Etsy moves away from ‘race to the bottom’ and returns to artisan roots | Wilnesh News

when etsi Launched nearly two decades ago, the site attracted artisans and craft makers who finally found a place online where they could sell their niche products and reach a large audience. But in recent years, Etsy has found itself swamped by generic goods churned out by resellers who have learned how to game the site and crowd out handmade products.

Now, Etsy CEO Josh Silverman wants the company, whose established mission It’s about “keeping business human” and returning to its roots.

Silverman told CNBC that the company will make major changes to its site management policies on Tuesday to make it “clear at a glance” to shoppers which products belong to Etsy. The changes include new tabs on its website and app to show how each seller builds specific items.

“We are positioned to respond to the demand for original merchandise and real people by launching products for Etsy,” Silverman said.

Etsy is launching a new marketing campaign around the policy change, including a TV ad showing potters, clothing makers and other artists, followed by a smashed robotic arm. The platform’s new rules require all projects to incorporate a “human touch” as outlined in its creative standards. Each product must fall into one of four categories: Made by the seller (by hand or using automated tools), Designed by the seller, Carefully selected by the seller, or Purchased by the seller.

Through these changes, Etsy hopes to bring buyers and sellers back to its site in an era increasingly dominated by e-commerce. Amazon There are also upstarts such as China-linked Temu and Shein, which offer shoppers cheap goods delivered to their door within days. The stakes are high because eMarketer estimates The global e-commerce market is expected to exceed US$6 trillion this year.

“I feel like there’s a race to the bottom going on right now in commoditized commerce, and pretty much everyone in e-commerce is participating in that race,” Silverman said. “They’re selling the exact same product, and they’re trying to Sold to you for 2 cents cheaper, or shipped two hours faster.”

Etsy has struggled to respond to changing market dynamics. In its most recent quarter, total merchandise sales (i.e., the dollar value of goods sold on the market) fell 3.7% from the previous year to $3 billion. Since its peak in late 2021, the stock has lost more than 80% of its value.

In December, Etsy laid off 11% of its employees, with Silverman citing a “very challenging macro and competitive environment” as the reason for the layoffs.

The company is also facing pressure from activist Elliott Management, which has taken a roughly 13% stake in the company, making it Etsy’s largest investor. February, Elliott Partner Marc Steinberg join in Etsy’s Board of Directors.

The roller coaster starts early. Etsy went public in 2015, forcing the company to start meeting shareholders’ demands for growth, a stark contrast to its feel-good, socially conscious culture.

Etsy’s business has exploded during the pandemic, spurred by an influx of mask buyers. The company’s stock price quadrupled in 2020, and the number of businesses selling goods on the site more than doubled between 2020 and 2023, to 9 million.

So far, Etsy has used its “Family Rules” to regulate this website. The key policy is “All items sold on Etsy must be handmade, vintage, or craft.” No resellers allowed.

The new rules are more specific and updated to reflect today’s realities. For example, a 3D printed sculpture is considered “Made by Seller.” Sellers are prohibited from adding a single sticker to commercially available masks and pretending to be handmade. Regarding AI-generated content, the policy states that “artificial intelligence art prompted by sellers,” such as a dog wearing a crown, qualifies as “designed by the seller,” but digital downloads of “more than 5,000 ChatGPT prompts” do not qualify as “designed by the seller.” “Seller Design” qualification. allow.

Smith started selling custom wedding handkerchiefs through her business on Etsy. polka dot beeIn 2011, Smith said that Etsy, a place to “endlessly search for the amazing things people make,” has morphed into a site increasingly focused on generic items.

One of Etsy’s biggest changes came in 2013, when the company allowed sellers to use production partners. Sellers can seek product assistance from contract manufacturers instead of manufacturing the products themselves.

Abby Glasenberg applauded the move. Glasenberg, who drives Her handmade stuffed animal shop In 2005, she said on Etsy that this meant she only had to create the pattern once and could sell “unlimited copies,” thus reducing her workload. She said her Etsy shop went from a hobby business to a full-time career.

Glassenberg understands the tension, however, because many Etsy consumers still want a handmade experience.

“Handmade cannot be scaled,” she said. “That’s why we like it, that’s why humans like it.”

Glasenberg gave the example of a handmade fork that is forged and cut by human hands.

“I would buy it for $120 and use it forever and fall in love with it,” she said. “One person can’t make 100,000 a month, and that’s why we love it.”

Competing on a larger stage is different, though, and Smith said the mainstream preference for cheap and fast goods “makes it an uphill battle for sellers and Etsy.”

Temu and Shein have grown their presence in the United States in recent years, luring American consumers with deep discounts on clothing, jewelry, home furnishings and other products. Silverman previously acknowledged that the sites “are taking a little share from everybody.”

He’s now making it clear to sellers and customers that the company will compete on its own terms.

“The way to solve this problem for Etsy is not to try to play that game,” Silverman said.