Scale is value and the potential to sales increase. Software license sales have infinite scale, Gwyneth Paltrow egg sales is high scale and $200 hand crafted in spare time earing sales is no scale.
> Not to become some front end for Aliexpress or the knockoff junk you find on Amazon.
Yes, it was intended a storefront for handmade junk for 2x the price... With occasional interesting things.
For my part, a fair number of my items are non trivial to duplicate without a distinct loss in quality, so I still get reasonable sales and could probably ramp things up of I wanted/needed to.
However some things I sell have been SEO squated with crap quality items that don't even look remotely the same quality, but I don't have the energy or need for additional sales to optimize my own SEO. So, right now, I sell items that mostly average out to $40/hour profit, which isn't too bad for a hobby I enjoy.
About 80% are items that are pretty routine but still fun to make knowing the recipient will like them. The other 20% are truly unique items that I love making as more of an artistic endeavor, even though the time:cost ratio is much less in my favor than the other 80%. But that's also why mass producers can't poach my sales -- the market is way too small for these niche items to create a production line to copy them.
I'm working in a medium (leather tooling) where you really can't reproduce handmade quality at a mass scale. At least not economically: custom die cuts w/ embossing plates and personalization aren't economical for unique designs where I can offer 50 variations even though some of them might only sell 1 every 3 months, and the handmade version looks better than the mass produced stamped-out design anyway.
It's very hard to find a niche like this though. A lot of things are easier to replicate in exact detail than hand-carved leather.
On the other hand, if you consider "scale" to be > $300k/year, then yes it's hard to do it without a manufacturing partner. And that can be a legitimate route even within the traditional Etsy framework! Design something, punch out countless copies w/ the "partner", and do final finishing/customization yourself. Or a few other similar models. The problem is this opened the door for sellers & etsy to rationalize keeping all sorts of definitively not handcrafted items in the marketplace. At best it's handmade by the "partner" through mass cheap 3rd world labor. At worse it's white labelled junk.
Anyway, the entire point of Etsy is that, even if "there's only so much you can get from handcrafting", that was what Etsy was for. The place where true, actual, real handcrafters were selling their items. Sure, it represents a cap on scale, but that was Etsy's mission. Not to become some front end for Aliexpress or the knockoff junk you find on Amazon.