Etsy Wholesale, Etsy policies for sellers, retail value requirements, sales methods rationalization, Etsy community feedback and other related issues.
We mainly know Etsy as an online e-commerce platform for different artisans, designers, and other creative entrepreneurs. Since its launch back in 2005, mostly thanks to their strict policy, it has become more than just another selling platform for fancy stuff. It is now a vast community with millions of members (1.7 m sellers, 28.6 m buyers and nearly 60 m members in total). And they all are driven by one idea: to create unique things, things “with history”.
But with steadily growing demand, a lot of Etsy sellers found themselves in a tricky situation. The necessity to satisfy this demand met up with strict Etsy policies and principles. Those principles are related towards goods themselves and production process of those as well.
Etsy appeared to be a place where brick-and-mortar business owners were searching for items which they could resell. Huge retail companies were looking for promising designers and artisans to hire, here. The idea was floating in the air and guys from Etsy just had to meet up these expectations, so they launched Etsy wholesale in 2014.
The idea of wholesaling “unique and authentic” items seemed quite controversial. Even more – wholesaling and all values which Etsy had been declaring before did not stick together at all. However, is it the same now, in 2017?
What is Etsy wholesale all about
From its humble beginning as a small startup, Etsy has evolved into a giant. Racking up close to $2 billion in sales in 2014 and almost single-handedly launching the “artisans revolution”. Sure thing their sellers were growing alongside with them. When Etsy released its wholesale segment out of beta in August 2014 as the separate and enclosed marketplace, there was a huge hype about it.
Some people argued about “lost values” and “blurring the concept of handmade” and eventually left. But a lot of sellers saw the actual possibility to finally expand their business alongside with already established brand! And, what is even more important, on the platform which they are already used to and love.
Etsy Wholesale is a private marketplace, which means you have to apply both to sell and to buy there. You can’t get there unless you are an accepted seller or an accepted buyer. Both sellers and buyers have to meet the requirements for Etsy Wholesale. Both criteria are pretty much understandable.
Sellers have to offer wholesale prices 50% (or less) of the suggested retail value. This value mainly comes from retail prices in your Etsy shop.
Sales made through Etsy Wholesale will incur a 3.5% transaction fee paid to Etsy. A seller has to prove that he is capable of providing the demand, in other words, his readiness for wholesale. Also, Etsy somehow has to assure itself that your products meet expectations of Etsy policies towards goods.
So the best case scenario is to have already established shop on Etsy platform or to get yourself one. And in the end, a seller has to pay the one-time joining fee of 100$. There is also a different fee structure (and bigger fee of 10%) when working with larger retail partners of Etsy (such as Macy’s, Whole Foods, etc.)
Pretty strict criteria, aren’t those? But that is the price for getting to the market of nearly 20 000 retailers who buy products for their stores at Etsy Wholesale! And here is what selling wholesale can help you with furthermore:
- Gets your items to the public, to the huge audience of shoppers, which builds your brand recognition;
- Provides you with a constant flow of decent, more lucrative orders, on the contrary to the unpredictable retail sales;
- Motivates you to re-evaluate and rationalize your production methods;
Buyers (or retailers), on the contrary, have to prove that they are representatives of an independent retail business and are authorized to enter into agreements on behalf of that business. They have to provide a valid Resale Tax ID number, VAT, BN, or ABN for their business.
Whom was it meant for?
From its very beginning, Etsy was pushing its motto “Quit your day job”, which meant: leave your routine job and make the things you like and sell them to the people who will like them as well. And with launching Etsy Wholesale this idea was never so close becoming an actual reality for lots of people. But this platform is a great opportunity not only for artisans, artists and designers. For retailers, it is a “honeypot” as well. So let’s get closer to it one by one.
From a prelaunch statistics (2013) Etsy found out that 18 percent of Etsy sellers in the U.S. are running their creative businesses full time. A sizable number of them rely on Etsy sales for supplemental income. Furthermore, according to those statistics, 74 percent of U.S. sellers engaged with their Etsy shops as with their “businesses”. And it does not depend on the size of their shop or how long they’ve been selling.
And 91 percent are willing to grow their sales in the future. For that time Etsy Wholesale was undergoing beta-testing with actual sellers, so guys in Etsy knew that they were on the right way. Knowing that 18 percent of 54 million (for 2014) army of sellers already requires further, let’s just say, enlargement. And 91 percent are willing to amplify their sales, it was a great sign for launching a wholesale segment.
Along with the release, Etsy claimed to redefine its meaning of word “handmade” to facilitate the policies towards wholesaling. A lot of people saw it as a great opportunity to start a real full-time business on Etsy wholesale. But making a step from fulfilling individual customer orders on Etsy to managing enormous bulk orders for large retailers is often expensive. For small business people, the learning curve during this process is steep. So from its side, Etsy provided online courses and even a personal “Wholesale advisor” for sellers to help them smoothly step into the world of wholesaling.
