Saturday, March 28, 2015

"From Etsy to Sweatsy"

"How a handmade mecca went from part of a movement to part of the problem."

In the above link, April Winchell, author of Regretsy: Where DIY meets WTF, and formerly of the website by the same name (may it rest in peace), discusses Etsy's fall from grace, its IPO announcement, and illustrates its journey from Main Street to Wall Street.

Hey, boys and girls, do you know how to spell "sellout?"

[Children together]

Very good!


Apparently this topic needs to be revisited.  There seems to be a lot of confusion surrounding peoples’ displeasure with the metamorphosis of Etsy Inc.  In fact, instead of trying to educate themselves on exactly why certain business owners are disturbed by Etsy’s practices, we see the Etsy Apologists in full force, diminishing the concerns of said business owners, and likening their disagreement with Etsy’s direction to that of  a lovers’ quarrel.  To me, this is not only rude, but an irresponsible use of your voice, not to mention unoriginal.  Regurgitating something you read on a forum or in a comment section that someone else said, once, more than half a decade ago makes you neither clever, nor informed.  If you are at all interested in why people are unhappy, by all means, ask them.  They will tell you, most are not shy.  In fact, that's how I became aware of the many hypocrisies, and double standards, or no standards at all in some circumstances, that have become commonplace in doing business with Etsy.  I couldn’t understand why anyone would be upset with a company that provided an inexpensive platform to open a storefront, and sell wares from, and then I bothered to listen to what was happening to individual store owners, and the struggles they were facing, and how or why those struggles, and concerns may impact business, and business owners alike, in the future by continuing to align themselves with Etsy Inc.

Recently, Etsy Inc. announced its IPO … a logical step for any business growing at a rate becoming difficult to sustain with its 300+  private investors.  But, is that really what’s going on here?  When you see Etsy has been operating at a loss since 2012, culminating in a 15.24 million USD loss in 2014 alone, is this the unsustainable growth everyone is talking about?  Couple this with the email Etsy itself sent out to business owners illustrating, among other things, two glaring, in-house, failures:
    1) A lack of adequate procedures and controls to appropriately account for certain
     non-income tax-related expenses and comply with the related filing requirements.

     2) And a lack of adequate cut-off procedures to ensure the timely recording of   
     certain period-end accruals.

More growth?  This screams utter incompetence spearheaded by lackluster leadership, to me.  Let me put it another way, a company employing past and present personnel who patronize, and treat many business owners like stereotypical brain-dead, "bored housewives" incapable of anything beyond kitchen table crafting can’t keep their own books straight, and pay their own taxes; the very things we as business owners must do ourselves. Laughable doesn’t even begin to describe this.  I don’t know about the rest of you sole-proprietors out there, but I report both to the state, and federal level, and have to keep immaculate records, because running a business is more than doodling cute pictures in a notebook whilst your boss delivers another rah-rah speech, and calling yourself a “tastemaker,” there’s actual work behind it.  While people are trying to sell this as just a way for a company to keep up with the demands of skyrocketing growth, what we’re really looking at here is nothing more than a bailout, one in fact, so large that its original investors couldn’t, or wouldn’t support a company already proving its inability to carry out a very basic level of office administration. 

So, while people get hung-up arguing whether there’s a difference between a company with 300+ private investors, or countless public shareholders, with both models typically having a board of directors to answer to anyway, they are really missing the point when they’re solely focusing on the argument from the financial mindset, which actually happens to be immaterial for a lot of people who are less than pleased with this move.  To me, there is quite a difference between a few hundred private investors, and a publicly traded company, if we disagree on this point, that’s fine, but you must understand that this one single decision is not what is causing many, if not most, people to label Etsy Inc. as a “sellout.”  It is, however, seen by some as the point of no return in a long list of moves made by Etsy that further removes us from the resolution, and elimination of long ignored problems. 

Let’s consult shall we?


1.  an act or instance of selling out.

2.  an entertainment, as a show or athletic event, for which all the seats are sold.

3.  Informal. a person who betrays a cause, organization, or the like; traitor.

4.  Informal. a person who compromises his or her personal values, integrity, talent, or the like, for money or personal advancement.

The disgust for this company does not come from people not wanting Etsy Inc. to grow, and make more money, or a lack of understanding what an IPO is.  It is the complete abandonment of the original mission statement, and ideals on which this company was founded, painstakingly built, and marketed through the hard work of like-minded sellers, as well as the overwhelming inadequacies of the Brooklyn offices, on top of shady, bait & switch type behavior, lack of ethics, and murky, at best, “transparency” that seems to have become standard practice at headquarters.  Together with the disrespectful attitudes shown toward business owners from employees of Etsy Inc. oftentimes including, but not limited to its very own CEO, is what is making longtime account holders gag.

The truth of the matter is, a great many of the business owners on, who by the way typically come with highly educated, and / or specialized backgrounds, never actually needed Etsy, they wanted Etsy because they believed in creating a marketplace that meant something beyond a grubby cash-grab.

