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text｜ahyou

editor｜chen meixi

in 2005, in an apartment in brooklyn, new york, three young people were gathering together to discuss a business plan.

the young man in charge is named robert kalin, who just received a bachelor's degree in art from new york university the year before. his father is a professional carpenter, and he has become an amateur carpenter since he was a child.

previously, kalin had made a see-through computer case using oak wood and transparent boards. this kind of computer case where the structure of the computer host could be seen was not common at the time. kalin could never find a suitable idea for selling this idea on the internet. platform for hand-made chassis.

so, an idea flashed in his mind: why not create an online platform specifically for trading handicrafts?

kalin immediately called his friends chris maguire and haim schoppik. with the efforts of the three people, on june 18, 2005, the e-commerce platform etsy was born.

although there were already e-commerce giants such as amazon and ebay in the united states at that time, etsy was deeply involved in the vertical market of handicrafts, and its distinctive features helped it gain a firm foothold.

in the first 10 years of this platform, it provided a large number of craftsmen with online sales space and money-making opportunities, and the craftsmen also supported etsy's initial profits. when etsy went public in the united states in 2015, its valuation had grown to $1.8 billion.

now, nearly 10 years later, etsy has become the preferred platform for many americans to buy gifts.

as of after-hours trading on september 26, etsy’s market value had reached us$63.97, equivalent to approximately rmb 44.85 billion. but some changes are happening: in the past two years, with the popularity of aigc tools, a large number of virtual products generated by ai have appeared on etsy.

what does it mean when a handicraft trading platform begins to be occupied by ai-generated content?

virtual product "invasion"

if you are interested in cross-border e-commerce or want to develop a side business, you may have frequently seen content like this on social platforms recently:north american side business, selling virtual products on etsy at zero cost.

if you go back further, you will find that similar videos appeared on youtube, a foreign video platform, more than a year ago. entrepreneurship mentors in the united states sensed opportunities earlier, and joshua mayo, who has 830,000 subscribers, is one of them.

joshua has created many videos on how to start a side hustle and become a millionaire before the age of 30. in a video titled "6 products you can generate using ai," he listed six categories of clip art, virtual backgrounds, digital greeting cards, wedding invitation templates, product mockups, and graffiti that have already been sold on the etsy platform. sell ​​virtual products with high profits.

joshua told his fans firmly that by using midjourney to generate images in a few seconds and then selling these products in his etsy shop, he could earn an additional $29,540 per month.he believes that ai is a way to help ordinary people enter the million-dollar market: “you can even ask the ai ​​directly in chatgpt to provide you with 10 ideas for selling products on etsy, and the ai ​​will list feasible items for you. list."

when the news spread to china, the content of the sideline tutorials circulated on social platforms became more detailed. from how to register an etsy store, to how to determine product categories, to how to improve seo, facing a sales channel that is relatively niche in the eyes of domestic merchants, people have higher expectations for the economic returns it may bring.

more importantly, the process of ai generating virtual goods can be regarded as almost cost-free. consumers can directly download pdf files after purchase, and merchants do not need to pay logistics costs.even after deducting the transaction fees charged by the platform, the profit margin of virtual goods can reach more than 70%.

for businessmen who only want to make money, this number is hard not to be exciting, and etsy has gradually been "invaded" by virtual products on a large scale.

open the etsy platform, enter "ai" in the search bar, and you can see all the virtual products generated by ai. most of them are personalized pictures created through the "wen sheng tu large model", such as animated pet images, including a large number of puzzles. material packages with patterns, customized ai virtual avatars, etc.

most virtual goods are priced in the range of $1 to $20.but it is not ruled out that some virtual goods that incorporate customer customization needs can even be sold for around us$90., you must know that midjourney’s most expensive professional version membership fee is $60 per month.

among many ai-generated virtual products, those with the keyword "ai" clearly marked in the product details are considered conscientious merchants; some merchants will choose to conceal it in order to sell better prices and sales; and some merchants are in the virtual product market. under the tide, playing the role of peddling shovels during the gold rush.

