It Doesn't Matter What Etsy Does: Some Real Talk About the Conversation We Keep Having

I initially started this post with the headline "Why I am tired of hearing about Etsy." Which was meant to be provocative, but also it's kinda true. Because Etsy is all anyone knows when they aren't in the handmade industry and so I constantly hear about it when I bring up what I do.  

I'm also tired of hearing about Etsy from someone else... and that someone is YOU! Well, maybe not you specifically, but you collectively. And I'm not tired of it in that I never want you to talk about it, but I really think we have gotten stuck in our conversation as a community. And I think part of the problem is within. So get prepared for a long convo that has probably been a few years in the making. :)

Etsy Moved On: Our Conversation Hasn't

It's no secret that many of you are unhappy with Etsy-- some for perfectly valid reasons and others for more emotional or other maybe-not-so-legitimate reasons (hey! I totally understand... breaking up is hard to do and all that). We all know the company has changed its policies, its ways of shops people getting found, its shop pages and its homepage. All of these things have gone over with lukewarm feelings at best and threats to bring pitchforks and torches to DUMBO at worst (okay, I've not actually read such threats, but that sentiment is definitely there sometimes).

And this is where we get stuck. We talk on and on about the changes. About how much we don't like them. About how much we don't care about them as long as we can make money. About the "good old days of Etsy." About how it's no longer a handmade marketplace. And then there is usually some discussion of what else is a competitor to Etsy. And that is where it ends. It just all kind of circles and swirls around these ideas.

The facts remain, and have been underscored even more with its declaration to seek an IPO, that Etsy has been staunchly focused on its bottom line of making money. They are a business and for the most part there is nothing wrong with this. They don't owe anyone the need to stay solely focused on handmade and can change their site and policies whenever they'd like. Just like you can in your business.

And I think most of us get that, but we still are having this conversation and are lingering on things. And I think I know why.

Stop the Madness (and Your Short-Term Thinking)

When Etsy started, it really emphasized the dream of running your handmade business. You too can be a success story! Even now they continue to promote high-earning sellers as models of possibility for sellers coming up in the ranks. But once more people got in on the gold rush of the early days of Etsy, there was a lot less gold per person to go around. The marketplace became crowded.

You need more than an ecommerce platform to make a business. 

You need more than an ecommerce platform to make a business. 

People stayed through that and continue to stay, even with declining sales and when they openly admit to having ethical issues with the company (which we are not making a judgment for or against here, but many of you have expressed ethical problems and yet are still on there). One reason for this is simple, a lot of people still make decent money on Etsy even if it's not like back during the gold rush days. But a lot of new sellers continue to invest a lot of time and effort into their Etsy shop, even though being in a category like jewelry means they will have incredibly stiff competition and experience slow sales.

That's because Etsy's marketing of the handmade business dream (and they aren't the only ones selling it!) has continued the trap in this community of the gambler mentality and the "I'm-not-really-a-real-businessperson-just-kinda-one-because-I'm-a-maker" mentality. These ideas are very embedded with the easy ideas of success that have been associated with handmade business. But these ideas keep makers from being real, actual viable businesses. So let's address the first way of thinking.

Gambler Mentality

There is a small group of people (by far not the majority) that still holds onto the pipe dream of gold rush Etsy days. Of getting found and discovered, picked up by some key blogs and then just going viral. They see someone like Emily McDowell who was literally almost an overnight success (AND she did it in a post-gold rush world!) and think, "Hey, that could be me!"

Emily is incredibly talented, incredibly hardworking... and also very lucky! She even admits that she wasn't prepared for what happened when her cards JUST HAPPENED to get picked up by blogs at Valentine's Day and went viral during a key card-selling season. She lays no claim to a strategic PR campaign or anything else special she did in the beginning. She made a great product, worked hard and also got VERY lucky.

Let's contrast that with one of our members Jeanette of Sweet Perversion. She has also worked very hard, has an amazing product (which is also in that "sassy" category of cards as Emily's) and is quite successful. But that success took years to build. And she's been at this WAY longer than Emily. And, while still being successful, is still not selling the way Emily is. Both are smart, hard-working business ladies with fantastic product. But if most new Etsy sellers are even half as successful as Sweet Perversion they will be lucky.