Rob Kalin, Founder of Etsy:
Rokali 4:26 pm Mar 3, 2007 EST
Etsy is an online marketplace for buying and selling all things handmade. Etsy is built by artists, for artists -- and for customers conscious of the true value of handmade goods and their creators.
Etsy's marketplace is a community. At the heart of every transaction is a direct relationship between the maker and the buyer.
We, the members of this community, join together to earn a living from what we make and to support those who make things. Our vision is to build a new economy and present a better choice: Buy Handmade. Cradled in our community, our intention is to support the independent artist and create viable alternatives to mass-produced objects in the world's marketplace.
With the Industrial Revolution we lost the connection between producer and consumer; we no longer know who makes our daily bread, our clothes or our furniture.
We are using the Web to reconnect: to once again allow the producer and the consumer to know each other; to swing the pendulum back to a time when we bought our bread from the baker, food from the grocer, and shoes from the cobbler. Through the forging of friendships and with a commitment to hard work, our community and our cause will prosper.
Was Etsy going to change the world?  Probably not, but it was definitely having an impact on the face of e-commerce as we know it.  Taking us out of the big box stores, or strip malls of yesteryear, and putting consumers, and creators together forming symbiotic relationships, the likes of which are rarely seen in commerce, and retail.  A place where people (creators, manufacturers, producers, tradesmen, etc.) were not exploited, and consumers were not duped out of their hard earned coin.  This can no longer be said with any sort of confidence about Etsy.  “Buyer Beware” should always be at the forefront of all purchases, let alone online shopping, no matter how socially conscious a company may seem, because none of us (person, or business) is infallible, however, while Etsy eagerly changes its mission statement, to remove the handmade sentiment, more often than most people change their socks, yet riding on the coattails of the reputation created by the community of artists, artisans, and suppliers believing and adhering to the original message, with Etsy still trying to white-knuckle its shaky B Corp status (that has been under fire from the start, anyway), you can see where things get a little confusing for the consumer.  To be fair, there are many consumers who just don’t care where their goods come from at all, whether by ignorance, or lack of interest.  Others, however, do care, and therein lies the rub for those who are sick of the status quo when it comes to commerce, which has always consisted of slave labor, child labor, exploitation, human rights violations, and ecologically irresponsible practices (just to name a few), of one degree or another.  Etsy was an opportunity to change that, but instead of focusing on closing the gaps, and stitching up loopholes within the Etsy community that were allowing people to collapse the integrity of the platform by selling mass produced, factory manufactured goods (spanning the ethical and humane spectrum with no noticeable controls in place) they allowed these storefronts to chip away at the very foundation on which Etsy was built.  With this major flaw in the framework, once Etsy conceded to allow business owners to partner with “vetted” manufacturers, suppliers, and factories many saw this as only exacerbating an already uncontrollable problem into what we see on the site now as a catch-me-if-you-can scenario, with sweatshop materials flooding the marketplace at an alarming rate, and what I see becoming an even more intensified problem thanks in part to the decision to take Etsy Inc. public, because in doing so, the focus is geared toward creating value for shareholders, which I believe will decrease the desire to eliminate stores abusing these weaknesses Etsy is already known for.  So, when I hear the phrase, “They’re treating Etsy like a boyfriend who broke their hearts,” being applied to business owners who find themselves at a crossroads with a company known for abandoning its core ideals whenever it’s convenient, and redefining buzzwords in order to spit-polish its rapidly tarnishing reputation, and keep itself relevant, I am beyond baffled as to how anyone could possibly be so out of touch. 

It’s not about broken hearts, or broken promises.  It’s about a little something called The Universal Declaration of Human Rights, that one or two of us around the world still believes is important.  It’s about putting people FIRST, and "things" further down the list.  It’s about making money without losing your soul in the process.  It’s about recognizing that a true global community is not about disenfranchised “others” living the life of peasants in order to serve, and supply our gluttonous demands for all the cheap, glorious, disposable JUNK we fill our surroundings with, and call “living,” while we keep telling the lie that poverty is the product of laziness, and nothing else. 

No.  I don't have a broken heart.  I have a sick stomach because, beyond my education in apparel, and textile design, merchandising, manufacturing, business, and international trade, I actually do look beyond the catchy headlines to uncover truth in order to stay abreast of what's happening in our world, and understand that unbelievable prices come from unbelievable working, and living conditions.

 The True Cost

Bottom line: What are you comfortable investing in?

Post Update: June 20, 2015
In the wake of plummeting stock prices ($14.31 down from $30 per share), Etsy announced June 16, 2015 that it will now enter into beta testing its very own version of crowdfunding called, Fund on Etsy.  Playing with the idea of crowd-sourcing for money without cracking down on store owners already abusing Etsy's next to non-existent enforcement of the use of non-vetted factories? What could possibly go wrong?

I mean, it's still "handmade," right???