Etsy is a US-based e-commerce platform launched in 2005 and focused on the sale of handmade and vintage items. The website offers a broad range of jewellery products, along with apparel, home décor, furniture, and art.
In 2024, a new company policy allowed sellers to use AI-generated content, so long as it was appropriately disclosed and was not misleading. A report published by WIRED has documented frustration among long-term sellers on the platform over the impact this change has had.
Many argue the rules against misleading content are ineffective, citing undisclosed AI listings and original works incorrectly flagged as duplicates. UK-based illustrator Viktor, who has sold on Etsy for a decade, said his sales have declined by 98 per cent over the past year.
“People have learned not to trust once-trusted sites like Etsy, because they are tired of seeing AI slop that is now infecting the site,” he said.
“Unfortunately, this has turned potential customers away from actual artists.”
The company has faced growing competition from platforms such as Temu and Shein in recent years. Concerns about AI-generated content and marketplace standards have also created opportunities for new entrants.
Platforms such as Fybe appeal to dissatisfied sellers by banning AI-generated content and enforcing higher standards. Fybe founder Rachel Powell highlighted the opportunities created by gaps in current marketplace policies.
“I figured if we could start a platform that has human moderation and only allows vendors that aren’t using AI or using drop-shipping, then we could be filling a very real need in the community,” she said.
Despite these concerns, Etsy remains a major marketplace, with 5.6 million sellers and $2.8 billion in revenue last year. Etsy vice president of customer operations James Ossman acknowledged sellers’ concerns and the challenges of enforcing AI transparency standards.
“Etsy is the marketplace for goods made, designed, handpicked, or sourced by real people,” he said.
“That includes original works created by sellers who may use AI as one of many tools in their creative process.”
He added that the company is working to improve its ability to detect and remove listings that fail to meet its standards.
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