A year after their initial public offering, Etsy’s outcome is anything but cozy.
The company has its knitting needles crossed over the idea of authenticity.
The lack of which is driving investors away due to consumer uncertainty.
Similar to the craft-brewery industry, Etsy needs to update its code of conduct to prevent artisans from mass-producing products.
Both beer and stationary need individual attention to be considered craft.
The website loses credibility every time one of their vendors are found to be peddling products.
It’s up to administrators and users to ferret out fakes and ban them from the site.
Etsy’s financial success depends on their authenticity.
If they can’t correct these ongoing violations, investors will continue to drop the company.
In April of last year, Etsy’s starting price was $16, peaked at $32, but dropped to $16 during the first month of trading, according to CNBC and Fortune.
Handmade is a big deal. The New York Times Magazine wrote a piece of the birth and development of Etsy.
Like an adolescent, not all the growth has been smooth.
NY Mag reported a previous Etsy shop called Ecologica Malibu was selling handmade Brazilian-style furniture.
Customers realized the shop shared an address with wholesalers that import furniture from Malaysia.
The comment storm that followed was enough for the shop to close its doors and for a popular blog “Regretsy” to be launched.
But the line between handmade and hired help can be slim.
The New York Times reports another Etsy shop owner, Alicia Shaffer, has so far straddled that line.
She has one of the most popular storefronts and employs 25 local seamstresses and photographers to keep up with the orders.
If Etsy hopes to keep its stock afloat, it needs more Alicia Shaffers and fewer Ecologica Malibus.
Etsy should enact a tiered quality assurance policy.
As store fronts become more profitable and take more orders they should also be more transparent.
Similar to corporations that must report their financial statements and quarterly reports, these storefronts should be checked on by the Etsy administrators.
Some ways they could fight against mass production would be to require sourcing receipts, pay slips for people on their payroll or filling out questionnaires.
These measures would give consumers the assurance their products were handmade.
Etsy has a limited amount of time to make changes.
In a capitalist market, brand image and market share are king.
Last year, Amazon launched Handmade, an answer to the outcry of angered Etsy customers, according to a Wired article.
Although the launch has been moderate at best, it still serves as a challenger to Etsy. Martha Stewart, the original Queen of DIY, has all of her products on Handmade.
In a battle of knitting needles and stock tickers, there’s still many knots to unravel.
wkiepura@indiana.edu
@wkiepura
