[MicahKV]

I'm one of those sellers who is being forced into Etsy's new ad program. It is frustrating and obnoxious, but I can't say it is surprising given the policy changes they've been rolling out the past few months.

It seems to me that online marketplaces like Etsy find their early success by bringing buyers and sellers together and just letting them do their thing, but as the marketplace becomes more established it's relationship with sellers inevitably turns adversarial.

I feel like we need some form of regulation to limit how marketplaces like Etsy can dictate how their sellers conduct business. Amazon has a program that allows "business" customers to place an order and pay the invoice 30 days later. Since Amazon only pays out every 2 weeks, this means I can be made to wait up to 6 weeks to be paid for an order. There is no way to opt out of this and I would be penalized if I refused to ship these orders.

[csomar]

> I feel like we need some form of regulation

That's crazy. Etsy is not the market, it is a market. If you don't like it, you move somewhere else.

We already have too much regulation that for some fields it's impossible to start a business without jumping through many hoops. Last thing we need is to start regulating on a per-business basis.

This is really a case of giving up your store brand/independence for convenience. Starting an online store is not hard these days, everybody should host their own if they are serious about their business.

[Fnoord]

> That's crazy. Etsy is not the market, it is a market. If you don't like it, you move somewhere else.

Easier said than done due to network effect. That's what they went for. Its also how Amazon and Facebook got so big. Heck, its even why Microsoft Windows got big. Become the cheapest, get volume, then abuse your market domination.

[mcv]

And we keep subjecting ourselves to that.

It seems to me that the most logical response is for merchants on Etsy to get together and launch their own platform, collectively owned by the merchants. It puts them in control and not at the mercy of some company wielding power over them, while they keep the advantage of having a single platform with a lot of merchants.

In fact, I've also been thinking taxi drivers should do something like that to fight back against Uber. Cut out these artificial middlemen and deal directly with your customer through collective tools that give you the same advantage as the big companies.

[Fnoord]

Cutting out middlemen is what the Internet has allowed in multiple ways. Its one of the reasons brick and mortar stores are in decline. Yet we also see an increase in middlemen, in the form of dropshipping.

We're also subjecting ourselves to scammers on market platforms and "crowdfunding". I fell for one on Kickstarter, which is also available on IndieGoGo. IndieGoGo acted (by disabling it), Kickstarter has not. In fact, Kickstarter remove any personal information shared by backers about the scammers. Who's side are they on, I wonder? Not the backer's side, it seems.

I assumed these middlemen platforms (Etsy, Kickstarter, etc) are there to please both parties equally. I suppose the keyword in both these stories is service. If they don't provide good enough service, people will eventually work against the network effect to create something better.

[lathiat]

And different to past history is that network effect is now largely worldwide and not just local to a city or even country.

[rhacker]

Probably could have been said better, and there's also probably no need for regulation but at least people should be fighting back.

But ultimately the suggestion to build your own is definitely the best move you can make. Etsy will always focus on their own SEO before anyone else's.

[csomar]

> there's also probably no need for regulation but at least people should be fighting back.

They can fight back by

> But ultimately the suggestion to build your own is definitely the best move you can make.

[brnt]

Always had the feeling this is a consequence of business and legislative culture. The US seems to favor large near a monopolists (Amazon, Walmart, two or three network operators, Facebook) and consequently people regard those places as semi-public fixtures of the environment which one cannot do without. Whereas in Europe still markets are much more plural and its easier and thus more common to move your business. When people say Europe does not produce behemoths, I see that as markets operating better than in the US and generally being a good thing.

[officialchicken]

> When people say Europe does not produce behemoths

Volkswagon, El Corte Englais, Credit Swiss, Ubisoft ... there's at least a few in each member EU state, just like the United States

[distances]

Large companies, but none of these are anywhere near forming a monopoly.

[QuesnayJr]

It's not crazy. Being "a market" for a certain good is a natural monopoly -- there are economies of scale so that one market will inevitably drive out the others. I don't know if Etsy has reached that point, but it could someday.

[barry-cotter]

There’s extremely limited evidence that natural monopolies even exist. The economic definition is when the efficient number of sellers in a market is one. That may be the case for airframes, see the endless subsidies for Boeing and Airbus to avoid that happening. But even a market like microchips where a fab costs tens of billions of dollars supports multiple sellers.

[QuesnayJr]

Etsy is an example of a two-sided market (https://en.wikipedia.org/wiki/Two-sided_market) which can be natural monopolies.

[ryan_j_naughton]

Most of the time when two sided markets gain market power through a dominant position, they still aren't a monopoly. They are an oligopoly employing game theoric positions that are worse than perfect competition but far from a natural monopoly.

