To Leave or Not to Leave Etsy? My Take and Advice

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If you’re an artisan selling on Etsy, I bet you’ve seen CNBC’s mini-documentary about the platform and felt a bit frustrated, maybe even a little worried.

While it’s been months since that video came out, I’m still flooded with emails from fellow sellers asking for my thoughts and wondering what they should do now that Etsy seems to be going downhill.

Like them, you've probably put most of your eggs in that basket, so I totally get why this might be cause for concern.

Yes, Etsy has changed a lot over the years, but honestly, many of these changes don’t exactly feel like they’re for the better.

Etsy used to be a haven for genuine, handcrafted goods, but now it feels like a cesspool of AI-generated junk.

If you haven't checked out their updated Creativity Standards yet, it’s worth a look. They’re now allowing “creations generated using AI tools based on a seller’s original prompts.” And their stance on AI-generated content? Let’s just say it’s raising some eyebrows.

To make things worse, more and more sellers are becoming dropshippers through Etsy Manufacturing, a service provided by Etsy that connects sellers with manufacturers to help them produce goods at scale.

With so many turning to production partners, there’s a growing concern that Etsy is drifting away from its roots in individual craftsmanship and inching closer to a marketplace filled with mass-produced stuff. This shift could seriously undermine the unique charm Etsy was once famous for.

And if that wasn’t enough, Etsy has been shutting down accounts without warning. Did you hear about the seller whose listings were deactivated because Temu used her product photos, and Etsy mistakenly thought she was the one infringing? If that can happen to a well-established seller, it could happen to any of us.

And then there’s the return of sellers from China. On the surface, it might seem like a good thing, but it comes with a whole new set of headaches. I say "return" because they were once allowed on the platform until Etsy decided to pull the plug, fearing the platform would get overrun with mass-produced garbage.

But now, they’re back.

We all know how Chinese sellers operate. Their prices are almost impossible to beat, and they have a habit of stepping on trademarks—two things that can spell disaster for small, genuine businesses here in the US.

Here’s another change that has set off sellers left and right—Etsy’s new $15 startup fee for new sellers. This might not impact existing sellers, but it does signal something troubling. It feels like Etsy’s slowly morphing into another Amazon, only more expensive.

Need more proof? Check the numbers. They don’t lie.

While Etsy had a boost in revenue in 2023, the total value of goods sold on the platform is down, and its stock has plummeted—down a jaw-dropping 70% from its 2021 peak.

The list goes on.

 Who do most sellers blame for all these setbacks? – The CEO, Josh Silverman. After all, a lot of these controversial changes kicked off when he took charge, and you can’t help but wonder if he’s screwing Etsy up.

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But is that really the whole story? Or are we just seeing things from one angle—the viewpoint of a frustrated seller?

Perhaps you need to look at the bigger picture to determine if CNBC claims in its mini-documentary were right, and what your next move should be.

Here’s what I think—

First—about Etsy’s declining stock price. Is it really because of the new CEO’s seemingly poor leadership and the sellers leaving the platform?

I don’t think so. While bad press might spook some small investors, it’s not the main reason the stock is dropping.

Truth is, Etsy is not profitable. It hasn’t been from the start. That’s the real reason.

Investors realizing they won’t make a profit from Etsy are pulling out. And I blame that on Etsy’s unique business model.

Etsy is one of the few “seller-first” online marketplaces. Its founder, Rob Kalin, made it very clear that the platform is intended for empowering artisans and reshaping how consumers think about the products they buy.

His vision: “Instead of having an economy dictate the behavior of communities, to empower communities to influence the behavior of economies.”

 Sounds cool, but not feasible.

 You see, in any economy, there’s a natural give-and-take between sellers and buyers that keeps everything flowing. You can’t expect things to lean too far one way without causing a ripple.

In fact, buyers tend to hold more sway in the market because they can walk away from products they don’t need without any real consequences.

Sellers, on the other hand, are taking a gamble—they risk losing money if their products don’t sell.

So, trying to throw off this balance isn't really a realistic goal.

That’s what happened with Etsy, at least until Josh Silverman stepped in.

Josh Silverman shifted some of Etsy’s attention from sellers to buyers. In fact, some sellers feel like Etsy is now turning into a “buyer-first” marketplace like Amazon.

Why? Because that’s the only way to make Etsy start making money. It’s the only way to attract investors again.

It’s a method that has been proven to work many times. It worked for just about every successful online marketplace there is—Amazon, eBay, Walmart, etc.

And it’s working for Etsy, too.

A lot of people, including CNBC, claim Etsy’s growth during COVID was just a fluke because more people were shopping online.

But they forget that Etsy was already growing before COVID, thanks to Josh Silverman’s leadership. So, clearly, he’s doing something right.

So why is the stock dropping?

There are a lot of reasons, and poor leadership isn’t one of them. CNBC also left out the fact that we’re in a bear market—almost every company is seeing a drop in stock prices, not just Etsy.

And let’s not forget, the economy isn’t great right now. People don’t have the same buying power as they used to.

Now, I’m not saying everything is perfect. Neither am I defending Etsy’s current leadership. As an Etsy seller myself, I’ve had my fair share of frustrations with some of the updates.

But I still believe Etsy is on the right path. Remember, Etsy is a business, just like our shops. If the business side falls apart, it’s not just Etsy that suffers—we do, too.

That said, I hope Silverman doesn’t keep favoring buyers too much. With all the automation and the bots shutting down legitimate shops, Etsy needs to take a step back and fix things.

And about all those products from China—they’ve opened the doors, but they need to put safeguards in place to protect small sellers and keep the market fair.

In the end, Etsy is still a solid platform, but there’s definitely room for improvement. Let’s hope they make the right decisions for both buyers and sellers.

So, how do you stay ahead with all these Etsy updates?

There are two key strategies:

First, build an email list to secure loyal customers. Etsy's customizable marketing tools make this easier than ever. While Etsy used to frown upon attempts to communicate with customers outside the platform, things have changed.

With the new marketing features, you can now encourage buyers to join your email list without breaking any rules. This is a game-changer for keeping your customers engaged and coming back for more.

Second, adapt, adapt, adapt. Honestly, there's no better way to succeed. If you're struggling to find demand for your products, create it. Get creative with your marketing, learn every strategy you can, and make your shop stand out.

Yes, competition from overseas sellers can be tough, especially when price is a big factor. But if you can show the unique value of your products—whether it's quality, design, or customer experience—buyers will notice, and that's how you win.

Selling on Etsy won’t be easy for a while, but by staying creative and flexible, you can still thrive as the platform evolves.

I hope these tips help you shape a strong strategy for your Etsy shop!

Till next time!