Etsy Sellers Beware! Temu & Chinese Sellers Will Destroy The Platform

imagine a Marketplace filled with counterfeit goods and mass-produced products where the sheer number of impossibly cheap listings explodes overnight well this isn't a hypothetical scenario it is the reality facing Etsy Sellers as China makes its Grand re-entrance onto the platform right now we're at the beginning of a transformation that will change the Etsy platform forever so in this video I'll explain the implications of China's return to Etsy decode what it means for the entrepreneurial ecosystem and teach you how to navigate this new landscape but first off what's going on exactly and why are Etsy sellers so pissed off well basically Chinese sellers are coming back to Etsy because Etsy is under severe Financial pressure from their investors the past three years were not good for Etsy stock and their gross sales have been decreasing year-over-year now what's the easiest way to boost profits on a stagnant Marketplace bring China back onto the platform now why did I use the words coming back well it's because Chinese sellers used to be on Etsy up until 2021 where they were silently removed due to worries about protecting the Integrity of the handmade Marketplace but recently they added China back onto the Etsy payments approved country list which is essentially like rolling out the red carpet for Chinese sellers to come back now from etsy's perspective this is going to be fantastic for earnings as it opens up the market to 1.4 billion new people but from an Etsy seller perspective things could go very wrong now here's what I predict will happen and this isn't guesswork when Amazon started encouraging Chinese sellers onto their platform it made life difficult for all sellers Etsy is just a couple steps behind and history will repeat itself mark my words all right so here's what's going to happen first off Etsy will instantly be flooded with new Chinese sellers pedaling copyrighted products and violating legitimate sellers trademarks left and right now back in the day prior to 2021 thousands of Chinese sellers were stealing images from other sellers and swarming the marketplace with knockoff products from Chinese factories this is going to happen again Etsy will have a huge onboarding problem and they aren't going to be prepared for it and I say this because Amazon had the exact same problem back in 2016 back in 2016 BC BC stands for before China it was easy to get an Amazon account and you could sell on the platform with very little verification but once they open the door to China they were immediately overwhelmed by new Chinese seller accounts now it took many years for Amazon to adjust but now you had to jump through a bunch of Hoops just to get an account today to sell an Amazon you have to go through a 10-minute interview show legal identification and utility bills to show your real address and basically prove that you are who you really are it's actually quite an ordeal to get an account and it took a lot of time and Manpower for Amazon to implement these stringent procedures the same thing will happen to Etsy and Etsy will have to deal with this correctly otherwise the platform will be over overwhelmed with new applications second of all China has incredibly low wages so they can mass-produce products far cheaper and more efficiently than any individual seller on Etsy now if you look at etsy's terms of service they technically allow production Partners alon's all handmade items are made or designed by you and mass produce items have been on Etsy for a long time now but you haven't seen anything yet once Chinese factories start selling Direct on the platform it is going to flood the marketplace with cheap Mass produc products now I have to be careful what I say here but let's just say that sellers in China have a pension for breaking the law the culture is just different over there and they will do whatever it takes to maximize their sales I've interacted with many Chinese sellers in the past I've seen rampant piracy on Amazon eBay and other marketplaces and let's just say that it's going to happen Etsy already has a copyright problem with the tiny amount of sellers that it has but now the floodgates are open you're going to see Taylor Swift stuff fake name brands the whole gamut and Etsy is going to need to have some strict onboarding procedures in place to fight it and if Amazon's pass was any indication I am skeptical that Etsy will be able to handle it Banning Chinese sellers right now on Amazon is like playing whack-a-mole because they are so far away it's easy for a Chinese seller to have a ton of different accounts if one account gets banned they'll have another one ready to go and trust me the new $15 account setup fee is not going to change anything as of right now Etsy is not doing video interview reviews or any of the stringent checks that Amazon performs for new accounts so waves and waves of Chinese sellers will get on to Etsy breaking copyright and trademark law now don't get me wrong Etsy will do their best to police these accounts but there will be and already is collateral damage through algorithmic account flagging if you look at the forums and Etsy groups many Etsy sellers have been recently banned for seemingly no reason whatsoever one YouTuber named Mata recently had her account banned after 3 years of being a seller on Etsy and having hundreds of sales and great reviews there are countless stories like this in the Etsy Community all you have to do is perform a simple Google search by the way if you're enjoying this video so far make sure you sign up for my free 6-day e-commerce mini course below that will teach you how to fight Chinese sellers now the next thing that's going to happen is that the sheer number of Chinese sellers will dilute the entire Marketplace making it much harder to gain visibility with your products today over 50% of the top sellers on Amazon are Chinese sellers and mark my words this exact same thing is going to happen to Etsy both legal and illegal products will be sell on Etsy from China for impossibly low prices and pull buyers away from existing sellers who have similar legal products that are actually handmade and it's the illegal products that will likely hurt sellers the most even though Etsy will do their best to ban illegal Sellers and products the illegal Etsy listings will