For example, even with Amazon there is Target and Walmart selling online and doing much more similar delivery times these days.

The network effect of a two sided market definitely is a barrier to entry, but there is so much capital out there that other large firms or firms with access to insane amounts of capital will also build a 2 sided market and create a network effect. It's why there is Shopify, eBay, Etsy, etc. All more like an oligopoly than a monopoly.

In contrast, true natural monopolies need barriers to entry that are so high that it just doesn't make sense or isn't even possible for another company to do it even if they have insane capital. The electricity grid prior to "deregulation" and the forcing of a more competitive market was a prime example and the grid being governed/run by an independent service operator.

[barry-cotter]

Exactly! If the threat of competition holds prices below the profit maximizing levels for a monopolist you may have a local monopoly but it’s not a natural monopoly.

[pintxo]

Extremely limited evidence?

How about water or electricity grids? Railroads? (City) Streets?

[barry-cotter]

There are examples of enduring competition of all of those bar city streets within a single city, never mind nationally. Even streets aren’t a natural monopoly. If they were you wouldn’t have patchwork metro areas divided up between different municipalities. The benefits of consolidated ownership would be so great that the Bay area would have unified like New York’s boroughs did to form the city of New York. Private towns and streets work fine. For very large examples see Davis in California or Gurgaon in India. The below quoted text is about utilities like water or electricity grids. The US does not have one freight railroad operator even now. If rail was a natural monopoly that would be unavoidable. NYC’s subway system was built by five or six companies. Local monopolies occur in lots of places but they can’t charge profit maximizing prices because of the threat of entry from other firms. The powerlessness of that threat is a necessary part of the definition of natural monopoly. If it doesn’t hold; if the threat of potential entrance of competitors holds down prices you don’t have a natural monopoly.

> The Myth of Natural Monopoly

> In his 1986 book, Direct Utility Competition: The Natural Monopoly Myth, he concludes that in those cities where there is direct competition in the electric utility industries:

> Direct rivalry between two competing firms has existed for very long periods of time — for over 80 years in some cities; The rival electric utilities compete vigorously through prices and services; Customers have gained substantial benefits from the competition, compared to cities were there are electric utility monopolies; Contrary to natural-monopoly theory, costs are actually lower where there are two firms operating; Contrary to natural-monopoly theory, there is no more excess capacity under competition than under monopoly in the electric utility industry; The theory of natural monopoly fails on every count: competition exists, price wars are not "serious," there is better consumer service and lower prices with competition, competition persists for very long periods of time, and consumers themselves prefer competition to regulated monopoly; and Any consumer satisfaction problems caused by dual power lines are considered by consumers to be less significant than the benefits from competition.

https://mises.org/library/myth-natural-monopoly

[pas]

I'd add that the FDA observed that market forces bring prices down basically in a very straight-forward linear way: https://www.fda.gov/about-fda/center-drug-evaluation-and-res...

We also know that as Google Fiber entered any city the incumbent ISP immediately decreased its price.

Natural monopoly is a strange concept. Its formal definition by Baumol: "[a]n industry in which multi-firm production is more costly than production by a monopoly". ( https://en.wikipedia.org/wiki/Natural_monopoly#/media/File:N... )

It sounds like it's almost true in every case where you are forced to duplicate components/processes/efforts/structures, plus even with diminishing returns economies of scale helps the big companies.

Of course why the big incumbents get complacent/inefficient, why they turn to regulatory capture instead of R&D, is a different question.

[boh]

> We already have too much regulation that for some fields it's impossible to start a business without jumping through many hoops.

> If you don't like it, you move somewhere else

These two statements contradict each other. You're asking stakeholders to change their operating model in order to avoid Etsy having to do the same. This non-existing regulation potential impacting the practice of "starting a business" isn't a necessary argument. Stakeholders are resisting decisions that are negatively impacting their business--financial and tech firms do it all the time.

[geofft]

Here's an alternative to regulation: use some of the tax money gained from Etsy and other companies to subsidize the creation of a competitor. One of the known inefficiencies in the free market is how long it takes to set up a viable competitor and how expensive it is, so if the government puts its finger on the scale here, you get closer to the ideals behind the free market.

[glogla]

> That's crazy. Etsy is not the market, it is a market. If you don't like it, you move somewhere else.

Sufficiently big _a_ thing becomes _the_ thing because of economies of scale, network effects and "the software is eating the world" effects.

See Google, Paypal, Microsoft, Facebook, Twitter, and so on.

[WalterBright]

All those companies are well aware that the worse they treat their companies, the more likely competitors will appear.

It happens all the time. Big, unstoppable companies become sloppy and complacent, and suddenly find themselves in free fall.

