Around this time last year, I developed a nervous twitch around my right eye that made me look like a Bond villain. Instead of getting more sleep or drinking less coffee, I decided to buy an eye patch—but, like, a cool eye patch. My eye patch should be unique and stylish in addition to being functional, I decided, and reflect that I am quirky and confident.
There are some things you can really only buy on Etsy.
The Dumbo-based purveyor of all things twee is turning seven next month, and my, how it’s grown. The site contains more than 875,000 virtual shops—“VintageStylez,” “Crochet Concepts,” “Palimpsestic”—with new ones popping up every day. The company just announced a $40 million round of funding, bringing its total outside investment to more than $90 million and its estimated valuation to around $600 million.
I selected a patch made out of yarn that looked like a green-and-yellow snake eye—just one of a few dozen options in yarn, leather, lace and plastic. The $22 piece was knitted by Krisztina Lazar, a 30-year-old designer in San Francisco, who modeled it in the photos on her Etsy shop. It arrived in a reused box, wrapped in plain tissue paper, with a hand-written thank-you note. My friends all remarked on how funky it was. It was the perfect Etsy experience.
Etsy, which sprang to life as a more artisanal alternative to eBay, built its reputation around interactions like this. Rob Kalin, the site’s founder and former CEO who famously makes his own underwear, wanted a place to sell the computers he built from scratch and fitted with acrylic cases designed to look like wood. But as Etsy grows, it’s starting to stray from the cult of DIY. Increasingly, Etsy shoppers are stumbling across factory-made watches, non-descript dresses from Shanghai, and even a Coach bag or two.
The headquarters for disenchanted Etsyites is Regretsy, the blog comedian April Winchell launched to call out the ugliest items on Etsy. At first the site was merely a catalog of items Ms. Winchell thought were lame, but the “not remotely handmade” category really struck a chord. Regretsy gets more than a million views a month, said Ms. Winchell, whose track record of Etsy-shaming could qualify her as a handmade activist. “I got an email from a woman who said her husband had saved up like $200 to buy her some steampunk watch, and she saw the same thing on eBay for like $2. She was just heartbroken,” Ms. Winchell told Betabeat as an example of how Etsy has been corrupted by cheaters.
Sewon Chung, a 23-year-old photographer living in Bed-Stuy, was so excited when she first discovered Etsy that she wrote a college paper about gender and e-commerce. “I was really into looking into all the Etsy shops,” she said. “I remember feeling like there was sort of a tangible community and sort of a culture.” Since then, she said, Etsy has changed a lot. “One thing that I’ve been noticing a lot these days are those shops that are just filled with ‘craft supplies.’ The supplies in the past were like yarn or twine or something. Now you see a lot of like, really cute stickers and things from Asia.”
Ms. Chung recently revised her Etsy essay for her grad school applications, taking a more critical line. “I realized it is a corporate entity and it’s run like any other company. It’s not just a bunch of creative girls hanging around,” she said, adding, “I definitely don’t go on Etsy as much anymore. We’re all waiting for the next big thing to come out.”
That’s not to say that Etsy is in trouble. Etsy processed $525 million in sales in 2011 and has been profitable since 2009. Still, it’s based on an internal contradiction—it’s a 21st century dot-com defined by a pre-industrial ethos—that represents an increasingly difficult straddle.
The discontent among devotees came to a head in late April, when 30-year-old furniture designer Mariana Schechter struck Etsy gold. The company selected her as one its official Featured Sellers. In an interview on the site’s blog, Ms. Schechter was asked a standard question: How do you define handmade? “There is something personal and unique that occurs when you craft something with your hands,” she replied. “Mass production makes it easier to sustain bigger profit margins, but it takes away from the individuality of each item.”
At the time, Ms. Schechter had 240 pieces of rustic-looking planters, mirrors and benches made from reclaimed painted boats, for sale in her shop, EcologicaMalibu. She seemed the perfect Etsy poster girl.
But Regretsy’s Ms. Winchell immediately posted an entry tagged “Bullshit.” As it turned out, Ms. Schechter, was importing Balinese wood through a wholesaler called All From Boats, and some of her pieces were listed on its site and at Overstock.com. She also employs eight California workers who assemble her designs, which some of the Etsy faithful considered a breach of Etsy’s terms of service.
The ensuing fury in the Etsy forums and the comments on Regretsy sparked Protesty, a virtual walkout during which hundreds of Etsy sellers went into “vacation mode,” disabling sales on their shops for a day in the name of “genuine handmade.”
“This particular woman pays carpenters to build this stuff,” Ms. Winchell told Betabeat, drawing a distinction between handmade and “handmade aesthetic.”
“When you have eight employees, that’s a business,” she added. “I have nothing against reselling at all. I just think that people who buy mass products and merchandise to sell at a profit are really allowed to do so anywhere except Etsy.”
What one is and isn’t allowed to sell on Etsy is dictated by the Dos and Don’ts, a 10,000-word document that waxes absurd in its attempt to articulate the laws of Etsyland.