Nevertheless, it’s a transition which, Etsy is hoping, a lot of its sellers will make. More than 2,500 sellers have signed up for Etsy wholesale on its start. And according to Etsy’s pre-IPO filing, as of December 31, 2013, the company had more than 6,500 local boutiques signed up as buyers for the platform. Nowadays, in 2017, this number reached 20000 unique retailers including such giants as Nordstrom, Whole Foods, Macy’s, Paper Source etc.
That is a long time and pretty understandable practice that retailers are looking for items from promising designers, artisans and artists or even for themselves on Etsy. With the Etsy Wholesale, this possibility is now as easy as possible. Retailers may simply choose from the listed goods, order them in bulk directly from sellers. After they just resell those in their own brick-and-mortar shop, it is simple as that. Everyone gets what he wants.
Impact on Etsy community
In 2013 Chad Dickerson (Etsy CEO) announced that Etsy would then allow factory-made items and drop shipping. But only if a seller either designed or hired designers of those items, admits in using factories. Thus taking “ownership” of the process and providing Etsy with information about the factory which services they’ve been using. Later on, Etsy declared that the previously installed meaning of the term “handmade” should be a little reconsidered to allow factory made goods.
Discussions about the Etsy’ dilemma of sacrificing its principles for a bigger income broke out. A lot of people accused Etsy in betraying the ideology of handmade craftsmanship, authenticity, and unicity, giving up on everything that Etsy have declared to be. But was it? Wasn’t it just a step up for the sake of all sellers?
First, as previously mentioned, Etsy Wholesale is a separate and closed section of Etsy itself. Only approved sellers and retailers can do business over there. So regular Etsy users weren’t impacted nearly at all. Their clients weren’t stolen by Wholesale members, as those weren’t buying stuff from regular members in bulk anyway.
Second, some of the businesses were steadily growing, though eventually, were meeting Etsy policy limitations. So those sellers, willingly or not, had to leave Etsy for their own sites or other e-commerce platforms. In most cases, it was costly for those people, as they had to carry a burden of marketing and logistics on their own. And as for Etsy, it was, obviously, unacceptable.
And at last, there can be an analogy with a regular brick-and-mortar shop. If you max out your possibilities, feel confident about achieving something, why not consider expanding your business and building up a new store? The same goes not only with people but with Etsy too. This wasn’t a step from declared values, but a step up towards new horizons.
And what about sellers themselves?
Transitioning from one-man scale manufacturers/sellers to a small batch manufacturers for mortar-and-brick vendors wasn’t so smooth and profitable. Some sellers couldn’t adjust their business for a wholesale model, some overestimated their capabilities and some just haven’t found their niche. But luckily there are success stories like the story of Casie from “BeBe Babies and Friends”. As she said:
“Etsy Wholesale has been what I consider a giant success for me. Since starting about a month ago I have completed 4 wholesale orders. I am averaging about one a week. This is huge for me…”
She applied for Etsy Wholesale from the very beginning and succeeded almost immediately. All thanks to her overwhelming output, her will to enhance the marketing attractiveness of items she makes. She adapted to the demands of retailers and managed to put a particle of herself in what she was creating. Casie is also noticing what benefits Etsy Wholesale brings to counter such common event in a life of an artist as a trade show.
“Trade shows are very expensive and a nightmare logistically for me. …A typical trade show can cost anywhere from $1,000 to $5,000 or more to attend when you calculate travel expenses, etc. Etsy Wholesale costs $100 to join and an additional 3.5% transaction fee on the order. So I am really hoping the success I’m having on Etsy Wholesale continues. I really believe this is the future for small businesses…”
And just like other small sellers, she encounters the problem of satisfying growing demand from vendors. As she reached the maximum of her capabilities, she considers a possibility of leaving her main job and hiring a staff. That is just one of many success stories. Lots of them are over there. People find the way of just doing what they like on regular basis and make a real profit from it. That, as Casie mentioned, is another step up towards fulfilling their dreams.
Is it worth it?
If you haven’t been already convinced by the story of Casie, go ahead and find other stories. Behind every of it stands a human being with its hopes and doubts, values and ideology. Some hate Etsy for stepping from declared values, some use its possibilities to get the maximum from their business and some are just trying to share what they are doing with the rest of the world.
Behind all of this stands Etsy, a company which 12 years ago started as a startup from crafters for crafters and is constantly growing as its community. As demands of the community are growing Etsy is trying to keep up with those. It is not always going well, but Etsy Wholesale is definitely a good example.
Etsy is also a company and a big one. Besides making money it has to keep up with other companies on the market (as Amazon, who has launched their own handmade section) or it will eventually vanish. Every company on its way goes through some kind of transformations, sometimes it is a necessary evil, from which comes something great.
Most important thing is that Etsy is steadily growing, and entails its’ community with it. So more people are able to fulfill their dreams. If you feel capable of doing something bigger, and make money on it, why not give it a try?