Etsy’s IPO Announcement Causes Concern for Craft Sellers
Host 1: Investors will soon be able to own shares in the online craft market Etsy. The firm’s initial public offering could be the biggest tech investment opportunity since the nineties for a New York company.
Host 2: But some current users of the site weren’t so excited by the news. Namely, the people who sell the products on Etsy. Alistair Gardiner reports.
If Etsy doesn’t keep both its buyers and its sellers happy, the whole business could
fall apart. The number of buyers on the site is increasing and so are revenues. But
Etsy has riled its sellers before. Back in 2013 it changed its policy. The old one
required sellers to actually make the products. Under the new one, manufacturing
could be outsourced.
Rachele: That kind of freaked me out.
Rachele Rouquie has been selling artwork and greeting cards on the site since 2008.
She says as soon as the new policy was introduced, mass-produced items flooded
Rachele : it’s blatantly obvious that a lot of the places that are like “made in China.”
And that’s been bad for sellers like her.
Rachele: It drives down the whole price-point on Etsy, because then
you see ‘oh ok this person’s handmade sweater is $20 and this person’s
is $200. Because they actually made it.’
Sellers are nervous that there may be more changes like that one when the company
goes public. Ann Sherman is a finance professor at DePaul University, in Chicago.
She says that the company will be a lot less attractive to invesotrs if sellers decide to
Sherman: That’s a big concern and there’s certainly competitors who
are trying to attract them, there’s Art Fire, Dwonder, Zibbet, and people
have gone there in some cases where they’re dissatisfied with Etsy.
Some of those sites are growing, like Zibbet, based in Australia.
PEACOCK: We have close to fifty thousand stores on the site at the
Jonathan Peacock founded Zibbet in 2009 as a place to sell fine art. The firm quickly
expanded into handmade and craft products, like those sold on Etsy. Peacock says in
a normal week about a hundred and fifty sellers join Zibbet. But since Etsy’s
announcement, he says, there have been a lot more:
Peacock: At the moment around 350 new sellers a week are joining
the site. And every time someone joins the site, we ask the same
question: “Why did you join Zibbet today?” And all the answers at the
moment are all about Etsy, their IPO, they’re not happy about how… the
direction that Etsy’s heading.
DePaul’s Ann Sherman says the company seems to be aware there’s a risk of
upsetting sellers. And though last year the company’s losses went up, even as its
revenues grew, she says Etsy has greater potential than a couple of other companies
that are expected to go public this year.
Sherman: You could argue that it’s similar to Uber and AirBnB in that it
allows people to make money on the side and flexibly, without any of
the regulatory concerns that Uber and AirBnB face.
Etsy seller Rachele Rouquie’s is looking forward to the attention that the IPO is
likely to bring the site. But she also thinks that there might be more changes on the
way and they may drive away customers who want the kind of products that Etsy
was conceived for. Her concern is that shareholders might pressure the company in
ways that would be bad for sellers like her.
Rachele: I feel nervous about where the loyalties will lie as far as
caring more about the share-holders and the consumers that are
shopping on Etsy, who are obviously people I care about, but the shop-
owners: I fear that we’re gonna be lost in that.
Rouquie is considering building her own website to sell her products. She’ll stay
with Etsy for now, but she’ll be keeping a close eye on what the company does as the
Etsy has not yet disclosed when this will be.
Alistair Gardiner, Columbia Radio News.