How Etsy’s Become Threatened By Scams + Knockoffs—And What It’s Doing About It

The whole thing started with a flamingo-print zip pouch—the first item ever sold on Etsy, back in 2005. Just two years later, 450,000 sellers were registered on the site (along with a flamboyance of animal-print pouches, we’re sure), creating a robust marketplace of makers and crafters that set the site apart from other online retailers like eBay and Amazon. Need a knit emotional support pickle? Or a Pedro Pascal–scented candle? A felt Falkor dragon from The Neverending Story? Etsy has long been a marketplace for niche, one-of-a-kind items.

Today, the platform is home to 7 million sellers and an array of crafted goods ranging from heirloom quality to irreverent and fun. To meet Etsy’s own creativity standards, an item must be made, designed, hand-picked or sourced by the seller. It’s all outlined in the “House Rules” that help Etsy maintain its standards. Currently, there are more than 100 million items for sale on the site—that’s a lot of listings to make sure meet the criteria.

“We have really amped up our trust and safety team to have even more of a keen eye on what is being listed on Etsy,” says Dayna Isom Johnson, the platform’s trend expert. “To ensure that our shoppers have a safe destination to come to.” In the past year, she explains, Etsy “removed about 115 per cent more listings that violate our policies.”

The site’s recent focus on trust and safety may be in response to growing concerns that Etsy has been infiltrated by knockoffs and scams. One such scam is “dropshipping,” where a seller buys an item overseas (from a site like Chinese wholesaler AliExpress) and has the retailer deliver the product directly to the customer. “Keep commerce human” is Etsy’s mission, but practices like these—that often involve ripping off a legitimate seller’s designs—introduce faceless, address-less scammers to a marketplace that prides itself on its human touch.

Back in 2019, Montreal-based ceramic artist Kness used Etsy to launch her online store, which is stocked with handmade animal figurines. “I joined Etsy as a way to test my market,” she says. Before that she was a web marketing consultant and needed a platform to start selling her art. Etsy seemed to fit the bill but, less than a year later, she quit Etsy and decided to sell on her own website instead.

“My sales were going up, and I was seeing my Etsy bills go up, too. But it was a lot more Etsy fees than it used to be. I was also checking my traffic, because I was a web marketer before.” Upon inspection, Kness found that the majority of her shop’s traffic came from her own social media accounts and website. “I was bringing my own traffic to Etsy.”

Kness decided to dig a little deeper by testing keywords, and was surprised by what stores popped up next to hers in the site’s search results. “The competition seemed a little bit unfair,” she says. “I was put on the same page as Chinese mass-produced stuff, while Etsy advertises selling from makers and artists.” That realization coupled with the fee structure influenced her decision to quit Etsy.

Listing an item on Etsy requires just 20 cents per item and, if it sells, the platform takes a 6.5 per cent transaction fee. But, as Isom Johnson explains, that money goes somewhere: “You have access to all of the tools on the backend for us to really help you amp up your business. Not only do we offer you the platform for you to have your items seen … but we also have incredible tools to help you grow your business.”

Melanie Gordon is the owner of Etsy shop Mood + Mantle, where she sells her handcrafted quilts and quilted art. She has been selling on Etsy since 2021 and appreciates that the shoppers who peruse the site are already in the market for unique and handmade items, so the traffic is targeted. “Etsy provided a huge audience that I did not feel confident I could immediately build on my own,” she says. “Now my artwork has reached so many people around the world.”

Isom Johnson agrees. “As we consider the state of the world and the amount of generic and commoditized items that are out there. Etsy sets itself apart from those traditional retailers, not only with the human connection, but also with the type of items.”

These days, finding the cream of the crop—and avoiding knockoffs—while perusing Etsy’s 100 million listings takes a little know-how. Isom Johnson is eager to share her suggestions, which include following Etsy’s social channels, perusing the editors’ picks and striking up conversation with sellers.

To really separate the sellers from the scammers, keep an eye out for badges. Spot that little sticker and “that’s when you can really shop with confidence,” she says. “That means that they are hand selected by someone like myself … we’ve spoken to the seller, we know that they follow the guidelines.” She adds that, when you’re searching for an item, you can even filter by badge, so you’re only combing through tried-and-true listings.

For many, Etsy is still the destination for handcrafted items. But only those who cast their net wider will find sellers like Kness, who found more success off the site than on it. “The platform changed a lot,” she says. “It’s now more dropshipping than true artists, and it’s sad. I still buy on Etsy for some Canadian artists, but it’s tough to buy something that’s not made in China.”

“We really have the ability to now have a real microscope on this, to make sure, again, that things are following the policy guidelines to ensure a safe place for our customers to shop,” Isom Johnson insists. “We empower our shopping community to flag these items if they’re not aligned with our policy.” And she really does encourage shoppers to take action. “If you engage with something that you don’t think … meet[s] the guidelines of what should or shouldn’t be on Etsy, there’s a little flag button on each listing, so you can flag it and it will go directly to our trust and safety team to see if it is, in fact, going against our policies.” —Jill von Sprecken