generate sales for months before they are taken down regardless of these banss new Chinese sellers will pop up immediately selling the same illegal products and it's going to get out of control as we all know the Etsy algorithm is based on a quality score which is determined by your sales Chinese sellers will compete very aggressively based on price which will leech away quality scores and sales from existing Etsy sellers now don't get me wrong I hope I'm wrong and that Etsy will have all this under control but this is still a huge problem on Amazon even after many years and Amazon has far more resources than Etsy to fight this problem the next point that I want to bring up is that Chinese sellers have a huge advantage over existing sellers in terms of prices taxes customs duties basically everything first off Chinese sellers can ship their products directly from China without having to pay sales tax or customs duties due to the Dom Minimus rule the Dom Minimus rule states that a seller does not have to pay import duties If the product being sold is under $800 since most Etsy products fall way under this amount Chinese sellers in Etsy won't have to pay any import taxes in contrast most existing Etsy sellers are getting their raw materials from companies in the US where all the taxes and Duties are already baked in and for the existing Etsy sellers importing from China they are likely importing containers of goods and paying taxes and tariffs on their products the other huge advantage that Chinese sellers have are low labor costs with the floodgates open Chinese factories will start selling Direct on the Etsy platform at rock bottom prices that no Etsy seller will be able to match just imagine a mom and pop shop selling handmade mittens competing against a factory in China paying their workers onet the wages in the US it's just not going to be a fair fight now you might think that shipping from China will be slow and expensive but that's actually simply not the case anymore right now timu is killing it in the United States and they are able to offer free or cheap shipping to the US with delivery times of between 4 to 15 days now in case you've never heard of teu teu is a relatively new Online Marketplace that sells m produced merchandise direct from China at dirt cheap prices now because of the current state of the economy lowcost shopping sites like timu are rapidly gaining market share in fact in just one short year timu was already getting onethird the shopping traffic of Amazon even though packages take a little longer to arrive it hasn't affected timu sales and the same Chinese sellers on timu will eventually come onto the Etsy platform now the final nail in the coffin is that the sheer number of sellers will greatly reduce the visib ility of existing products right now there are about 10 million sellers on Amazon and about 6.3 million are Chinese sellers right now there are about 7.5 million sellers on Etsy if those 6.3 million sellers come to Etsy the seller pool will essentially double and that's not even counting the number of product listings which will grow exponentially because Chinese sellers will be far more aggressive than the average Etsy seller the listing pool could be diluted by 10x or more now having B battled against Chinese sellers in the past on Amazon I can definitely say that Chinese sellers are willing to take lower margins they have a cost advantage and they have an advantage in shipping costs as well anyway that's just my two cents on the Etsy situation but before we jump to any conclusions let's just review the facts Etsy has added China to Etsy payments they've not made a formal announcement yet and hasn't been 100% confirmed that Chinese sellers are going to be able to sell on the Etsy Marketplace but let's be realistic abysmal earnings for the the past three years means that Etsy needs to do something to boost shareholder value when a country is added to Etsy payments that country is going to be selling on the platform for a country the size of China and how aggressive they are at selling on Amazon new Chinese sellers will exponentially increase the seller base and listing base on Etsy more sellers on Etsy means less visibility and exponentially more competition now if past performance on Amazon is any indication there's going to be rampant piracy trademark and copyright infringement on the platform that Etsy will have to fight algorithmically Etsy will do their best to fight the bad actors and many innocent sellers will get banned in order for all this to work out in the long run Etsy will have to do many things right with a pool of resources that is far less than Amazon right now the rules for selling on Etsy are that all handmade items must be either made or designed by you Etsy store owners are permitted to sell produced Goods under certain conditions now with Chinese factors into the mix the lines between handmade products and factoring mass-produced products are about to get even more blurred the Chinese have a cost Advantage they have a shipping Advantage they have a production advantage and it's easier for them to break the laws with impunity now overall I'm not saying that it's game over for Etsy but it's going to get a lot harder meanwhile on the periphery sites like teu are flooding the market with cheap Chinese Goods which puts further pressure on Etsy sellers now I want to hear what you have to say on this get into my comments let me know how you feel about China's likely return to the Etsy Marketplace is it a good thing is it a bad thing let me know what you think now that you know what's happening with Etsy make sure you watch this video here on what Chinese sellers like timu are doing to Amazon sellers history tends to repeat itself it's inevitable

Channel: MyWifeQuitHerJob Ecommerce Channel

Views: 11,254

Keywords: etsy shop, sell on etsy, selling on etsy, etsy store, etsy business, make money online, make money on etsy, how to make money online, temu, chinese sellers, online business, etsy print on demand, etsy digital products, temu app, how to sell on etsy successfully, temu story, temu shopping, etsy shop for beginners, how to sell on etsy 2024, etsy shop for beginners 2024, online business ideas 2024, what is temu, how to start an etsy shop, how to sell on etsy for beginners

Id: LKA-y6gm81A

Length: 11min 20sec (680 seconds)

Published: Sat Apr 20 2024