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This isn't new. The Regretsy blog extensively complained about dropshippers in 2010. The problem is that operating a two sided marketplace connecting small mak

This isn't new. The Regretsy blog extensively complained about dropshippers in 2010. The problem is that operating a two sided marketplace connecting small makers to customers just really sucks as a business. Tons of churn, intractable problems with quality and fulfillment, having to pay for a lot of customer service agents who fundamentally can't solve any problems, since they don't actually work for the person who makes the stuff, and can only hit the "refund" button. Etsy has every reason in the world to want to get away from small sellers and move to high volume manufacturers, (who have actual QA and customer service departments, which a guy hand carving chess pieces in his basement doesn't have) and nothing to stop them. So the obvious thing happens. (Except then you're competing directly with Amazon in its area of greatest strength, which historically has been corporate suicide...)

marcinzm 2y ago
> and nothing to stop them Except Ebay and Amazon already existing.
- gunapologist99 2y ago
  And Amazon having rather high fees. Jeff Bezos used to say, "Your margin is my opportunity", but I'm not sure he even cares anymore.
derefr 2y ago
> intractable problems with quality and fulfillment • Re: fulfillment — why not ask Etsy sellers to pre-stock everything that's not made-to-order into fulfillment centers like Amazon's? And, in fact, to send anything that is made-to-order to a fulfillment center first, where it'll be inspected, re-wrapped and re-shipped by the fulfillment center — with the buyer's card only having a hold, not a charge, on it until the seller's goods are inspected by the fulfillment center as good? (In other words: turn the process into a goods-for-money mediated escrow.) • Re: quality / drop-shipping — I feel like a lot of this could by solved just through simple semi-automated verification. Require for a product to be listed, for the seller to upload a video of themselves making the thing. Then pass those videos to MTurk workers to evaluate them for tricks. > Etsy has every reason in the world to want to get away from small sellers and move to high volume manufacturers Except that... that's their whole niche. Specifically, 90% of Etsy's value at this point is in the market of buyers they have slowly marketed and engaged and cultivated brand recognition with over decades — and those buyers are people looking for low-volume goods. They don't want to buy high-volume goods from Etsy. That's not the association they've been painstakingly educated to have. If Etsy wanted to get into Amazon's business, they'd have to create a new brand to do it with, because that's just not the business that people associate with the Etsy brand. And that would mean starting from scratch.
- hinkley 2y ago
  If you sell your goods at fairs or cons it’s not uncommon for the site to go dark for a few days while they haul all their goods to man a booth. Anything that doesn’t sell goes back up.
  - derefr 2y ago
    Since it is by definition a low (sales) volume process, you'd only need to keep one or two of each thing in stock at the Etsy fulfillment center. Items in stores run on "tight logistics" would just have their items constantly going in and out of stock as they alternate between 0–2 copies in stock at the warehouse. Of course, if things were constantly going out of stock, then you'd want to create a system to allow people to put down a hold on their card to reserve a copy of something, waiting in a virtual line to be the first to get it when it does come back in stock. (Which would actually work much better than Etsy does today, as it would give makers the ability to know how many of each thing to target making as a batch to attempt to satisfy upcoming demand — without money already captured forcing them to work to a potentially-impossible deadline.)
    - hinkley 2y ago
      I think you might be overestimating the throughput of hand crafts. 1-2 items in escrow could be more than 20% of their expected sales at an in person event. I’m sure it would work better for people who don’t do fairs, but we have decent farmer’s markets in my area and there’s a good number of artists who sell on Etsy or similar in addition to touring the regional in person events.
- deleted 2y ago
  [deleted]
- marcinzm 2y ago
  > Re: fulfillment — why not ask Etsy sellers to pre-stock everything that's not made-to-order into fulfillment centers like Amazon's? And, in fact, to send anything that is made-to-order to a fulfillment center first, where it'll be inspected, re-wrapped and re-shipped by the fulfillment center — with the buyer's card only having a hold, not a charge, on it until the seller's goods are inspected by the fulfillment center as good? (In other words: turn the process into a goods-for-money mediated escrow.) Because that costs money and most Etsy sellers sell very few things. We're not talking thousands or hundreds or even dozens per months. We're talking single digits per month. Per store. Not per item. With 7 million stores. > Re: quality / drop-shipping — I feel like a lot of this could by solved just through simple semi-automated verification. Require for a product to be listed, for the seller to upload a video of themselves making the thing. Then pass those videos to MTurk workers to evaluate them for tricks. See the previous point. No one would use Etsy if they had to make a whole video and go through an automated process for an item that might sell once per year. edit: Amazon sells something like 350m products including the marketplace and 12 million directly. Etsy sells over 100m. Amazon has 40x the sales revenue. The economists are so different between them it's not even the same universe.
irq-1 2y ago
Etsy should charge the sellers fees per sale, and make them post an expensive bond. Then Etsy can ban drop shipping, give instant refunds, pay return postage, and generally hold the creators to high standards. Etsy should also mandate the inclusion of a scan code in the package, which the customer can use to show they received the shipment but it wasn't as advertised. This would catch people lying about the contents, when the creators take a photo of the item & code in the box (and send it to Etsy before shipping.) Creators taking a photo and then changing the item will be caught because of the number of complaints, and customers can be refunded long after the transactions using the bond.
- iLoveOncall 2y ago
  This would be a minor inconvenience for drop shippers but kill small businesses by drowning them in fees and paperwork. Etsy already charges fees, even just to LIST items, regardless of whether they sell or not. I've been wanting to sell some of my 3D printed designs, but I'm not paying a buck a piece for a listing that will earn me 5 to 10 bucks if I manage to sell.
  - alwillis 2y ago
    > I've been wanting to sell some of my 3D printed designs, but I'm not paying a buck a piece for a listing that will earn me 5 to 10 bucks if I manage to sell. The listing fee on Etsy is 20¢ ($0.20).
    - iLoveOncall 2y ago
      In the UK it's more if I remember correctly, and this is only the basic fee which doesn't offer all the functionalities.
      - marcinzm 2y ago
        That's not true. https://help.etsy.com/hc/en-us/articles/115014483627-What-are-the-Fees-and-Taxes-for-Selling-on-Etsy?segment=selling https://help.etsy.com/hc/en-us/articles/115014483627-What-ar...
tensor 2y ago
Shopify did very well connecting small makers/vendors to customers. Granted, to your point they are now trying to go for big vendors, thinking they can somehow unseat amazon. Probably won't work out well for them either.
- Sabinus 2y ago
  Shopify last year gated a lot of customisation functionality behind a 2.5k a month subscription. They certainly are pivoting away from small shops.
- actionfromafar 2y ago
  If Shopify can avoid beating themselves up against the behemoth that is Amazon in a full-frontal assault, while also stay less crappy than Amazon, I think Shopify is on to something. Amazon can't un-crappify themselves, it's not in their DNA.
- crabmusket 2y ago
  Shopify is not a marketplace, is it? When I want to buy something I don't go to shopify.com and search for it. I think this is a critical distinction.
  - fire_lake 2y ago
    You’re right, but Shopify is trying to change this with the Shop app
Blackthorn 2y ago
Yeah it sucks so much that Etsy continuously buys and shuts down competitors that create new ones...
lll-o-lll 2y ago
Why not go the Uber route. Both the seller and buyer get rated for each interaction. Enforce a little bio about the seller. Then a small maker can quickly establish a good reputation, and cautious buyers can only buy from such, while more adventurous might take a punt on someone new. The open market needs information to be efficient; it looks like lack of reliable information is the root of this.
- toast0 2y ago
  And then once you've established a good reputation, you can do some high volume dropshipping.
  - lll-o-lll 2y ago
    Hmmm, perhaps I am too naive to the devious nature of humans.

