Why Artisans Are Building an Alternative to Etsy

The portrayal of the starving artist might be commonplace, but it isn’t fair. Regardless of whether artisans are called artists, crafters, creatives, or makers, because they enjoy what they do, their work is too often considered a hobby that doesn’t merit fair financial remuneration. Long before the rise of the platform economy, artisans were already regarded as self-employed and outside the protection of national labor laws.

The economics of online art sales today make it as hard for artisans to make ends meet as ever.

Business publications once celebrated how the internet helps artisans thrive. Unfortunately, the economics of online art sales today make it as hard for artisans to make ends meet as ever. This is why a group of artisans have recently come together to create a platform co-op of their own. While the Artisans Cooperative is still in the early days, if it succeeds, the implications for artisan wellbeing could be life-changing.

How Did We Get Here?

Before the Industrial Revolution, most items created by artisans were household necessities, made in the home, and not considered merchandise. Many crafts, such as sewing and quilting, were considered “women’s work,” allocated as much value as doing the laundry. When these items started to be manufactured in factories, those jobs were often relegated to women, who were paid far less than men.

When unions stepped in to protect the rights of factory workers, no one was looking out for the cottage industries that kept handcrafting arts alive. Artisans had few outlets for selling their creations beyond brick-and-mortar retail stores, galleries, and craft fairs, each taking their cut with high commissions while offering limited access to customers. Many of those crafted homewares became the most treasured family possessions generations later.

Craft and Capitalism in the 21st Century

In the early days of e-commerce, the opportunity to sell online was quickly commandeered by Amazon. Google began to manipulate search engine results with paid ads that soon were saturated by Amazon listings. Social media got harder for micro-businesses, too: linking to one’s website on a Facebook post without high levels of interaction by others to drive its overall reach often algorithmically condemns the post to a ghosted dustbin.

But with the 2005 launch of Etsy, an online marketplace for handmade goods, artisans finally had access to a worldwide venue where they could earn enough to support themselves. It was great for the first few years and changed the playing field for many artisans. Some of those early adopters built careers and businesses entirely off the platform.

But that soon changed. There were complaints that Etsy was inconsistently applying policies requiring items to be handmade. Artisans found themselves competing with Amazon-style resellers on the platform, who offered subpar merchandise and engaged in rampant trademark and copyright infringement.

Things went from bad to worse in 2015. Etsy became a publicly traded company and abandoned its B Corp status. After that, it seemed to drop all pretense of being a marketplace of handmade work. (In 2023, watchdog investor research firm Citron Research announced that Etsy had become one of the largest platforms in the world for counterfeit goods.)

They then leaned hard on the artisan sellers, and the sellers themselves may have become one of their biggest revenue streams. They raised transaction fees from 3.5 percent to 5 percent, forced a mandatory advertising program, and increased labor demands on sellers—for example, the Star Sellers program requires sellers to respond to messages within 24 hours, 365 days a year, or else they get dinged.

In February 2022, Etsy raised transaction fees again, to 6.5 percent, in the same week it announced record profits in 2021. It was tone-deaf to announce both in the same week, and it hit a nerve with sellers everywhere.

The #EtsyStrike

When those February 2022 announcements were made, there were no viable alternatives to Etsy. Big-money alternatives like Amazon Handmade or the new Michael’s Marketplace are even less friendly to artisans than Etsy. Like-for-like competitors Elo7, DePop, and others got gobbled up by Etsy. New investor-funded startups are hoping someday for the same. They’re just starting the cycle anew.

Putting pressure on Etsy to change its practices seemed the only option, so artisans turned to strategies unions had successfully used to change abusive labor practices. A few posts on social media ignited what became the #EtsyStrike. The strike was organized entirely online in just seven weeks, attracting worldwide mainstream media attention. Strike organizers claimed 30,000 shops joined the strike, verified by a 1 percent drop in listings of 5.3 million shops tracked by Etsy blogger CindyLouWho-2. A Coworker.org petition netted over 85,000 signatures.

But Etsy ignored all of this. When asked about the strike at a Wall Street Journal event, Etsy CEO Josh Silverman was dismissive: “Each of our sellers is a blade of grass in a tornado. They’re someone you haven’t heard of.”

The rules had changed. If there was no alternative to Etsy and union strategies were ineffective, there had to be a way to replace them without becoming them. 

A Cooperative Option

By organizing a co-op, artisans pool customers and share the labor of maintaining a website.

