Etsy sellers face legal challenges in 2020

by Alejandro U. Legal Marketer

Etsy, the largest e-commerce host to homemade and vintage goods, allows thousands of individuals to sell their products from a single marketplace. In 2018, Etsy annual total sales amounted to 3.93 billion U.S. dollars, up from a mere 314 million U.S. dollar in 2010.

The perks to using an Etsy store instead of a personal website for a craftsperson’s online shop are many; the notoriety, popularity (233.67 million visits last year according to the website SimilarWeb), growth, and search capabilities of Etsy arguably make goods easier to find rather than scouring the world wide web. Additionally, the sellers on Etsy are essentially small business owners, and can control the size of their company, or hobby, accordingly.

As many Etsy sellers maintain their Etsy stores as a primary career, the time and effort they devote to their shop operates as the means of income for their families. Many sellers we interviewed on the popular marketplace reported that Etsy sales contribute up to 75% of their household income.

“My husband and I owned a screen printing shop prior to opening our Etsy shop, and we were doing our own designs as a side project. I envisioned selling a maximum of a few shirts a week on Etsy. Our transition into selling full time was very surreal; it went from selling an item every few days or weeks to selling 20+ items a day, quite literally overnight.”

Etsy is a perfect gateway for craftspeople and suppliers to run their own show, only requiring a computer and internet as overhead business costs. However, maintaining e-commerce businesses come with many legal threats and issues for the owners. The freedom of the internet intrigues many sellers to a seemingly barrier-free realm to sell their products, and often they overlook properly protecting their brand and taking other important legal moves in operating their business.

Working with Etsy, sellers are protected, in some aspects, from many possible legal predicaments. Etsy’s terms of use operate as an agreement for sellers and any other users of the site, and provide legal policies. For instance, Etsy cannot guarantee true authenticity of the sellers, buyers or items for sale, but will step in if issues arise between parties. Parties may file “claims” with Etsy over many issues, including invalid transactions and copying, and Etsy reserves the right to correct problems.

Another top Etsy seller, Adan, who owns the pary supplies store Jump 4 Adam, recently found another Etsy seller using most of their original photographs in their shop without asking for permission. “I researched about copyright infringements online and read the Etsy copyright policy and decided I had a good reason to file a complaint through Etsy. The issue is now resolved and Etsy notified the seller and the photo has been taken out of her shop.”

What if Adan's photo was being used commercially by a non-Etsy business, could Etsy still protect her rights of copyright? Etsy’s Copyright and Intellectual Property Policy does not make reference to such instances that arise outside of the web site, so Etsy sellers would possibly have to consider consulting an attorney. Interestingly, due to the preceived high costs of legal services, the interviewed Etsy sellers have never, to date, felt that consulting an attorney with regards to their e-shop was essential. Yet, many Etsy sellers do not know their rights when common legal problems arise.