And this has mostly nothing to do with Etsy... this just has to do with the fact that RUNNING A HANDMADE BUSINESS IS HARD. PERIOD. Running any business is hard and when you are the one mostly making everything, it gets exponentially harder. 

But all that most people (both consumers and sellers) know is the stories of the overnight success. Or even just the successes. The fact that Etsy's own survey revealed that only 18% of their sellers do their business full time, should tell you that there are probably a lot more people doing it part time that wish it was making more money (hey, if you have a job and also want to sell part time, there is no shame in that handmade game too! But realistically there are probably a lot of people on there who wish their handmade business was their full-time one). This doesn't mean failure, it just probably doesn't mean they are the success stories that Etsy will likely tout. It means when you get into this business through the Etsy pipe dream, you've already been set up for some disappointment and wrong thinking.

I'm-not-really-a-real-businessperson-just-kinda-one-because-I'm-a-maker mentality

This mentality is a little tricky to explain and partly due to the fact that craft's legitimacy has often been dismissed as a profession even in the larger art community or just in general (because while fine artists have trouble looking like a legitimate business, crafter has historically carried even more baggage of legitimacy with it). AND because craft is very linked to the DIY movement, which can get you into loads of trouble when an amateur is running all parts of a business. 

This quasi-professional mentality is often exhibited in one of two ways: "Why would I pay to have someone else do that when I can just do it myself or find a free/cheap equivalent" or "Hey! I saw something like that on Pinterest (or insert other wesbite here). I can totally do that myself." The irony in all of this is that makers hate it when the public takes that attitude with their items, but often freely do it when it comes to their own business.

The last example is largely the result of enthusiasm and curiosity, which is not in itself bad. It's probably what got you into a handmade business, even though there was probably a lot you didn't know about running a business (confession: this was totally me). 

The other example of not spending money is the one that is really infectious to professionalism and, I believe, is what is really holding us back. It's the big reason why Etsy has lured you in and why you can't really say goodbye (or at least say "you're not going to be a priority.") It's why a lot of you have yet to go into wholesale and why other sites don't seem to be able to compete with Etsy. And it's what is fueling the addiction to cheap listings. 

New Technology. Same Business Model.

The ease with which Etsy made starting business seemed revolutionary at the time. This ease is still a huge selling point on their site today and similar sites. But if you really think about it, was opening an Etsy shop really starting a business? NO! It wasn't (and it still isn't).

Before Etsy, having a handmade business meant a long slog of craft shows, hard work building your customer base, and lots of effort developing relationships with buyers or hiring sales reps to land wholesale accounts. All of this not only took a lot of time and effort, it also took money. Which is probably why "everyone" wasn't doing it.

You couldn't just invest sweat equity. You had to give shops 50% of the retail price of your goods. Or you were paying money to a craft show for a booth where you had no idea if you'd make money or not. Or you were paying a designer to design your website and figure out your ecommerce. However you sold your product, you were likely having to figure out all the ways you were spending money on selling in order to be able to calculate a price for your products that also included profit for yourself. 

When Etsy came along the deal was just too good to be true. You could make up just about any price you wanted and feel like you were making money because virtually all of the money was going back into your pocket. You didn't have to even pay to make a pretty website or deal with an ecommerce plugin on your website-- it was all just there! And because of the early days of Etsy's homepage, you could just keep paying to relist your product (only 20 cents!) and possibly get on the homepage which would mean lots of sales that day.

But think about. This was not a business and it wasn't preparing you to be a business. In exchange for cheap listings, you don't get the emails of your customers or any real interactions with them, so you can't build much of a relationship long term. You can't get much in the way of analytics and other metrics, so you can't really strategize and develop a product that's based on a full picture of data. Plus, you only pay 20 cents to sell, which makes wholesale seem like the dumbest thing ever (who would pay someone 50% of their sale when they just pay 20 cents to list and a credit card fee on Etsy!). But oh man, those cheap listings... totally worth it as a trade for not getting data or customer contact info, right? Or having a shop branded the way you'd like to create customer experience unique to you (because you'd also probably have to pay a graphic design and web hosting fees and that isn't as fun as cheap listings!)?