[TheOtherHobbes]

If by "all the time" you mean "once every couple of decades, often after antitrust intervention", then possibly.

[WalterBright]

Sears, Kodak, GE, etc.

[massysett]

Heck, even eBay. In the small-business-to-consumer market, it’s a shadow now compared to Amazon. Ok, at least Amazon does fulfillment so it’s not exactly comparable to ebay. But Etsy? There’s no reason eBay couldn’t be dominating that category. Didn’t take a couple of decades or antitrust intervention to destroy ebay.

[jacknews]

These were because technology changed, not because of better competitors doing the same thinig

[rcxdude]

Then another huge company grows out of the competitors and begins doing the same thing. Just because the company on top switches out occasionally (and during the transition there is a viable option which isn't abusive), doesn't mean the system is working.

[WalterBright]

People switching to another company means it works.

[rcxdude]

Just because the abuser eventually gets replaced, doesn't mean the abuse stops (as mentioned, the replacement then settles into the same behaviour until another competitor comes along). If there's a non-abusive option 20% of the time, and 80% of the time there's only an abusive option, that doesn't strike me as 'working'. I would say the ratio would need to be 90% to 10% (i.e. any company starting to abuse its position loses it very very quickly, and the replacement does not engage in such behaviour for a while), in order for such a system to be anywhere near acceptable.

[fiblye]

I don't want to be condescending here, but I know it'll sound like it.

Etsy is small potatoes compared to those companies. It's the most easily avoidable of the bunch. If Etsy makes a truly stupid decision and sellers revolt, they'll be on life support before the year is over.

[MicahKV]

> If you don't like it, you move somewhere else.

Yes, and if you don't like existing regulations you can just move to another country with different laws. No big deal, right?

I do operate my own site in addition to selling on multiple marketplaces, but even with my efforts to diversify I am dependent, in part, on the sales I get from Etsy. I would be in a lot of financial pain if I lost that revenue stream, so "just move somewhere else" is not really an option.

Sometimes regulations are necessary to keep big companies (Amazon, Ebay, Etsy) from abusing their customers (including small time sellers like myself). Regulations may not be the answer in this case, but it's at least worth discussing.

[SllX]

Whenever you think about creating a new “regulation”, by which I assume you mean a new law, try to think of what the phrasing for that law would be and then think about the enforcement mechanism, the implications of the law as written, and the possible, even probable complications from the enforcement mechanism.

If you come up with something that isn’t going to unfairly penalize startups and small businesses, you might even have something there, but if you find the exercise difficult, there’s a decent chance all of Congress or your State’s legislature or your country’s Parliament and all of their aides are also going to have trouble coming up with a well written law, let alone one that will survive the political process, and the most likely result is something that entrenches existing businesses, ultimately reducing your possible future choices. Actually the most likely result is a law not even passing, and if it does, getting distorted along the way into something that will likely reduce your possible future choices.

It’s not that lawmakers should never pass laws, a new law should be judicious and necessary, something that can’t be handled by the Courts from the existing body of law, and something that ought to be handled by law rather than some other civic institution. There’s a lot of ideas for laws out there that doesn’t meet any of this criteria, but we still hold onto this idea that “regulations” are magic and will almost always have their intended effects rather than almost never.

[otterley]

All of this may be true, and yet, it’s not a very strong argument against regulation. I’m glad that we have safety regulations, despite objections such as yours, because they have demonstrably saved lives.

[SllX]

Lawmaking is an important part of a nation of laws, but that does not mean the body of law should have needless additions. This is why the process of selecting lawmakers is generally tied to a political process so that new laws are brokered and argued both for and against and modified.

The first test however for any new bill that would be law is, do we need this law? I think in cases where disputes are contractual or market-oriented, it is okay to rely on the resources of the State (the Courts specifically), especially if no other form of arbitration will resolve the dispute, but passing a new law should be a last resort and only after a case for it has been properly made, and a coalition around the new law formed.

[hellisothers]

I read their argument as against over-regulation, regulatory capture, and regulation moats like the ones Facebook is advocating for. An easier thing to imagine is if you got the regulations you wanted in place but at the end of the day they’re just preventing a thing you don’t like because it’s “new to you” and your business. Now if a startup wanted to come along and use what Etsy is doing _up front_ as part of its business mode it can’t, even if people don’t mind because they knew what they were getting.

[faintrain]

What are your options?

1. Build your own. 2. Collectively organize with other Etsy shop owners to advocate with Etsy leadership.

These type of policy changes aren’t a surprise anymore, no? We’ve seen them from Apple, Facebook, Shopify, Twitter, Amazon, EBay, etc for more than a decade now.

