Etsy is updating its product categories to better highlight human involvement. This change introduces four new classifications: “made by,” “designed by,” “handpicked by,” and “sourced by.” These labels will be visible on product listings, helping buyers understand how items were created and the seller’s role.
Etsy CEO Josh Silverman announced the policy update, emphasizing that this move aims to reinforce Etsy’s identity as a marketplace for unique, handmade products. The platform has faced challenges from mass-produced goods appearing on the site, and the new categories are designed to address these issues and provide more transparency to shoppers.
Key Points of the New Policy
- Made by: Items created by the seller, either by hand or using automated tools such as a 3D printer or Cricut machine.
- Designed by: Products conceptualized by the seller, such as digital illustrations.
- Handpicked by: Vintage items selected by the seller, which will also carry a “vintage” label.
- Sourced by: Craft and party supplies like beads or clay sourced by the seller.
Silverman explained that despite the new categories, prohibited practices like reselling items made by others remain banned. The goal is to ensure that all items on Etsy maintain a human touch, distinguishing them from mass-produced goods found on other platforms.
Background and Challenges
Etsy has differentiated itself from competitors like Amazon and Temu by focusing on unique, artisan-made products. However, the platform has gradually loosened its restrictions on what qualifies as “handmade.” For example, in 2013, Etsy allowed sellers to use outside production assistance. This policy enabled sellers of cloth masks during the COVID-19 pandemic to contract garment factories for sewing and allowed graphic designers to use print-on-demand services for T-shirts.
While these changes have attracted a broader range of creatives to Etsy, they have also led to frustrations among shop owners. Many believe the relaxed rules have enabled scammers and drop shippers to flood the platform with cheap, mass-produced items misrepresented as handmade. This issue was a significant point of contention during the 2022 Etsy seller strike, where makers criticized the company for insufficiently enforcing its handmade policy.
Competition and Market Dynamics
Etsy’s new classifications come as the company faces pressure from intense competition from Amazon, Temu, and Shein, which offer cheap, fast-delivered goods. Silverman noted that while these competitors race to offer the lowest prices and quickest shipping, Etsy aims to compete by focusing on its unique, human-centered products.
Etsy’s gross merchandise sales fell by 3.7% to $3 billion in the latest quarter, and its stock has declined significantly since its peak in late 2021. To navigate these challenges, Etsy has laid off 11% of its workforce and is under pressure from activist investor Elliott Management, which holds a significant stake in the company.
Commitment to Artisans
The new policy also addresses the use of production partners and AI-generated content. While sellers can use production partners, the items must still involve significant human input. AI-generated content, like digital art, must be created with substantial human involvement to qualify under the new categories.
Silverman emphasized that the new rules are about maintaining the integrity of Etsy’s marketplace and ensuring that buyers can trust they are purchasing genuinely unique, handcrafted items.
By clarifying what products belong on the platform and emphasizing the human touch in its offerings, Etsy aims to attract buyers looking for authentic, handmade items and support the artisans who create them.
Featured Image courtesy of Bloomberg via Getty Images