The reason so many come to Etsy and have stayed is there is no reason to leave mostly. Even with declining sales, throwing up items for only 20 cents seems harmless, especially since you are selling some of that stuff. And some of you are still doing really well on there (so by all means stay if you want!). But if all your eggs are in the Etsy basket or even just a good portion, how is that going to impact the long-term health of your business?

In the short term it means you don't have to spend a lot of money or do much to get sales. Hey, that's nice! But there are a lot of things I did in "start-up" mode in my businesses that I have since jettisoned because they were bootstrap tactics to get me through the beginning. They were never going to amount to long-term success.

But 20 cent listings have caused many to fear the "high cost" of wholesale or even the idea that you'd have to raise your prices because when you are on Etsy you see stuff that is similar and significantly less (hint: it's cheaper because that person isn't really running a business or it was made in China). And I think the addiction to cheap listings feeds the mentality that you don't really need to spend that much money to make money.

You're a Business, so Start Acting Like One.

I realize that sentence was rough. This blog post is obviously an extra-long dose of tough love. And really it is love. The love of handmade and the love of creative entrepreneurs who make kick-ass businesses. 

If you really want to get serious about your business, you really need to start evaluating your business decisions with far less fear and emotion. You can't be afraid of spending money (you can certainly be cautious and research, but fear needs to go). You can't be afraid of raising prices because someone else who is a hobbyist is selling their stuff for below cost (that's because you've developed relationships with customers so you expect them to return to you!). You can't be afraid to do the work of running your own business (because giving your analytics and email lists over for just 20 cents a listing is not worth it!) and putting the hard work in areas that aren't just making product.

Just about very single successful maker I know spends money on their business, prices their work competitively so they make a living wage and doesn't just rely on one place for success (multiple streams of income is a thing!). And while many of them sell on Etsy, they have figured out that if they are serious about their business that they have to look at Etsy like a tool in a toolbox, not as the linchpin to their success. And sometimes the Etsy tool means you are on there to get discovered by retailers looking for wholesalers or by magazines doing roundups of the "Best of Etsy" and you're not on there for big sales.

Let's go back to that Emily McDowell example. Even though she went gangbusters her first go round on Etsy, her business has grown (both as line of products and in sales) because not only has she been selling on Etsy, she also has a mean wholesale game (with employees, reps and spends money on trade shows) that has also propelled her Etsy business (funny how those things work). If her Etsy shop were to close tomorrow for whatever reason, it would certainly be a bummer, but her business wouldn't fold because of it. 

So what's the point of this rant?

The point is, the "Etsy economy" has probably made you and many other makers bad at certain elements of business and given you a really conflicting relationship with that brand. Your business ideas have likely been molded through visions of getting lucky or that you don't have to spend a lot or do much to run a business and experience success. And in the beginning of Etsy it was done in a very close community through a highly personal company that got you all hopped up on feelings of being cared for/about.

And in many ways this is not unique to makers. We are inundated with ideas that if you follow this guru's five easy paths to success you'll be making six figures or get stories thrown at us that show what seems to be overnight success (I mean, Silicon Valley is just filled with those, right?). We're also told that "anyone" can go into business and be successful because we are all such special snowflakes. 

But, at the end of the day, business is hard. Being good at business is harder. And staying good at it is hardest of all.

Where does that leave us? It means we move on when we need to, stretch ourselves in order to grow and stay put when we need to because it is the best move for us even if it isn't for everyone else. You know your business and it's your job to know it like nothing else. To understand what makes it tick has to consume you a bit. To trust yourself to steer it away from the storms and toward the destination you want is scary, but necessary. 

Most of all this means the landscape of what we will do will change, so we can't ever put a lot of our stock into things we have no control over (like other people's websites). And I hope it also means I never have to hear another complaint about Etsy again (JK... not JK?).

I am guessing you are going to have some thoughts about this. Can you tell me them in the comments below or on our Instagram? I really want to know!

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