Etsy Unveils Major Policy Changes Amid Backlash From Solo Sellers

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Etsy is making a major change to its policies today, allowing sellers to hire as many people as they need to run their businesses and to partner with outside manufacturers to produce their goods. While the marketplace for hand crafted goods faced a very public backlash over this issue in a recent GigaOm article, CEO Chad Dickerson has been considering changing the policies for some time now.

Etsy, which currently lists 18 million items for sale and is seeing 60 million unique visitors each month, has been wrestling with what “handmade” meant. In the meantime, guidelines for sellers grew from 4,000 to 14,000 words. The actual language allowed sellers to use “partial production assistance,” but what this assistance meant fell into a gray area. The rules were confusing, but many sellers came away feeling like they couldn’t expand their operations beyond a one-man shop. In other cases, some sellers began to bend the rules, adding more manufacturing resources. And unfortunately, some sellers left Etsy, says Dickerson. Additionally, sellers weren’t able to ship using outside couriers or fulfillment services–they literally had to drop their items off at the post office each time they sent a purchase made from the site.

Today, Etsy is making things clear in what they see as the most seller-friendly guidelines the company has ever implemented in its history. Sellers can now hire of any amount of staff, have someone else ship their goods, and apply to sell items they produce with manufacturing partners. Etsy is also expanding its rules to allow sellers to hire staff in other locations besides their own.

Instead of a focus on just handmade, Etsy has tweaked the guidelines to require products sold to have authorship with the seller, which basically means the handmade item began with your idea and vision (even if the item wasn’t necessarily assembled by you). Etsy is also admitting that sellers now have an array of methods to create their items, including laser cutters and CNC routers, to manufacturers who do small runs of high-quality items, and it is now acceptable for makers to use these tools and processes to create their items sold on Etsy.

To ensure that everyone is being transparent, Etsy is requiring that any artisan who is working with an outside business to make handmade items apply for review and approval by the beginning of 2014. The application requires sellers to demonstrate authorship of the idea, responsibility that the item is handmade and transparency on who and what is helping create the item. If the application is approved, you can list the items, and information about your manufacturer is made public in your shop’s About page.

As Dickerson tells us, this has been an ongoing conversation internally at Etsy for some time. The firestorm that erupted following the GigaOm article was symptomatic of the unease that everyone, including both Etsy and sellers, felt over the way the current guidelines were established. In addition, Etsy is also debuting urgent phone support for sellers, which will launch in November.

If anything, these clarifications allow sellers more liberty to grow as business as demand increases. Sellers could also tap into fulfillment services like Amazon’s fulfillment offering to make shipping and packing more seamless. And sellers can start using manufacturing techniques to make their products better. It seems that this move is actually seller-friendly and will only help sellers who are growing in terms of sales to actually grow within the Etsy platform.