for a while, pdf tutorials on etsy that taught others to use ai to generate virtual products were also very popular. document products such as "5000 ultimate chatgpt prompt words" and "800 ai-generated artwork prompt words" were emerging one after another.

steven hornyak, who works as a teacher, started using his free time to sell virtual products on etsy last year, mainly selling chatgpt and midjourney prompt words organized into documents. in an interview with foreign media,steven revealed that this side business can bring him an extra $300 a day.

if we stop here and no longer understand the origins of the etsy platform, based on the information circulated on domestic social networking sites, people can easily think that this is a trading platform that has just become famous under the trend of ai. merchants have successfully made money on etsy with virtual products. lee's story will also be classified as "a wealth opportunity in the new era."

and once you know that etsy's consistent declaration is to "provide a place for people who love handmade products to trade and communicate" and that it was once a paradise for independent handicraft makers and antique collectors, the other side of the story begins to emerge.

the battle between ai and handmade

after logging into etsy again after many years, hall, a former merchant, was shocked by what he saw.

etsy's webpage is already filled with virtual products, and there are more than 2,000 shops related to ai-generated content. he even wondered whether he had logged on to the wrong website.

on the social forum reddit, hall posted a post titled "etsy should ban ai as soon as possible", complaining about how ai has taken over his business.

about 15 years ago, hall sold original illustrations and shirts on etsy, and the sales were pretty good. but after hall found a full-time job that took a long time, he gave up his e-commerce business on etsy. now, 15 years later, hall once again has plenty of free time and is trying to continue selling his original art on etsy.

he spent 3 days designing and displaying his original products, hoping to receive 50 orders before christmas, but found that his original paintings were buried in the flood of virtual products:"not every consumer will be able to discover these original items among the 'noise.'"

in the limited natural traffic pool of a single platform, while aigc products are becoming popular, the living space of traditional handicraft creators is bound to be squeezed.

naturally, those who have been hardest hit are sellers who sell hand-painted paintings on etsy. when ai-generated drawings can deliver works as quickly as possible and complete transactions at the lowest prices, sales of a large number of original paintings have continued to decline since the end of 2023. jane has been selling paintings on etsy since college. because her sales were very good, she took running an etsy store as her full-time job after graduation. however, her store sales have dropped by more than 50% in the past two years.

the decline in income has forced handicraft creators to migrate to other platforms, such as amazon, wix, squarespace, instagram, pinterest, etc.

but the more fundamental issue is that if sellers’ income drops, they can choose to change platforms and start over. but how can handicraft enthusiasts make up for the feelings they have lost on etsy?

the contradiction and competition between ai and painters is no longer a new topic. the fear that aicg will threaten their jobs is also a common concern of painters around the world. but what’s even more chilling and unacceptable about etsy is this – can’t even the platform originally created for handmade artists be regarded as the last private land in the ai ​​era?

as ai invades etsy, the original ecology and beliefs of the platform are destroyed, and the "aboriginal people" feel stung.

"handmade" was once the most important and distinctive label of etsy. handmade people on the platform use their own hands to shape the inspiration in their minds into entities. in the process of ai generating virtual products, how much involvement of human hands does it have? how many are there?

can ai-generated artwork be regarded as the seller’s original design? if cheap ai-generated art becomes rampant, do original works full of human handicrafts deserve to become marginalized in the fierce e-commerce competition?

sellers and craft enthusiasts continue to ask questions on the etsy forum, and the voices of confrontation between the two groups are becoming clearer.

handmadeguardian：while ai-generated virtual artwork meets consumer needs efficiently and conveniently, it loses the sincerity and emotion of handcrafting. handicraft creators use their sincerity and time to give products a unique soul. using aigc to assist in generating products is simply a kind of "cheating".

aigc advocates:the process of ai generating products is also inseparable from people's input of keywords. if they want to generate an eye-catching design, people have to constantly input and adjust, and integrate their own thinking and aesthetics. ai is just a tool. if it can help people turn ideas in their minds into products more quickly, then there's nothing wrong with it.

