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The Local Side of Global

The online craft marketplace Etsy has worldwide reach—and a significant impact on the city of Hudson

by Michael Bielawski on October 17, 2013 · 1 comment



Photo by Michael Bielawski

Etsy pretty much started my business,” says Behida Millinery, owner Behida Millinery’s Hat Shop at 715 Warren St. in Hudson. “Not only did they help financially, but also confidence-wise. . . . They did a video about this store.”

Millinery started her Etsy online store while she lived in San Fransisco, before relocating to the East Coast. Regarding Etsy’s impact on Hudson, she adds, “They imported a bunch of talented people.”

In 2012, The Albany Business Review reported that the city of Hudson had the highest percentage of independent business owners in New York state, and the momentum hasn’t stopped. Hudson is still attracting entrepreneurs like Millinery—and like the company that gave her business its legs.

Two years ago, Etsy, the handmade-product-focused version of Ebay or Amazon, set up shop in a 130-plus-year-old factory building in the center of Hudson. Etsy was started by the small Brooklyn-based company Iospace in 2005, before branching out up north to set up user-support offices. The old lumber, door, and window business named Traver & Sons that used to occupy the building in which Etsy Hudson resides is long gone (though its insignia remains in local homes), along with much of the town’s past industry. However, Etsy helps Hudson carry on the spirit of creating things through hard work and craftsmanship.

Our focus [in the Hudson office] is mostly support, so if a member has a problem using the site or has a question about running their shop, they write in and they are talking to us here in Hudson,” says Branda Maholtz, assistant site leader for the Hudson office. Etsy started with just six employees in Hudson, and today employs around 45.

It’s easy to see what Etsy’s Brooklyn people saw up the river in Hudson. Nearly every building on Warren Street through the middle of town houses a unique crafts shop, antique shop, art gallery, coffee shop or restaurant. While many small cities and towns in upstate New York have not rebounded since big industry fled, Hudson is an exception to the rule, and Etsy is playing a direct role in helping the town reestablish itself.

We helped with another group here in town that put on the Hudson River Exchange, which was an arts and crafts fair over the summer,” says Maholtz. “The Hudson River folks are planning to do another one for ‘Winter Walk’ in December. They shut down the main street, and there are performances, Santa, and reindeer.”


Photo by Michael Bielawski

She adds, “This town needed change, without the textile industry that used to be here, the cement factories, the jobs weren’t here. This is something that other tech companies can do too.”

Etsy’s success is often credited to the efficient functionality of the company’s website for sellers and buyers to link up and complete transactions, and for staying true to its homegrown feel. Sellers can add tags to their items to help buyers search for them, and a popular trend of Etsy sellers is to feature artistic photographs of items being sold, as opposed to the more commercial-style photos found on bigger sites.

After eight years of fast-growing sales, the company now has more than a million sellers and 30 million users, and more than a billion dollars in annual sales. It’s now an international company with more than 400 employees and offices in Germany, France, Spain, Italy, Australia and Ireland. Etsy has gone back and forth over the years on the issue of going public, but today it is still a private company. Etsy started with a relatively simple business model for sellers to follow. Once they join the site for free, each seller pays 20 cents per item posted, and 3.5 percent of any sale goes to Etsy. Anything sold as “vintage” must be at least 20 years old. Those rules still apply.

Etsy is now in a bit of a crossroads about how to continue its business strategy. As the sellers’ sales demands have grown, some have struggled to maintain the handmade standard without being tempted to bend rules. As a result, there has been some confusion over the years of what Etsy officially constitutes as handmade. For example, the Etsy guidelines defining handmade has grown from 4,000 to more than 14,000 words, according to TechCrunch.com.

In April 2012, the blog Regretsy posted a story about an Etsy user, Ecologica Malibu, who allegedly was reselling items against the site’s rules. Initially the seller was allowed to continue, however the user’s account has since disappeared. This and similar stories have prompted Etsy users to call for reformed rules for selling.

Etsy’s situation is a tricky one. On the one hand, company leaders wish to maintain their unique image as a premier venue for handcraft products. On the other hand, they want to help sellers grow their operations. Chad Dickerson, formerly of Yahoo and Etsy’s current CEO, indicated to TechCrunch.com that the conversation about Etsy’s policies and image is an ongoing debate inside the company. He recently posted on his blog, “We’re clearing up long-standing confusion through new Guidelines that give sellers more opportunities to run their businesses their way.”


Photo by Michael Bielawski

So the latest new rules are essentially that each seller must have “authorship” over their products, but they don’t necessarily have to personally handmake each item. For the first time, sellers can involve other people and manufacturing, even off-site, to produce and deliver goods as long as the seller is still the primary designer or “author” of the product.

Also, the entire production process must be transparent and well-documented for both Etsy and its community to observe. The official Etsy policy states, “We’ll ask about your business, your design process, your manufacturer and their production methods. You should be able to demonstrate that you work very closely.”

Maholtz says, “We are really asking sellers to be transparent and focus on the story of their shop and story of their process in the work that they do, because we really think that the more that sellers can engage their buyers in their process and create a sense of trust. Part of our mission is to just enable people, and of course we’re an international company, but [to help people] to easily build and buy from independently creative businesses.

Part of Etsy’s main focus has always been to enable people keep building their business in the way that they want to, and Etsy has always sold handmade, vintage, and supplies,” she adds. “So the changes that we have just made are enabling people to run their businesses and actually scale their businesses as large as they need to, for the way that they feel is best.”

Etsy has recently been B-Corp Certified by the nonprofit organization B Lab. Maholtz explains, “So it’s a select few companies. . . . It’s environmentally conscious and sustainable as can be and transparent.”

Esquire Magazine said of the certification: “B Corps might turn out to be like civil rights for blacks or voting rights for women—eccentric, unpopular ideas that took hold and changed the world.”

It’s worth noting that Etsy has had an interesting mix of talent from other proven business ventures on its team in its relatively short history. For instance, former National Public Radio executive Maria Thomas was CEO in 2009. The company also hired Adam Freed from Google’s product management as chief operating officer. Investors in Etsy include Sean Meeman, Union Square Ventures, and Spencer and Judson Ain.

Despite the personnel from larger corporations, Maholtz maintains that Etsy will remain unique. “The focus is on the people itself. We like to engage the community. . . . People want to be smarter consumers. Part of what Etsy is doing draw a direct line between a maker and a consumer, and allowing them to choose socially responsible goods.”

CEO Dickerson once said of the Etsy community that it’s “a platform that provides meaning to people, and an opportunity to validate their art, their craft. . . . All commerce is about real human interaction.”

And although Etsy’s reach is global, real human interaction is something that happens locally. Rob Williams and his local woodwork and design studio, GRAIN, did some of the furniture for the Etsy office in town. “They have these work stations with big tables that are meant to hold six people at a time, the tops are wood and the bases are steel,” Williams explains. “They are really great to work with and extremely supportive to me and my business. I think they’re providing jobs to the community and a really good fit with the creative side of Hudson, with a lot of the artists and creative people that are moving here. . . . More has been happening in the past few years than in the past 10 years, things are changing so drastically that it’s almost unrecognizable. Tons of young families are here, there were no kids here when I first moved here.”

They had a waterfront event that featured vendors that carried products that were handmade,” adds Hudson Mayor William Hallenbeck. “It was nice to see the artistic creativity of these who create the items that Etsy makes available to the public. It’s always nice to have a premiere business such as Etsy in your backyard.”


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