Etsy is probably the most popular online store for handmade, vintage items and artists’ supplies. And like so many other online stores, the e-commerce provider founded in 2005 is going through the pandemic as a winner. But banned items tarnish the ideal world image on the platform.
Masks as profit generators
When wearing masks on buses and trains or in grocery stores became mandatory in the first lockdown, cotton fabrics and rubber bands were scarce at first. Good for those who had a well-stocked fabric depot at home. The mask-sewing boom also gave Etsy a good boost.
In April 2020 alone, users sold twelve million face masks on the platform for the equivalent of around 120 million euros. One million of these self-sewn masks came from Germany – they found new homes in 80 countries around the world.
Etsy with record quarter
In 2019, the shopping platform made 818 million U.S. dollars in sales, net profit was 96 million U.S. dollars. In total, goods worth five billion US dollars went over the virtual store counter.
But the pandemic gave the company, which has been listed on the New York Stock Exchange since 2015, a windfall.
After a strong fourth quarter in 2019 with $270 million in revenue, the first quarter of 2020 saw the annual post-Christmas dip – revenue fell to $228 million.
Then came the bang in the second quarter of 2020, with sales skyrocketing to around $428 million – an increase of $247 million compared to the same period last year.
Customers come from all over the world
Many new customers came to the platform during this time, Etsy CEO Josh Silverman told Handelsblatt in June 2020. “We have many new customers who order masks and got to know us through that and now buy other products.”
In this regard, he said, Germany is one of the five most important markets for Etsy outside the United States. Since 2018, the number of buyer:ins has tripled to more than two million, he said. The platform was able to double the number of sellers to 68,000 in the same period.
Around half of the items sold go to German customers. “Germans love handicrafts,” says Silverman, adding that homemade items and craft kits are particularly popular.
Numerous illegal and prohibited contents on Etsy
But of course, Etsy – like so many platforms on the Internet – is not just about people with good intentions. As Business Insider reports, the portal is full of illegal products.
Business Insider’s research found around 800 items that violate the company’s policy on banned items. These include animal remains such as ivory, pornographic material, weapons, and a number of mass-produced items that are passed off as handmade.
Some of the merchandise offered is not necessarily prohibited. However, they do violate Etsy’s guidelines. Accordingly, the platform prohibits “items that are presented as weapons or intended to be used to cause violence.”
This excludes “tools,” “unusable decorative items” and “foam, rubber or plastic reproduction weapons for training or role-playing.”
Etsy rebuilds system and expands team
“At least” $40 million will now go toward strengthening policy enforcement systems. This is announced by Etsy after the publication of the research.
The e-commerce provider plans to expand its content review teams tenfold by the end of the year and introduce new automated tools for image recognition and geo-based targeting, “Trust & Safety” head Corinne Pavlovic announced in a blog post.
Products are still available
Following the publication of the research findings, Etsy removed the affected products from the platform. However, similar items are still available on the site. Gizmodo, among others, reports of further banned products.
“Within minutes” there were “a number of banned products” to be found – including weapons and an ivory bracelet that has only been for sale since March 2021.
That’s especially sad when you consider Etsy’s business model. That’s because the e-commerce platform earns its money through fees. For one thing, listing fees are charged. And even when a product is sold, a certain percentage goes into Etsy’s pocket.