It’s really easy to criticize Etsy. Although I acknowledge that the platform is far from perfect, I remain loyal and I’ve recently been reminded why.
In December of 2014 those of us who sell digital products were in a state of crisis over the European Union’s new tax regulations. Although Etsy was unresponsive to our pleas at that moment, a month later they did issue a response saying that they were working on a system that would collect VAT from EU customers and remit it on our behalf. Six months later, it’s in place! (Read Etsy’s official announcement here.) I made my first sale that included VAT on Etsy yesterday. Complying with VAT regulations is really complex. For my own shop here on my site I have a Woocommerce plugin through Taxamo that stores the multiple additional pieces of information about my EU customers that are required and figures and collects the VAT for me. I then have to remit quarterly to a bank in the UK via wire transfer which I have to do in person at my local bank at the cost of $40 each time. It’s complicated and time consuming and expensive for me to do. On Etsy? It’s now covered.
And that’s not all. Etsy is lobbying in Washington this week, working to represent the needs of small creative businesses when it comes to internet sales tax and net neutrality, among other issues. “Government and regulatory agencies should enact policies that support sellers’ efforts to start and grow their creative businesses, enabling the broader maker economy to thrive,” they say. And they’re right. Lobbying is expensive and complicated, just like VAT. Etsy is out there on the forefront advocating for people like me while I sew in my studio.
I admire Etsy’s efforts to help people living in underserved communities start creative businesses through their Craft Entrepreneurship program. In cooperation with organizations that are already serving these populations, Etsy is providing a curriculum and special training to local Etsy sellers who then teach in-person classes on setting up the store when you start an etsy shop and running an Etsy shop. The goal here is for people in low income populations to be able to earn supplemental income through their craft. I spent eight years working in inner city schools in Baltimore, Mississippi, and Boston and I know how much work there is to do. This sort of social outreach isn’t easy or cheap. Like lobbying, it isn’t something that Etsy has to do. But they are.
Etsy has other new initiatives, but these few stand out to me as real efforts to support sellers, to make institutional change, and to be an inclusive community. I’m proud to be affiliated with them as a business.
I’ve always felt that Etsy leads the way. Even its flaws – the resellers, the hugeness, the changing definition of handmade – are representative of issues that we as an online community of makers face as a whole. I’ve been an Etsy seller for 10 years this month. I’ve earned $7,343 on Etsy this year with very little effort on my part and for that I’m very thankful. I’m so glad Etsy is still here, innovating and thinking broadly about what our community is and what it could be.
thanks for sharing the good news!
“Even its flaws – the resellers, the hugeness, the changing definition of handmade…”
To me, these things negate their entire reason for existing to begin with…and why I gladly pulled both of my shops in 2013.
And why I dearly miss Regretsy.
I thought on this a little more…As a 10 year shop-owner, you no doubt had an established customer base when all the bad parts of Etsy started to show. So I can see how it hasn’t negatively impacted you very much.
For smaller, newer shops, it is a death blow.
And does Etsy care? No. Because that reseller than can immediately open with 2500 items starts right away to generate tons of sales and tons of sales = lots of listing and transaction fees for Etsy.
I rarely BUY from Etsy anymore because I can’t discern all the time what’s really handmade and what’s another copycat EBay store. Hopefully another handmade market takes it’s place, soon.
Nikisha, I think the best way to discern what’s truly handmade is to follow your favorite makers elsewhere, on their blogs or on Instagram or Facebook. Over time you see what they’re working on, how their studio looks, what shows they’re doing, what they’re thinking about – those glimpses into their process tell you that their work is truly handmade. I recently bought a mug from Paper & Clay on Etsy: https://www.etsy.com/shop/paperandclaystudio I had followed Brit on Instagram for months and every time she posted a photo of her mugs I loved them so much. I was just waiting to buy one for a special occasion gift and my sister’s birthday was perfect. Knowing that she was on Etsy made her shop easy to find and I could add a cross stitch leather cuff kit from Red Gate Stitchery: https://www.etsy.com/shop/RedGateStitchery at the same time (I follow Susan on social media as well and love her kits!). Etsy makes it easy to find everyone, easy to shop and checkout. I think for many people it is the Google for handmade. Knowing that’s how people behave, as a seller I want to be in the mix! And it works. In 10 years Etsy has never featured my shop or me in any way, but my shop continues to earn money. It’s the best form of advertising out there. Once someone purchases from my shop, I invite them to join my newsletter and, if they do, they are then part of my community. So worth it!
