I think it would make sense for Etsy to spinoff a separate site for used / mass produced goods. While some of the reseller volume is sellers trying trick buyers

I think it would make sense for Etsy to spinoff a separate site for used / mass produced goods. While some of the reseller volume is sellers trying trick buyers into thinking the products are first-sale handmade goods, and others are sellers simply going where the market is, I think there are also a large number of sellers and buyers that simply like the Etsy model better than Ebay. If they had a separate site the consequences of cracking down harder would simply be that sellers need to move their products to this other site, not shutdown altogether. This is particularly important for the fuzzy definition of used (sorry "antique") goods. Thus there would be less push-back and gaming from the sellers, and less financial incentives for Etsy Inc to be lax with the rules. It would improve the experience for both buyers and sellers of handmade goods, without harming buyers and seller of used goods. I think the main objection to this would be handmade goods sellers complaining that Etsy Inc is supporting knock-off sellers. While true, it isn't within Etsy's power to remove these off the internet altogether, and as long as the buyer is aware that what they are purchasing isn't handmade, I don't think Etsy has any obligation to avoid this market.