Megaplatforms that use apps to connect customers with products or services, such as Uber, have categorized workers as independent contractors and thus outside the legal protections won by organized labor. Etsy sellers felt they were similarly being treated as gig workers, which led to growing interest in forming a cooperative.

As John Curl writes in For All the People, this pattern appears throughout history. Namely, industry conditions lead fed-up workers to strike, but workers get disappointing results and decide to form a cooperative instead. Since at least the 1830s, it was even a conscious union organizing tactic taken in anticipation of future hard times, with co-ops providing employment for striking workers.

Having a diversified presence online with a viable cooperative marketplace alternative would lessen the financial risk to an artisan putting their Etsy shop on strike and could allow greater participation in future protest actions for more impact—and maybe even someday make Etsy completely irrelevant.

Starting Artisans Cooperative

By organizing a co-op, artisans pool customers and share the labor of maintaining a website. After the 2022 strike, the idea began to be discussed all over the internet on social media posts, with many people coming to the same conclusion. Even one business reporter covering the strike suggested the same idea: “[business] analysts…said that those who rely on platforms for their livelihoods could emerge victorious by joining together in cooperatives or establishing different platforms.”

Although the original strike organizers were not interested in the co-op idea, a subset of strike members decided to splinter off and pursue it. The organizing team included an Oregon-based Etsy seller (Valerie Schafer Franklin, a coauthor of this article), a Midwest-based social media “Discord power-user,” and a programmer based in France. The initial team of three brought together the skills of a technology specialist, a social media specialist, and a business development specialist.

The team started building Artisans Cooperative in July 2022 from scratch. At a co-op webinar by the US Federation of Worker Cooperatives, the group found allies who were welcoming, transparent, and willing to help. By January 2023, the growing team was ready to apply to the Start.coop business accelerator and were accepted. The accelerator provided the $10,000 needed for legal incorporation as a multi-stakeholder cooperative corporation with three types of members—artisans, supporters, and platform co-op staff.

By now, the community had grown to over 150 people, using Discord as a free online café for culture building and discussion. The group developed policies to preserve craft traditions to avoid the problem of “handmade-washing” that happens in marketplaces like Etsy. Using a community-powered verification system that doesn’t rely on bots, artisans moderate the marketplace themselves, motivated and incentivized by the cooperative business model.

Inclusion and Ownership Written in Policies

Co-ops reward dividends based on patronage activity. But rather than divide contributions by class, Artisans Cooperative uses a system of “points and tiers” to reward all kinds of member contributions equally in one currency—including “non-cash” contributions. Artisans can earn patronage for sales and purchases on the marketplace, activities like handmade verifications, and referrals. Currently, the entire marketplace is being run by its members as patronage activities. But when staff is hired, they too can become worker-owners under the multi-stakeholder co-op structure, as described above.

The Artisans Cooperative marketplace launched in October 2023, and within three months, it had 148 shops and 295 members. It’s a far cry from the 7.5 million-plus shops Etsy claims, but it does exceed the group’s initial expectations. The goal for the cooperative is to reach a “critical mass” of sellers and buyers within the next three to five years. A critical mass means having enough artisans to provide a good product selection for buyers, and enough buyers to provide a reliable sales stream for artisans.

Building that critical mass takes effort and patience. Because no marketplace launches with an immediate critical mass, members are adding Artisans Cooperative into their marketing mix, including their own websites and even Etsy. That’s encouraged and supported by the cooperative because artisans’ microbusinesses are more resilient when they are diversified across many channels.

The cooperative members voted shortly after forming to maintain 100 percent control over their company, even if it means slower, more organic growth. Most new marketplaces are pumped up by big investors who own the company and then deflate with alarming speed. As most small business owners know, resilient small businesses don’t take on more than they can handle but gather strength bit by bit, like a snowball running down a hill.

Etsy itself credited the artisans for its initial success. Etsy’s previous CEO, Chad Dickerson, said in a stockholder meeting at the time of the IPO in 2015 that the reason for Etsy’s remarkable user growth was due to makers promoting their own shops.

To succeed, Artisans Cooperative will need to do the same—by attracting new artisans looking for an alternative. One by one, as each one comes online and begins sharing the marketplace with their networks and customer lists, it will scale sustainably.

The enthusiasm shown for this experiment bodes well for a future where artisans will experience their work being valued and compensated for the talent, time, and dedication they invest in it.

What’s more, they can join the growing list of economic experiments where cooperation, rather than competition, results in financial success and a positive life for everyone.