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Etsy's New Wholesale Platform: A Crafter's Friend or Foe?

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Images via the Etsy Blog
Images via the Etsy Blog

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This summer, craft-focused retailer Etsy.com will expand into Etsy Wholesale. Instead of merchants simply selling to consumers, the commerce platform will now allow and support vendors who are producing and selling extremely large quantities of goods.

The move signals a significant pivot from Etsy's handmade, small-scale origins. According to new rules, companies on Etsy Wholesale can hire merchandisers to make products for wholesale distribution. Best-case scenario, the woman you buy your hand-drawn stationary from lands a deal with Anthropologie. Worst-case scenario: those "hand-made" items you'd buy for wholesale distribution are actually being produced en mass in factories.

According to Etsy CEO Chad Dickerson, the company is still devoted to the local and handmade but said that change was inevitable. When Etsy launched in 2005, the company was extremely strict about what constituted "handmade." Some 10 years later, the site has more than 1 million active sellers, many of whom are struggling to keep up with production. As the company explained in a blog post last month, this new wholesale policy will "help sellers grow."

After the jump, Dickerson explains how the Etsy has changed its definition of "handmade", how the company's helping vendors through the wholesale process, and why Etsy hopes this won't cause it to lose its made-local cachet.

Images via the Etsy Blog

What were the principal rules of selling when Etsy first opened?
"Etsy was conceived by Rob Kalin in early 2005. A painter, carpenter, and photographer, Rob found there was no viable marketplace to exhibit and sell his creations online—other e-commerce sites had become too inundated with overstock electronics and broken appliances. When Etsy launched, items fell into one of three categories: handmade, vintage or craft supplies. The same is true today, and people on Etsy sell everything from food to furniture to art to accessories, and so much more—there are more than 25 million items for sale!"

Why are Etsy's policies changing?
"Well, the world around us is evolving all the time. In 2005, we never could have imagined people with 3D printers in their homes and access to laser cutters in their studios. New technologies have given our community new opportunities to turn creative ideas into products, and we want to make sure that as we grow and evolve, we can keep up with these changes. At the same time, many sellers have built viable businesses on Etsy and want help growing. We believe Etsy can provide a pathway for that growth. In order to support their success, we wanted our policies to reflect the needs of our community and make sure we can scale with them."

Images via the Etsy Blog

What was the idea behind the wholesale expansion of Etsy?
"Many Etsy sellers have been doing wholesale on their own for many years, but it was cumbersome and difficult, so we built a platform and tools to make it easier. We also knew that many retail buyers were already searching Etsy for those unique items for their stores [ed note: and copying items from Etsy vendors], but finding it hard to figure out who could wholesale to them in the quantities they needed. On Etsy Wholesale, retail buyers can connect with vetted vendors and place large-scale orders at wholesale prices (generally 50% of retail). We want Etsy Wholesale to be the best source for buyers and boutiques to find qualified vendors, enabling discovery and facilitating new business relations in a personal way online."

How is the company working with Etsy sellers to help them through the wholesale process?
"We help our sellers in many ways. This includes education about things like bookkeeping or hiring, community advice from peers, changing our policies so sellers can partner with outside manufacturers, and building tools like Wholesale to extend their sales channels and find new audiences. Etsy provides education, support and marketing to help sellers new to wholesale be successful in this new sales channel. For example, Shelli and Seth Worley of Worleys Lighting in South Carolina were brand-new to wholesale. Etsy provided one-on-one education and support, helping the duo adjust their pricing and develop a line with higher-quality materials specifically for wholesale. This new sales channel helped them move their workshop out of a garage and expand into a warehouse nearby."

Images via the Etsy Blog

How does the company define "handmade"?
"Over the years, one of the things that we've learned is that handmade is a powerful word, and that everyone has a different personal definition. When Etsy started, we relied on that one word to carry all our values out into the world. Almost immediately, that created challenges. Many of us felt we knew handmade when we saw it, but that was hard to put into an enforceable policy. What kind of tools could you use? How many hands could shape the product? Could you use mass-produced components to put together something original? When we rethought our policies and what handmade means on Etsy today, we considered the many different ways sellers make their items— everything from raising the bees that provide the wax base for hand-dipped candles to 3-D printing jewelry—and we realized that handmade on Etsy couldn't be defined as a single method or process. Instead, handmade was about values we as a community prize.

On Etsy, handmade today refers to new, finished items that were designed by our shop owners. It doesn't mean a single making method; instead it's about three principles: authorship, responsibility and transparency. Authorship is the idea that your handmade item begins with you; responsibility is having confidence in our sellers that they are invested and knowledgeable on how their handmade items are made; and transparency by being open and honest about how items are made and contribute to building a marketplace built on trust. These are the values we see Etsy sellers living every day. They capture what sets Etsy apart, and they create a clear framework for giving more opportunity to sellers."

Images via the Etsy Blog

What's the difference between Etsy and the new wholesale platform?
"On the Etsy platform, anyone can open shop and sell their handmade items, vintage items, or craft supplies as long as the product and process meets our policy standards. Etsy Wholesale is a private marketplace for wholesale sourcing by retail buyers from boutiques and other stores. We launched Etsy Wholesale because we knew that retailers were coming to Etsy for inspiration for their stores and we wanted to be able to connect our sellers to those retailers and allow for an easier search experience for our retail partners."

How does the company decide who can wholesale?
"During the wholesale application process, our main expectation is to ensure that both the retailer and the seller have past experience with buying and selling at a wholesale level and share our core values. The sellers should have a passion for wanting to grow their business and be able to scale their product with appropriate pricing and production. The product focus is on unique, quality products that are hard to source elsewhere."

Is the company worried it will lose its special "local, home made" feel by growing bigger with wholesale?
"Etsy is about direct connections between makers and shoppers. With our recent launch of the Wholesale platform and our policy changes on Etsy we wanted to give the Etsy community of artisans autonomy to work and create in ways that support their growing businesses. The people and incredible personal interactions that happen on Etsy have always been at the core of the marketplace, along with the ability to find one-of-a-kind items made with attention and care. Any changes we make or features we launch are in service of supporting commerce that also delivers personal connection and meaning."

· Etsy [Official Site]
· Etsy's Sweeping New Policy Allows Manufacturing Partners [Racked]
· Reddit Is Banning All Shameless Etsy Plugs [Racked]