I left Etsy as a member of the relatively new ads team in mid 2015. We generated a lot of revenue for the company in a very short period of time, but we made sure to make the whole thing feel like Etsy - homegrown, ethical, thoughtful, etc.

We made the tools mentioned in this article - the ads console and search ads. It was basically first party promoted listings where you could bid on keywords in the internal site search. We also let sellers opt into ad campaigns run through google and facebook that we helped manage through a console. It was all optional, and it was a decent equalizer for smaller shops, although it was mostly used by large shops iirc.

I have no idea what the hell they're thinking with this. This is downright hostile to sellers. I spoke to a nonzero amount of sellers who were against advertising as a concept - they didn't want to be part of that machine (I think quite a few of us here can relate). Now they have no choice but to pay Etsy for this. It's a huge middle finger to the sellers and that made Etsy rich and who Etsy continually takes advantage of. This is mafia-esque style extortion where they say they're doing this for you as they take your money.

Especially given that Etsy is supposed to be primarily for hand-made goods. Their top sellers are very likely already selling items at the speed they can make them, why would someone want Etsy to take a cut of their sales for advertising when they can't actually sell more?

That was the original model but that doesn’t really scale. It’s primarily another channel for mass manufactured stuff that your can find on aliexpress.

I got into it with their support over this. They still claim they don't allow those items but when you report it to them they shrug it off.

I've written them off completely now. All of these aliexpress, etc dropshippers are ruining all of the retail sites.

example of an item that smells like aliexpress to me:

2'x4' painting for $160, ships from china, comes in 6 different sizes

https://www.etsy.com/listing/637298037/original-sea-waves-oi...

I'd put that right in the middle of the 'hotel art' category. They should also advertise it as being stain resistant.

Is there a competitor that still is mostly handmade?

supposed to be but probably isn't https://www.dailydot.com/irl/etsy-reselling/

Well it's a good strategy to nudge mass produced high-volume low-margin goods off your marketplace. And the mom-n-pop ones can always opt out.

The system has no opt-out if you've ever gone above $10K in rolling 12 month sales.

How many sellers are doing more business than that though? I figure Etsy has better numbers on that than we can speculate.

My mom started selling hand-made jewelry locally, and then started an Etsy account. She started doing them for fun, and then realized she can make a little money at it.

A few years later, and I think she just barely qualified for that $10k this last year. So she went from pure hobby to being classed as one of the "biggest sellers" in just a few years.

I don't know how many people get to that point, but what she's doing isn't particularly unique. Literally anyone could do it if they have enough control of their hands and enough free time.

I'm not sure but the point is that it's WELL within the threshold of "mom n pop".

Etsy shops don't strike me as low-margin. Unless it has drastically changed since I last used it? At least back then, it was for "self-made" and/or creative works. Such products are typically under less competitive pressure because there's no competition for "Aunt Jill's Organic Cotton Socks".

I used to deal in high-end organic foodstuffs, and we sold nothing below 50% margin. "Sure, you can by other olive oil for 1/10th of our price. But you can't buy this olive oil"

Margins aside, anyone selling hand-made goods has a very limited stock and can't really scale up production. What is the value of this advertising to a seller who is already selling at the rate they can produce goods?

> who is already selling at the rate they can produce goods?

This is a pretty good question. If you sell handcrafted hard maple tables that go for $5k, it only takes two orders and you're suddenly coerced into a program.

However, if that program leads to one sale more it only cost $500 - that's a pretty good ROI. The problem will be if Etsy is transparent and can demonstrate the incremental value of this service, and that it's just not cannibalizing existing sales.

> if that program leads to one sale more it only cost $500 - that's a pretty good ROI

Not if you don’t have time to make another table...

Then reduce available inventory. No one is forcing you to sell things you don't want. This is a fake argument.

I think it’s an argument you don’t understand. Also, just because you sell tables for $5k doesn’t mean you would want to “buy” another sale for $500.

