Over the past decade there have been dramatic changes in how small home businesses are run. It used to be you could sell tangible goods on eBay. But the catastrophic changes in PayPal’s payment policies have done away with that. All of eBay’s money goes through PayPal, sometimes behind the scenes and sometimes not.
Etsy came along as the craftier version of eBay (owned by eBay) for small home businesses specializing in handcrafted items to sell their products. They had the same problems as eBay–namely PayPal handling all the money.
Amazon came in next with a way for small home business owners to sell on their marketplace. They have their own payment processing service which completely bypasses PayPal. However, they charge a hefty 30% from each sale.
So now where does the average small home business owner sell his/her products? The answer is nowhere.
Below is a short preview of what to expect selling on any of these three platforms.
To read the first article in the series, Small Home Businesses on Amazon, click here.
Selling on Etsy
Etsy has its own set of headaches that are uniquely Etsy.
Etsy is one of the few places where you’ll be contacted by lawyers right from the start. Etsy has a team of junior lawyers who call themselves experts in the area of copyright. In fact, they’ve violated copyright laws for years. About 14 years ago a group of eBay sellers stole ideas from Pinterest crafters and started selling them on Etsy. It didn’t matter that they were stolen. Because these sellers were the first to sell these unique items on Etsy, Etsy claimed they were rightfully doing so. This is not the way copyright works. Copyright is established the moment you create something, not when you start selling it on Etsy. Numerous lawsuits have been brought against Etsy for this very thing. If you plan on selling there, your work will probably get stolen too. Many sellers who started out their craft stores on Etsy found their crafts being copied by other Etsy sellers. Guess who Etsy favored in those challenges? The older sellers, regardless of whether or not they were the legal copyright holder.
This is another area in which Etsy completely fails. Look at the search results for “earrings” below. There are more than 3 million results, half of which are paid advertisements. Most of these are not even handmade. They’re imported from China and sell for less than a dollar. If you sell handmade jewelry you will never be able to make a living on Etsy. Half of the search results are advertisements that are paid for by other sellers. The rest are cheap Chinese manufactured products. Most buyers search by lowest to highest price. You can guess whose products will end up in the first million–they are all from China.
What surprises most people about Etsy is that the advertisements appear at the top of the page, at the bottom of the page, and in the middle of the page between the actual handmade products for sale.
Everything negative you read about eBay and PayPal applies here. You will have to be verified and then wait to be paid. You probably won’t. Etsy is the same company as eBay and PayPal. EBay and PayPal were legally separated a few years ago through a class action monopoly lawsuit. Etsy was never severed from either company.
A decade ago, there were customers buying handmade products on Etsy. With Chinese manufactured products taking over most of the listings, I don’t know of a single person who still shops on Etsy. I don’t know of a single person who sells there either. If there are no customers there, why pay to sell there?