marcinzm 2y ago

> and nothing to stop them Except Ebay and Amazon already existing.

gunapologist99 2y ago
And Amazon having rather high fees. Jeff Bezos used to say, "Your margin is my opportunity", but I'm not sure he even cares anymore.

derefr 2y ago

> intractable problems with quality and fulfillment • Re: fulfillment — why not ask Etsy sellers to pre-stock everything that's not made-to-order into fulfillment centers like Amazon's? And, in fact, to send anything that is made-to-order to a fulfillment center first, where it'll be inspected, re-wrapped and re-shipped by the fulfillment center — with the buyer's card only having a hold, not a charge, on it until the seller's goods are inspected by the fulfillment center as good? (In other words: turn the process into a goods-for-money mediated escrow.) • Re: quality / drop-shipping — I feel like a lot of this could by solved just through simple semi-automated verification. Require for a product to be listed, for the seller to upload a video of themselves making the thing. Then pass those videos to MTurk workers to evaluate them for tricks. > Etsy has every reason in the world to want to get away from small sellers and move to high volume manufacturers Except that... that's their whole niche. Specifically, 90% of Etsy's value at this point is in the market of buyers they have slowly marketed and engaged and cultivated brand recognition with over decades — and those buyers are people looking for low-volume goods. They don't want to buy high-volume goods from Etsy. That's not the association they've been painstakingly educated to have. If Etsy wanted to get into Amazon's business, they'd have to create a new brand to do it with, because that's just not the business that people associate with the Etsy brand. And that would mean starting from scratch.

