there for a while, and they charged sellers a whopping 25%, compared to Etsy’s 3.5%. In addition, Hunter’s Alley only allowed shipping via FedEx, and when FedEx blatantly crushed my one-of-a-kind items, Hunter’s Alley sided with FedEx and did not support their seller. After that happened twice, I was done with Hunter’s Alley. A month later, Hunter’s Alley folded, less than 6 months after opening.
I do think Etsy missed the mark in 2013 when it began to allow outsourcing of manufacturing and labor. In my humble opinion, if you’re big enough to need to outsource your manufacturing, then you’re big enough to sell on your own business website. But hey, what do I know?
I always try to support small businesses, but I’m not really anti-big-business. That’s like hating your favorite local band for becoming successful and selling albums. I mean, even Starbucks started out as a small, local coffee shop. Where success lies, change is inevitable.
But I’m disappointed to learn that most of Etsy’s revenue comes from paid services, like payment processing, ads, shipping labels, and direct checkouts, rather than revenue from sales and listing fees. By allowing mass retailers to open up shop and advertise, Etsy is tainting its own reputation. I guess too much of a good thing is a bad thing in this case.
I will continue to sell on Etsy for the time being, but I’ll definitely be keeping my eye on this IPO to see what changes are made going forward. If you’re looking for alternatives to Etsy, there are options. I haven’t tried them yet, but am definitely considering making a switch. Here are just a few…
I realize this can be a polarizing topic, and if you don’t agree with me, that’s ok! I’d love to hear your thoughts on Etsy’s IPO. Share them in the comments below!
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I really enjoyed this blog post. I think Etsy’s (or as my wife…and mother say, Esty) chief investors and white collars are trying to cash out on a big IPO before the window closes and their market cap diminishes. They posted a sizable loss last year and I’m not sure that their model is sustainable. They are probably going to see some attrition from established sellers whose customers will follow them to truly boutique sites with more favorable fee structures and less corporate competition. Capitalism just keeps banging on down the road.
While the changes made by Etsy may not be liked by most people (which time will tell sooner rather than later), the beauty of Capitalism lies at its very heart: the power of the marketplace and competition. People vote with their dollars. If Etsy blows it, people will stop spending their money there, but as Sarah aptly points out, there is a laundry list of others coming up right behind it, happy to take their slot and working their tails off to do so. Capitalism as an economic system was actually established principally by Protestants (I forget which religion at the moment) and was stressed to grow wealth in order to benefit one’s self, family and community by way of voluntarily charitably giving. The term “greedy capitalist” is a relatively recent label in capitalism’s economic system and places an inaccurate and unfair stigma on anyone attempting to be successful. The beauty of capitalism, after all, is choice.
I bought from Etsy once and was very happy with what I bought. When I tried to buy again, my password was screwed up and I never took the time to straighten it out and buy anything else. I never heard of the other sites but I will check it out. I also read Miss Mustard Seed’s blog and she has a site to sell things also. Don’t know how it works but it might be worth your while to look into it.
That stinks that you had a bad experience. I am so obsessed with etsy as of recently, I’m buying too much!
Sarah thanks for sharing! As a frequent Etsy shopper (I bought two things there this week alone), I mean FREQUENT I don’t want to see those fees increased and sent back to the consumer. What I love about Etsy is the ability to find beautiful unique things I can’t go get at Target or even some local retailers-all at a great price point.
I love etsy and I would hate to see it change. I purchase a bulk of handmade as well as vintage pieces.
I’ve sold on my own site for years and only ever bought through Etsy. I agree that using Etsy gives you more exposure (as a seller), but unless you have something incredible, you aren’t going to stand out among the dozens selling similar items. A lot of my friends sell on Etsy and seem to be jumping ship pretty quickly lately. You might look into Square too. I use it for sales at craft shows and it is very inexpensive.
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Thanks so much for this post. I received a notice from Etsy about the new changes. But you have given me much more to think about. I was ready to open my store but never put any items on. I was a bit nervous and thought that no one would buy my stuff. (I know many others may have felt this way) Thanks so much for the other options you outlined. It gives me much to think about and it’s nice to know I have options.
Oh my…great post! I always get so excited to see what you have brought to the party! Pinned and tweeted. Thank you for being part of our party. I hope to see you on tonight at 7. Lou Lou Girls
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I just stumbled on this! I wrote about much of the same “problems” I find with Etsy (and the perception of Etsy as well) on my website! http://www.inkmeetspaperdesign.com/home/is-etsy-to-expensive-or-are-we-too-dumb-to-understand