Jason Del Rey

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Etsy Overhauls Its Seller Policies in What Could Be a Controversial Move

Etsy, the popular online marketplace for handmade goods, is today announcing major changes to the policies by which sellers on its platform must operate that will ultimately make it possible for them to hire as many employees as their business demands, use outside firms to deliver their goods, and outsource all manufacturing of a product to third parties.

The changes mark a drastic departure from how Etsy allowed its sellers to operate up to now. In the past, Etsy wasn’t always clear about how many people could be involved in the production of an item labeled as “handmade.” Also, outside manufacturers could only be used to help produce part of a product.

“Our former policies allowed sellers to use ‘partial production assistance,’ but those collaborations were also often completely opaque on the site,” Etsy CEO Chad Dickerson wrote in a blog post announcing the changes. “When members saw items that didn’t ‘look’ handmade, they could assume shops were breaking our rules, but many shops were actually following rules that we hadn’t made clear enough to everyone.”

Those policies “created a lot of controversy and pain in the [Etsy] community,” Dickerson said in an interview with AllThingsD this morning. Trends such as 3-D printing also played a part in the practices Etsy does and doesn’t condone.

Going forward, Etsy will allow sellers to label an item as handmade as long as the idea originates with them, they take responsibility for how it’s produced, and they are transparent with Etsy and Etsy shoppers about the different parties involved in making their goods. If a merchant wants to use an outside manufacturer to produce goods they’ve designed, they will need to apply to Etsy for approval, and demonstrate that they have a strong relationship with the manufacturer and are familiar with how it conducts business.

While the changes may broaden Etsy’s appeal to a wider range of merchants, the company recognizes that it will also likely anger some who don’t agree with a departure from the past definitions of what “handmade” meant. “Is Etsy selling out?” may be a common refrain. And, if Etsy strays too far from its roots — and if quality suffers — those rumblings will only grow.

“Policy changes can’t make everyone happy,” Dickerson said in the interview. But, he said, the changes are ultimately about alleviating stress and confusion for those hoping to make a living hawking their goods on Etsy, while still keeping the spirit of “handmade” alive.

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There was a worry before I started this that I was going to burn every bridge I had. But I realize now that there are some bridges that are worth burning.

— Valleywag editor Sam Biddle