Just because the margin of sale price over COGS is high doesn’t mean that — after factoring in the cost of labor — it’s a high-margin endeavor.

Edit: typo fixed

> I think it’s an argument you don’t understand

I've sold hundreds of millions of merchandise over the last decade. Think I understand just fine, thanks.

> doesn’t mean you would want to “buy” another sale for $500.

Of course you do, this is why it's called business. No one is on Etsy because they don't want to make money, and most people I know have excess labour and are willing to trade that for money.

> after factoring in the cost of labor

This isn't how cash flow works. You cannot get fixated on the margin of a single order, but on the blended margin across all orders.

The fact that you’ve sold things doesn’t mean you understand my argument. You’re sure good at convincing yourself though — good day!

The value in that case might be the teaching moment when they realise they should have raised prices a long, long time ago.

Spoken like somebody who has no idea how that particular market works.

Let's take handmade jewelry for an example, because I happen to know that somewhat. Unless you want to do luxury goods, you're talking mostly beading & wire wrapping. There's a very clear ceiling on the price by mass-manufactured goods from mostly Mexico.

People still want to buy handmade in the US, because they can talk to the seller, because they can influence the design somewhat, because it has a feelgood factor. That gives you room to charge a small premium. That premium, however, is limited. Demand for jewelry is fairly price sensitive, especially given that there's a fallback good that's almost as nice at a lower price.

And so there is both an upper limit to the price you can charge, and an upper limit to what you can produce. (You could manufacture, but it's fairly easy to tell, and so you lose the "handcrafted" clientele)

Yes, in a rational market, you'd fold up and move to higher margins. We know for a while now that markets aren't rational. And the craft market especially is deeply suffused with all kinds of emotions. So, no, that's not going to happen either, because people like making stuff with their hands, and this particular market allows them to finance that.

Maybe save the glib advice next time and ask some questions first?

None of this is true if you have the skills to chase whatever trend is ruling the market.

For eg custom keycaps - what should they cost? i've seen anything from 60USD for brass moulded ones to 200USD for resin ones with miniature landscapes in them(that sell out literally within 1 minute of listing)

Individual maker-types are all over the map, in every way. Making blanket MBAish statements about what's good for them is (a) a fool's errand[1], and (b) rather arrogant in assuming you even know what's good for them.

And even if price optimization is what's good for what ails everyone and we just didn't know we all need to pay 12% more, the result of this lesson underwrites Etsy while complicating everyone else's life. Um, thanks?

[1] Just one of many points one can make here - a large number of crafty folks are very much not profit-maximizers. I know this is true for me (I don't sell on Etsy) - running my hobby like a business would be stupid, because not only will my day job will always pay better, but more importantly, chasing fashions, accounting and caring about competition would suck all the fun out of it.

Says who? It's possible that the sellers have goals other than profit maximization. Maybe they're happier simply providing as much supply as they are able at a price that feels fair.

The market?

Every other marketplace charges 10-15% - Etsy has been a bargain for years. Even eBay will cost a seller more than Etsy, and no one's complaining about that.

To what end? They're still at capacity, Etsy take a bigger cut, and they might not be particularly interested in making more money. Some sellers (I suspect especially on a marketplace like Etsy) might be happier making a product _everyone_ can afford to buy.

If you make 10% on each Etsy sale, you need to find a new business. 10% works for large volume retailers or very expensive products, neither of which are really Etsy's forte. Even people selling print-on-demand tshirts have much higher margins than that.

TL;DR: The 10%-margin shop doesn't exist; they already went out of business.

> The 10%-margin shop doesn't exist; they already went out of business.

Exactly, just comes off as crocodile tears to me. This is a red herring and distracts from the real issue of not being able to opt-out of Outside Ads.

I'm willing to wager that not allowing opt-out is the only way they can reach a saturated-enough product catalog to make advertising profitable.