hinkley 2y ago
If you sell your goods at fairs or cons it’s not uncommon for the site to go dark for a few days while they haul all their goods to man a booth. Anything that doesn’t sell goes back up.
- derefr 2y ago
  Since it is by definition a low (sales) volume process, you'd only need to keep one or two of each thing in stock at the Etsy fulfillment center. Items in stores run on "tight logistics" would just have their items constantly going in and out of stock as they alternate between 0–2 copies in stock at the warehouse. Of course, if things were constantly going out of stock, then you'd want to create a system to allow people to put down a hold on their card to reserve a copy of something, waiting in a virtual line to be the first to get it when it does come back in stock. (Which would actually work much better than Etsy does today, as it would give makers the ability to know how many of each thing to target making as a batch to attempt to satisfy upcoming demand — without money already captured forcing them to work to a potentially-impossible deadline.)
  - hinkley 2y ago
    I think you might be overestimating the throughput of hand crafts. 1-2 items in escrow could be more than 20% of their expected sales at an in person event. I’m sure it would work better for people who don’t do fairs, but we have decent farmer’s markets in my area and there’s a good number of artists who sell on Etsy or similar in addition to touring the regional in person events.
deleted 2y ago
[deleted]
marcinzm 2y ago
> Re: fulfillment — why not ask Etsy sellers to pre-stock everything that's not made-to-order into fulfillment centers like Amazon's? And, in fact, to send anything that is made-to-order to a fulfillment center first, where it'll be inspected, re-wrapped and re-shipped by the fulfillment center — with the buyer's card only having a hold, not a charge, on it until the seller's goods are inspected by the fulfillment center as good? (In other words: turn the process into a goods-for-money mediated escrow.) Because that costs money and most Etsy sellers sell very few things. We're not talking thousands or hundreds or even dozens per months. We're talking single digits per month. Per store. Not per item. With 7 million stores. > Re: quality / drop-shipping — I feel like a lot of this could by solved just through simple semi-automated verification. Require for a product to be listed, for the seller to upload a video of themselves making the thing. Then pass those videos to MTurk workers to evaluate them for tricks. See the previous point. No one would use Etsy if they had to make a whole video and go through an automated process for an item that might sell once per year. edit: Amazon sells something like 350m products including the marketplace and 12 million directly. Etsy sells over 100m. Amazon has 40x the sales revenue. The economists are so different between them it's not even the same universe.

irq-1 2y ago

Etsy should charge the sellers fees per sale, and make them post an expensive bond. Then Etsy can ban drop shipping, give instant refunds, pay return postage, and generally hold the creators to high standards. Etsy should also mandate the inclusion of a scan code in the package, which the customer can use to show they received the shipment but it wasn't as advertised. This would catch people lying about the contents, when the creators take a photo of the item & code in the box (and send it to Etsy before shipping.) Creators taking a photo and then changing the item will be caught because of the number of complaints, and customers can be refunded long after the transactions using the bond.

iLoveOncall 2y ago
This would be a minor inconvenience for drop shippers but kill small businesses by drowning them in fees and paperwork. Etsy already charges fees, even just to LIST items, regardless of whether they sell or not. I've been wanting to sell some of my 3D printed designs, but I'm not paying a buck a piece for a listing that will earn me 5 to 10 bucks if I manage to sell.
- alwillis 2y ago
  > I've been wanting to sell some of my 3D printed designs, but I'm not paying a buck a piece for a listing that will earn me 5 to 10 bucks if I manage to sell. The listing fee on Etsy is 20¢ ($0.20).
  - iLoveOncall 2y ago
    In the UK it's more if I remember correctly, and this is only the basic fee which doesn't offer all the functionalities.
    - marcinzm 2y ago
      That's not true. https://help.etsy.com/hc/en-us/articles/115014483627-What-are-the-Fees-and-Taxes-for-Selling-on-Etsy?segment=selling https://help.etsy.com/hc/en-us/articles/115014483627-What-ar...

tensor 2y ago

Shopify did very well connecting small makers/vendors to customers. Granted, to your point they are now trying to go for big vendors, thinking they can somehow unseat amazon. Probably won't work out well for them either.

Sabinus 2y ago
Shopify last year gated a lot of customisation functionality behind a 2.5k a month subscription. They certainly are pivoting away from small shops.
actionfromafar 2y ago
If Shopify can avoid beating themselves up against the behemoth that is Amazon in a full-frontal assault, while also stay less crappy than Amazon, I think Shopify is on to something. Amazon can't un-crappify themselves, it's not in their DNA.
crabmusket 2y ago
Shopify is not a marketplace, is it? When I want to buy something I don't go to shopify.com and search for it. I think this is a critical distinction.
- fire_lake 2y ago
  You’re right, but Shopify is trying to change this with the Shop app

Blackthorn 2y ago

Yeah it sucks so much that Etsy continuously buys and shuts down competitors that create new ones...

lll-o-lll 2y ago

Why not go the Uber route. Both the seller and buyer get rated for each interaction. Enforce a little bio about the seller. Then a small maker can quickly establish a good reputation, and cautious buyers can only buy from such, while more adventurous might take a punt on someone new. The open market needs information to be efficient; it looks like lack of reliable information is the root of this.

toast0 2y ago
And then once you've established a good reputation, you can do some high volume dropshipping.
- lll-o-lll 2y ago
  Hmmm, perhaps I am too naive to the devious nature of humans.