[Lucadg]

Maybe decentralized marketplaces could offer a solution in the long term. This one surely is a serious attempt: https://www.originprotocol.com/

We are working with them to build an Airbnb alternative but all sorts of marketplaces can be built.

[fidelramos]

OpenBazaar (https://openbazaar.org/) is the pioneer decentralized marketplace, it has been working for years. They recently launched their mobile app, Haven, which makes it very easy to use. From what I read they are gaining traction, and hopefully moves like Etsy's will incentivize people to explore these solutions to censorship and centralized control.

[hapless]

Cool, decentralized lawbreaking as a business. This is better than a centralized criminal syndicate because ????

[MicahKV]

They are not a surprise, no. I have wondered before what marketplace sellers could do in the way or organizing/unionizing.

[tyingq]

A coordinated day where they all pause sales listings, say during an earnings call, might get attention. Especially if you get some financial reporters advance notice. Even if participation is low, some analyst is likely to ask about it in the earnings call.

[TsomArp]

In South America we have a similar situation with Mercado Libre (ironically called Free Market in spanish). For example, they started charging 1.5% commission, and by the time they had no competition, they have raised it to 11% or more, which is crazy. They force you to ship things (I only want to sell in person because people then dispute things and keep the orders and the money), etc. But at this point it has gotten so big that it is almost impossible to not be there. You just hope that the next purchase will be not through they.

[alharith]

> I feel like we need some form of regulation to limit how marketplaces like Etsy can dictate how their sellers conduct business.

I halfway agree, and halfway feel the opposite: We need to restore teeth to our existing regulatory bodies, and we need more competition. We need to reduce barriers to entry, and stop the anti-competitive behavior behemoths like Amazon have been exerting for years now.

[Shivetya]

So I have to ask, why not move to ebay? Is their fee schedule worse than Etsy? I only buy from ebay and from the buyer perspective I enjoy the protections offered.

if Etsy wants to damage their brand than so be it. However there are multiple market places out there and this move by Etsy may be the push people need to look into them or start one.

edit: Found a comparison [0] spreadsheet for fees/etc, no comment from me on accuracy but it does show ebay as higher

[0] https://docs.google.com/spreadsheets/d/1z9PZDYLzlJe4fRgS85UX...

[anonsivalley652]

Two things: other platforms and your own store.

There's a lot of other sizable platforms these days. AliExpress, Jet, eBay, Banggood, Wish, Rakuten and more.

And, can you sell a selection of products on those various platforms as teasers to lure customers to more products on your own e-comm? This way, you capture more of the value than give it away to them. You would have to find a way to run your own site/app and do shipping, but that's the trade-offs.

[justaguyhere]

becomes more established it's relationship with sellers inevitably turns adversarial.

It is not just the market places though, isn't it? Twitter used developers to grow (generous API limits) then cut them off, tumblr used erotica to grow then started restricting, google allowed certain ads at the beginning then added restrictions... and so on.

How much regulation can you put in place for such behavior? Also regulation is expensive, selective and can be rolled back when the next gov comes along.

Would be nice to have some kind of decentralized solution for this...

[benignslime]

Have you compared the price to say, hosting your own website, finding your own marketing platform, finding a payment provider, and managing logistical challenges, all for 12% of the gross income of your product?

I can see why people would be frustrated, but you're getting a whole lot for using their service.

[MicahKV]

I do host my own website and manage all of those things, but it's not a question of the cost it's the fact that I can't opt out. It impairs my ability to predict & control my expenses, and it forces me to subsidize Etsy's ad campaigns that compete directly with my own website.

[massysett]

You can opt out: don’t sell on Etsy.

[Glyptodon]

The sad thing is that many successful Etsy sellers do have their own websites and also sell through other platforms besides Etsy. So they have the costs you mention + Etsy costs.

[Dahoon]

>Amazon has a program that allows "business" customers to place an order and pay the invoice 30 days later.

That is how it works "in real life" everywhere in the world, so i don't see why Amazon should be any different.

[sneak]

> I'm one of those sellers who is being forced into Etsy's new ad program.

How are you being forced?

[PeterisP]

They'll be charged 12-15% of the purchase value if Etsy thinks that their buyer clicked on an Etsy-related ad somewhere in the last 30 days.

[skinnymuch]

They mean forced if they want to continue using Etsy, right? Or did I misunderstand the intent of your comment.

[AdrianB1]

That means there is choice, which does not qualify as "forced".

[skinnymuch]

Isn’t that being pedantic? Would any one think a pretty minor private company is forcing some one to do something by setting out rules beforehand?

No company forces bad work conditions on their employees either any more. Since you’re always free to leave. I’d think you can use force in cases like that though (IE at least previously some of Amazon warehouse worker issues)