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.

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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

the site.

 

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

move elsewhere.

 

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

moment.

 

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

IPO approaches.

 

Etsy has not yet disclosed when this will be.

 

Alistair Gardiner, Columbia Radio News.

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