Great post, have been interested in creating an ETSY shop for some time now. Yes, there are issues, but I haven’t found a better
place yet…
I have a 3-year old Etsy shop and I love the opportunity it gives me to see how folks like my handmade and vintage things. I’ve sold 102 items in 3 years — which isn’t phenomenal — but I’m learning a lot and I love connecting with customers around the world. It isn’t easy learning how to run a business, and Etsy gives me an anonymous opportunity to test the waters and see what works. The discouraging part is seeing how they promote some sellers over and over. I’m studying what seems to set those shops apart and working toward the goal of being highlighted.
Abby, thank you for the professional way you share business ideas with us. I found your site about 5 months ago and am regularly reading and researching your suggestions. You share openly — again, thank you. Have a prosperous and rewarding rest of the summer . . . and blessings on all the work of your hands.
You’re welcome, Leslie. I agree with you that Etsy is a good way to test the waters and learn to run a handmade business with very little commitment. That alone is a valuable thing.
My views on etsy don’t change. They dupe the buyer over what it is they sell on the site, ie. handmade and their customer service is terrible (their customers are sellers as well as buyers and they are treated worse than anyone). The services they provide are often for a limited and carefully pre-selected group, they do not treat everyone fairly yet everyone pays at the same rate. They are pretty mercenary and pretty rude in attitude and I basically don’t much don’t bother with them these days. Integrity is key for me and it is something they lack as a company. They knew about the VAT thing well in advance of the change and chose to ignore it (even abdicating responsibility) until sellers made a huge fuss, (the only kind that is ever acted on, as mostly the will of their sellers is ignored) before that, they planned to do nothing. Etsy works for relatively few people.
I see the handmade movement as having nearly exhausted and burned itself out now, something I do find a great shame although kind of inevitable. I hardly ever see anything newly created on social media anymore and blogs have just been shutting down for months now. There is a tiredness and lack of buzz. These things do naturally ebb and flow and I feel we will now have to wait a while for a new surge. Making a profit is pretty untenable for most creative people when you are competing in a world market. Many people are selling their finished product at a loss and working as hard as if they were in a sweat shop. The message given over by etsy is that handmade doesn’t work for them and they don’t want it. The small seller is as loose change to them and they don’t mind shedding them as they have bigger fish to fry. They are all about manufacturing. The very shops etsy highlights and pushes are those that I absolutely have no interest in, either aesthetically or otherwise.
I have to respectfully disagree. I think handmade is stronger than ever and I see new things being created all the time. I don’t feel a tiredness or lack of buzz and I remain committed to blogging and continue to read over 100 blogs and find new ones every day. It is possible to make a living with handmade. It requires a lot of income streams and constant innovation as technology shifts, but I actually think it’s more possible now than it’s ever been. I recognize the deeper problems Etsy faces, perhaps the most important of which is that their sellers distrust them so much, but I remain loyal. I admire the platform they’ve built and it brings new customers to my business every day without any effort on my part.
I must agree with you Abby that handmade is as strong as ever. To me the words handmade and art go together. I handed grandma’s sewing machine, and a folding sewing machine table down to my 30 year old daughter this past week. I also offered her any of my fabric stash that she likes. She is making a quilt for a pregnant friend. She and her husband have bought their first home, and she has plans for curtains, pillows, and a quilt for the guest room. She recently told me that she is getting ready to write a blog on food, cooking, entertaining, and decorating for any holiday. I know that grandma’s sewing machine will be part of it all.