The site has three categories: handmade goods, vintage items and craft supplies. The rules forbid handmade sellers from relying on a third party for a “majority share of a handmade item’s creation.” Etsy says “handmade” can also mean “hand-assembled” or “hand-altered”; gift baskets, however, are verboten, as “creatively re-packaging commercial items does not qualify them to be sold as handmade.” Items must be more than 20 years old in order to be considered “vintage.” In the craft supplies section, sellers may not list tools such as make-up brushes or wax warmers “that are used in conjunction with handmade items, but are not used to create a new item.”
The Etsy community takes the Dos and Don’ts very seriously, carefully hunting down transgressions. Betabeat messaged a very general inquiry to one suspected “reseller,” the vernacular for Etsy sellers who skirt the rules. The seller, a Chinese jewelry shop with 1,214 items, guessed immediately what we were after: “Sorry,just Work hard,and more than 18 hours every day,no other shortcut.”
Many of the apparent “resellers” are actually compliant with the terms of service, Matt Stinchcomb, Etsy’s VP of marketing and brand, told Betabeat on a recent visit to the company’s sunny office, which now spans four floors in an industrial-chic building on Water St. and is half under construction.
The Dos and Don’ts, written in 2007, were supposed to be a simple guide, but they have become more Talmudic over time. “It gets really tricky,” Mr. Stinchcomb explained. “If you assemble a necklace of mass-produced beads, is it handmade? If you paint a painting and then scan it and print out a digital print, is that handmade?” As members of the community raised various objections, he said, the list became a “giant hairball.” Now, it’s “like German tax law,” he said.
Mr. Stinchcomb, a musician and screenprinter, was Mr. Kalin’s roommate when he became Etsy’s first employee. (Mr. Kalin stepped down in 2008, returned briefly, and exited again last year.)
Mr. Stinchcomb is responsible for maintaining Etsy’s integrity as a brand for crafters, makers and seekers of “authenticity,” as he put it. His morning had started with a cease-and-desist call to a tech conference that had slapped an Etsy logo on a display Ferrari. “I can’t think of anything more off-brand,” he said.
Mr. Stinchcomb still likes a tagline he came up with that Etsy never used: The People’s Marketplace. It sounded too Communist, he said. (Ironically, people in formerly Communist countries can be wary of Etsy’s love affair with making, he said. “A lot of times they were forced to make their own clothing if they wanted to have a different style. And so the minute they didn’t have to do that anymore, they’re like, ‘I’m never doing that shit again.’”)
People are what make things authentic, Mr. Stinchcomb said. So rather than codifying what already seem an arcane set of rules, Etsy is responding by demanding more transparency from sellers, requiring more information about their means of production, so a customer can choose just how handmade she needs her furniture to be.
The company has also beefed up its Marketplace Integrity, Trust and Safety team. The group, which occupies a large room in the office, crawls the site for violations and reviews sellers that have been flagged by the community. An Etsy vetting can be quite thorough: The site may require flagged sellers to submit the names of their employees, receipts for materials, and photos of themselves in their shops holding up handwritten signs.
Further complicating the matter is the problem of “graduation”: some of the best Etsy microbusinesses leave the site once they become successful enough to hire workers. (UPDATE: Etsy says these users choose to leave on their own because they feel they’re no longer in compliance, not because Etsy kicks them out.) But even though Etsy’s rules seem to forbid sellers to have employees, it’s okay for a group of artists to share a shop as long as it is labeled as a “collective”—which is how Ms. Schechter and her carpenters slipped through.
The prevailing conspiracy theory says that Etsy secretly allows resellers on the site because they generate a lot of revenue. Not true, Mr. Stinchcomb said, insisting that the damage to the brand would outweigh any fees resellers could bring in. Etsy only gets complaints for about .02 percent of listings, he said. Right now there are no serious Etsy competitors—Seattle-based Bonanza is moving in the eBay direction, and the Google-funded CustomMade.com is focused on commissions—but that could easily change.
The uproar and Protesty protest prompted Etsy to review Ms. Schechter’s business. While giving her business model the okay, an update to the interview noted that she should have labeled her shop a collective.
That didn’t satisfy the detractors. “What a scandal!” wrote Regretsy commenter meeow78. “It looks like Etsy is turning into a Antropologie type website.”
“That’s it, I’ve shut my shop – I’ve had enough of Etsy’s dubious cupcakery bullshit,” declared Kaiser.Tia. “Any suggestions for a place to sell genuine handmade goods that I have genuine callouses on my hands from?”
Funnily enough, the definition of “genuine handmade,” Protesty’s cause célèbre, still remains elusive. The whole kerfuffle reminded me of a trip in 2007 when I bought a black-and-orange painting of a monk holding an umbrella at a precious lantern-lit night market in Laos. Over the next few days, I saw the monk with the umbrella everywhere—someone must’ve painted the image once and realized he had a hit. I caught a ride with a teenage boy on a motorcycle. He said he was a painter. What do you paint? I asked. “Monk,” he said. “Monk with umbrella.” Handmade?
“There is no clear-cut definition,” Dóra Jánki, one of the Protesty organizers, said in an email. “Everyone must define it for themselves.”
Still, she said, “it’s not rocket science.”
CORRECTION: An earlier version of this story incorrectly said Etsy gets complaints for about .02 percent of sellers; the company gets complaints for .02 percent of listings. Betabeat regrets the error.
A version of this story appeared in the New York Observer the week of May 29, 2012.