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If you have a business on a platform* like Etsy, now is the time to build an exit strategy.
Here are the top 5 reasons – legal and non-legal – why you should be working right now to direct traffic off of those kinds of platforms.
#1 Your rights can be violated on Etsy with no practical recourse.
First off, let me start by saying that I don’t think any of this is Etsy’s fault.
Sure, some policy changes might help. But the problem isn’t the platform. The problem is how it’s being used.
Your day has just been ruined. Why? Because a loyal customer of yours just sent you a screenshot that made your blood boil.
The screenshot showed a competitor of yours on Etsy ripping off the designs of your items. Even worse, in some instance there are images and descriptions completely copied and pasted from your online store.
You send a copyright violation report through Etsy’s DMCA form. The competitor responds with a counter notice claiming they didn’t do anything wrong. Under its policy, Etsy doesn’t look into the issue any further.
Like a typical handmade business, your business isn’t making enough money for you to routinely register all of your copyrighted works with the US copyright office. As a result, you legally can’t enforce your copyright rights.
Unfortunately, I have to be very careful here. The example I gave above is all too common. I don’t want to provide any more examples, as I don’t want to give any scheming Etsy sellers any ideas.
The point is, rights can be and are violated on Etsy. A lot. And Etsy doesn’t have to inspect or judge these situations beyond safe harbor provisions (nor should they).
I get it. Your Etsy store isn’t necessarily a huge moneymaker. You understandably don’t have the resources or time to enforce your intellectual property rights.
That reality invites competitors to take advantage by copying your works without recourse.
#2 You can be punished under false accusations.
There’s a particular Etsy policy in place that most stores on the platform are painfully aware of.
If you get “enough” infringement reports against your store (there’s no set number), Etsy will shut your store down.
All of that work. The whole revenue stream. Gone.
Now, to be fair to Etsy, the thinking here makes sense. If you get accused of wrongdoing enough times, you must be doing something wrong.
But this policy has led to an unintended and frustrating consequence. A legitimate infringement report against you can count just as much an illegitimate or uninformed one. Again, Etsy doesn’t do much—nor is it legally obligated to—to police these accusations.
This has led to waves of inaccurate infringement reporting.
Again, I have to limit my examples here to not fuel the fire and give anyone ideas.
Here’s a common one. A store accuses you of illegally putting their “trademarked” phrase on an item, when in reality that store doesn’t own exclusive rights to the trademark. This can take many forms, but let’s say that the store has a pending or finalized trademark registration for that phrase.
I don’t want to get into the weeds on the legalities of this here, but these accusations often highlight common misunderstandings about trademark laws (and I don’t want to accuse anyone of ill intent).
Due to the nature of what makes a trademark a trademark, a popular or trending phrase can not operate as a trademark unless there is source identification. By “source identification,” I mean that when a customer observed the trademark, they can identify the source (the particular business) behind the trademark.
This gets complicated. And even if you have a federally registered trademark, that registration can be challenged and canceled. In fact, the trademark office seems to be aware of this problem and has recently put in place a program to cut down on fraudulent trademark applications.
Do not twist my words here. I am not advocating that you get off Etsy in order to make it harder trademark owners to enforce their rights against you. I am in no way encouraging businesses to violate the rights of others.
Our trademark laws exist to prevent customer confusion in the market place, not to monopolize on popular or trending phrases.
#3 You can get sucked into a scarcity or toxic mindset.
Because of the legal issues discussed above, lots of makers are mad. Like, really mad.
And that’s a huge problem.
I see so many people online, like in Facebook groups, airing their grievances and frustrations about these issues.
That reaction, which is so understandable and which I have empathy for, has created so much toxic energy and perceptions of scarcity.
The reality is: the world is wide enough for all to rise. And yet the environment on Etsy makes shop owners feel like everyone is competing and that they need to beat others in order to succeed.
For those of you who identify with this: think about how different your workday would be if you completely removed these online discussions from your day? Think of how much more productive you would be without getting sucked into these conversations. Think of how much better you would feel if you had an abundance mindset around your business.
#4 It’s all about leverage, and Etsy doesn’t owe you anything.
Question: There’s a lot of small business owners who are building businesses on platforms, and then they get really pissed off when like Etsy when the algorithms change. Are business owners entitled to platforms in order to thrive in business?
Gary’s Answer: It’s your fault if you bet your chips all on Facebook without being open eyed. Build everything. I have [my website] for a reason, and I have all my platforms for a reason. Don’t get screwed by the platforms, screw them. Get the value out of them. That’s up to you to have the right strategy.
He’s also said the following about platforms:
I’ll let those quotations from Gary speak for themselves.
#5 Breaking up doesn’t mean you can’t still be friends.
Look, if you’re making lots of money right now through Etsy, that’s fantastic. I am not telling you to shut your Etsy store down right now and lose that revenue.
What I am telling you to do is think about the long term risks of having your entire business depend on a platform.
If Etsy is working for you, by all means, stay on it.
But you don’t need to be monogamous and married to it.
Where do we go from here?
- Work your way off Etsy. I know that it is incredibly hard to build a revenue generating handmade store off of a platform like Etsy. I also know it is possible. Here are some resources to businesses and resources that can help you build a revenue stream for your business outside of platforms like Etsy:
- Be proactive about protecting your rights. By registering appropriate copyrights and trademarks, you are minimizing the exposure to legal risks on platforms. We can help — grab a free call with us to learn more.
- Seek help if you think your rights have been violated. Indie Law does not offer services to help you respond to alleged violations or go after others, but we know law firms that do and would be happy to connect you.
- Stay positive. I encourage you to join the Friends of Indie Law group, a community that focuses on having positive and actionable conversations around topics like these.
I am writing this post because I care deeply about the success and happiness of my clients and followers.
I want the future versions of yourselves to be thriving with the peace of mind knowing that your business is on a solid foundation.
You can do this.
Joey from Indie Law
*When I use the word “platform” in this post, I am specifically referring to platforms that do the work of connecting you to your customers. I focus on Etsy, but there are others, like Amazon Handmade. I realize that, in a sense, other services like Shopify, and even the internet as a whole, can be defined as a platform. What I am encouraging you to work your way off of are websites that operate as a clear middle man between you and your customers, ones where a customer can search the general site and find your product.