Absolutely agree!
Etsy has become all about the $$$ and that means big mass marketing “shops” vs actual handmade!
Great points, Abby. There are negatives (redefining handmade) and positives (yes they dragged their feet but did take on the ridiculous VAT requirements), but my shop is still doing well (way better than my other one) and I have no intention of closing it. They’ve made my business practically effortless with the automatic downloads and payments. It’s worth the fees to me. Yes, it’s gotten so huge, but I think it’s always been important to build your business outside of Etsy. Those that rely on Etsy alone to get the word out about their shop may get lost in the crowd.
Effortless is so true. While I was writing this post a customer spent bought $72 worth of patterns. Someone I’ve never met or interacted with online – they found me through Etsy.
Late last month I wanted to buy a birthday gift for my very creative sister. Birthdays are the best excuse to buy handmade and the first place I turned were my Etsy favorites. I picked out two awesome things from two different sellers, both of whom I follow on Instagram, and bought her gift. Even after all these years and all the handmade businesses I’m aware of, when I need a gift I turn to Etsy. Those sellers that also build an Instagram or blog following are the ones I trust and feel I have a relationship with and they get my business. It’s a great system.
I’m very happy that Etsy has created a solution to the VAT problem. It was very needed. I’m glad that your shop is doing well on Etsy too. I still buy from Etsy shops and will in the future, however my shop is in the process of just running down the current listings and then it will close. Sort of makes me want to cry, after working on it for almost 2 years.
Etsy’s definition of handmade, design and have it manufactured, versus my definition of handmade, design and create the item don’t really meld well. I don’t have the money to go out and have my products made, I don’t have the computer savvy to create social media interaction. Like you, I do read a lot of blogs and I wrote a blog for a year and a half, it dealt with tutorials on different art medias, and the product that were out there to use. It was very enjoyable but at the end I took it down because I had 5 followers and I was either related to or friends with them all. I tried Facebook. People can be very hurtful. The day one person posted “I don’t even know why you waste the money on materials.” I decided that perhaps Facebook wasn’t for me. I have all of my items on Pinterest and get maybe 4 or 5 hits a month from there. I tried to follow where my pins were ending up until I realized that most of them went to DIY boards. I can’t do shows because of a disability and all I really wanted out of Etsy was to make enough money to be able to buy more materials to give me things to do.
It isn’t Etsy’s fault that I’m not a success, and I really don’t blame myself either. I’ve done everything that they have suggested. I’ve written and rewritten every listing, tags, titles and descriptions, using tags that seem popular. I’ve listened to their webinars, read their blogs and researched other shops. I simply can’t compete with Etsy’s definition of handmade. I can’t buy an item in China, for pennies, whether I designed it or not and so my product is too expensive and won’t sell.
Thank you for writing about your good results through Etsy. It’s good to know that they are listening and have fixed the VAT problem. Maybe in time they will listen to people like me. They really need to have different distinct categories, vintage, supplies, kits and patterns, designed and manufactured, home made. I realize that everyone should be able to sell there, and with the exception of resellers, these 4 categories would fix a lot of the problems and would make Etsy much more successful.
Abby, I’m also proud to be an Etsy seller. I found Etsy after moving to a new city where I knew no one. Because of Etsy I started making and selling aprons. Eventually, I started a blog to talk about each apron’s inspiration. Customers started asking if I would turn my designs into patterns. As of today, I’ve sold 4448 items on Etsy.
I’ve shifted my focus from selling on Etsy to blogging, but I still have my store and every.single.day people purchase one of my patterns. I use a blog plugin called Etsy360 which gives my blog a shop that runs through Etsy. This creates true residual income and very little effort is expended to earn this money.
Truly, my life has been changed because I opened a little Etsy shop in 2008. I have no complaints.
