The Indie Sellers Guild, which formed out of last year's Etsy Seller Strike, has issued a press release calling on Etsy to consider the policy changes and enforcement will have on legitimate sellers as the platform responds to a recent Citron Research report exposing the extent of counterfeit and trademark infringing goods sold through the site.
Etsy’s counterfeit problem poses risks for sellers, buyers and investors alike
The recent report by Citron Research exposing the extent of counterfeit items sold on Etsy.com comes as no surprise to the Indie Sellers Guild (ISG), a nonprofit that advocates for online creative indie sellers with thousands of members in over fifteen countries.
[Feb. 21, 2023] The February 16th report alleges that Etsy has become one of the largest online markets for counterfeit and trademark-infringing goods in the world. Citron reports that “it is obvious that management has not done enough to control this problem,” and that Etsy’s advertising programs are “not only allowing the behavior but encouraging it and promoting it”.
The ISG has been sounding the alarm about this issue for over a year. In a 2022 petition that gained over 86,000 signatures, the ISG noted that “Etsy looks the other way on resellers who undercut authentic makers by peddling sweatshop-produced junk in clear violation of the spirit of the Etsy community.” The petition demanded Etsy issue a comprehensive plan to address the issue. As that demand continues to go unanswered, the problem continues to compound.
Despite promises made by Etsy in 2022 that “This year we’ll expand our efforts to remove listings that don't meet our policies and help you resolve issues with buyers”, this report demonstrates that current efforts are ineffective, and continue to hurt not only buyers and sellers but shareholders as well. Etsy made similar promises in 2018. Yet while clearly the problems persist, the compensation to Etsy's top three executives has increased by 1300% from 2018-2021.
As Etsy responds to issues raised in the Citron report, they must consider how any policy changes and enforcement will affect legitimate sellers on the platform. An ineffective response has the potential to further damage the marketplace by driving away legitimate sellers while still letting the biggest offenders slip through the cracks.
Etsy sellers and the ISG know this all too well the problems facing Etsy. In response to this and other issues affecting the industry, the ISG is conducting research to assess specifically what creative indie sellers need and want from an e-commerce platform. Included in the research is an international survey of e-commerce sellers and buyers and a forthcoming in-depth analysis of the results.
The ISG looks forward to sharing the results of our study with Etsy leadership, as well as other marketplaces for the benefit of sellers, buyers, investors and owners alike.
If Etsy is now ready to take a different path by working alongside sellers and putting our collective experience and creativity to work in solving the platform’s most pressing issues together, the ISG is ready to get to work.
The Citron Research report blasted Etsy for being "the largest organized clearing house for counterfeit goods in the world while not only allowing the behavior but encouraging it and promoting it by selling placement and status to the millions of sites that regularly violate copyright laws."
I wholeheartedly agree that if Etsy really wants to tackle the counterfeit and infringing items problem head-on, their best bet would be to engage in good faith with legitimate sellers to make sure that any policy changes and enforcement procedures don't throw the baby out with the bathwater.