RE the VAT question. I live in the UK. I am curious as to why as a buyer I am being charged VAT on instant downloads from UK sellers? It is my understanding that I should not be charged. All the PDF pattern sellers that I clicked on all had VAT added unless they were being emailed manually rather than instant downloads. I don’t think there should be any charge for UK buyers, as sellers do not pay VAT here unless they are above the thresh hold and most do not earn that much (currently £81,000 per annum I think). Sellers need to collect VAT from the buyer on behalf of the country where the buyer resides, so if I lived in France say then VAT would be payable but not from myself as I live in the UK.
Is etsy charging VAT to me as a EU buyer by default regardless of where I live and regardless of the VAT status of the seller? If they are, sellers will certainly lose sales as a sudden hike of 20% is not something that will go down very well – some patterns are pretty expensive. Also where is that money going, that is the important question. I presume not to the seller but supposedly to be passed on, but to whom and why? The UK seller is not required to collect it and pass it on unless the buyer is from another EU country to the UK so where is it going to go? I don’t think I am wrong about this but there is always the possibility I am of course. I got some of my Information from here http://www.telegraph.co.uk/finance/businessclub/11268706/Victory-for-UK-micro-firms-as-HMRC-tweaks-EU-VAT-MOSS-rule.html
and http://littlecottonrabbits.typepad.co.uk/my_weblog/2014/12/new-eu-vat-laws.html
I found no contact address that I could see on etsy. There used to be one I am sure but it must be hiding if it is there now. Otherwise I would be asking this question to them. I notice I can download a photo of Chad but not contact him!
If you go to the bottom of your home page there is a help button that will take you to the help search. At the end if the answer is not there for you, they give you the option to email etsy. Because of the high volume of emails it does take a few days for them to answer, but they will. I’ve always found their answers to be very thorough. Sometimes customers and shop owners find a glitch in the system before Etsy does. You can imagine that with that many customers and shops things are bound to not work perfectly all the time. If you have purchased a pattern that you feel should not have charged you the VAT, contact the shop owner for a refund of that. As I understand and read, Etsy collects the VAT and pays the tax on the shops behalf. Which is a wonderful upgrade for all the shops who offer downloads.
Thank you Jennie
I did eventually find the help button in my wanderings and have asked for a response from etsy. It seems to be the case that VAT is not payable on pdf downloads from most if not all sellers (only those registered for VAT as they are past the threshold).
“If you make taxable supplies of digital services to consumers in other EU member states, and your UK taxable turnover is below the UK VAT registration threshold, you can use VAT MOSS to account for the VAT due in other EU member states, but you don’t need to account for and pay VAT on sales to your UK consumers.” Quote taken from government information site below:
athttps://www.gov.uk/register-and-use-the-vat-mini-one-stop-shop – scroll down to the ‘Businesses currently below the UK VAT registration threshold’ section.
I don’t think it is simply a matter of applying to a seller for a refund, there seems to be a basic fault with etsy in collecting VAT where none is required from UK buyers. I don’t think it should be asking for tax from anyone if it is not appropriate, and it affects all UK buyers who may not be aware that they should not be paying. I doubt if sellers can access that money to pay it back to unhappy buyers, if they got individual requests to do so – as that money would not be passed on to them from etsy one presumes. To refund even if they were agreeable would be reducing their own profit margins.
Collecting taxes when they are not due, would be quite serious I would have thought. I am interested to know what etsy says – there may be a reason but it isn’t apparent to me right now. I am waiting for a response from them. That is a 20% mark up on previous retail prices so it will have a knock on effect for UK sellers. I am definitely not willing to pay unrequired tax for sure! I encountered some patterns whose prices are now – with that 20% tax added on – just too expensive to be acceptable to me as a consumer. It is not helpful to the UK seller to have VAT collected on their behalf when there is no reason for it and to the contrary may prove detrimental for some.
It is a good service for etsy to provide – only when that VAT is lawfully required though. So for a UK seller who has a customer in France then all well and good and it simplifies the process no end. But no, not so good for me also in the UK. When the seller is exempt from paying VAT – why should I the buyer?!