the key to the ongoing debate is that if the concentration of human creation in handmade products is 100%, then what proportion of the virtual products generated by sellers using ai are occupied by human creation?this itself is an indicator that is difficult to quantify, and naturally it is impossible to discuss what is a reasonable criterion.

but no matter what, etsy sellers at least reached a consensus: the platform should respond to this.

the "changed" platform

this summer, after a long period of thinking, the platform finally gave its answer.

etsy has updated the classification method for all products on the platform and proposed four major categories, namely:

made by a seller, physical handicrafts manufactured by the seller, if there are production partners, must be disclosed;

designed by a seller, a product designed by a seller can be either an original design by the seller or a virtual product generated by ai.ai-generated products must be marked in the details；

sourced by a seller, handicraft making materials, party decoration supplies, etc. provided by the seller;

handpicked by a seller, products carefully selected by the seller, such as antiques, collectibles, and natural products such as crystals and fossils.

the new rules represent etsy’s position. after carefully considering the complex issues of aigc virtual products, the platform decided to allow sellers to use aigc to design products.

in the "seller manual", etsy explains in detail: "sellers can use ai tools to create artistic content combined with prompt words entered by themselves." the platform recognizes that virtual works that incorporate human inspiration are also original, but sellers must be open and transparent it tells consumers that the content is generated by ai.

at the same time, ai prompt words organized into documents or content generated directly using existing prompt word templates are not allowed to be sold on the etsy platform. such products are not included in the scope of original handicrafts.

it is obvious that etsy still compromises on ai to a certain extent.

some foreign media commented that etsy has abandoned its most distinctive features and gradually become no different from other e-commerce platforms. the verge even wrote sharply in the title: "etsy lost its 'handmade' and 'antique' labels in the process of challenging amazon and temu."

but if you look at it from etsy’s perspective,how can we miss the opportunity of an era that is expected to form a new platform label under the ai ​​wave and reap the dividends of ai virtual product trading?

in fact, in the nearly 20 years of platform history, etsy has relaxed its restrictions on handmade more than once.

in early 2013, etsy acquired lascaux co., a mobile device development company, and that same year allowed sellers to sell handmade items made by outside production partners. this was etsy's first major change to handmade's values, and the effect of this change was very significant. etsy's sales that year increased directly from us$895 million to us$1.34 billion.

later, during the 2019 epidemic, etsy once again allowed sellers selling fabric masks to sign cooperation with clothing factories. since then, in 2020 and 2021, users' online consumer orders have surged due to the epidemic, and etsy's sales have increased to three times what they were before the outbreak.

as a listed company that needs to continue to expand and make profits to maintain its market value, etsy chooses to put down its obsession with handmade, which is both helpless and necessary.

etsy is also working hard to embrace ai in the product search function within the platform.

earlier this year, etsy launched the ai-powered “gift mode” in an attempt to help users filter out those that more closely match their needs among the more than 100 million items on the platform. at the end of august, etsy once again upgraded the search function of the platform. chief product officer nick daniel firmly believes that improving the search function can better match buyers and sellers, allowing people to get the goods they want and rebuild trust.

in september, etsy announced the launch of the etsy insider program, providing free shipping services to member users. whether in product category or consumer experience,etsy is learning to expand steadily like a more mature e-commerce platform, and it is willing to "revamp" it to this end.

in 2005, when it was time to name the platform, the first thing that came to founder kalin's mind was the italian word "etsi" often said in the movie "eight and a half", which means "oh, yes."

in latin, "etsi" means "if". to a certain extent, this name gives etsy the courage to constantly try various possibilities, as etsy's current ceo chad dickerson said: "creation is change. "

when technologies such as 3d printing, robots, and ai have truly impacted people's lives, etsy has timely extended the scope of "handmade".

the story is not over yet.

the wheel of the times is rolling forward. between change and stability, no matter whether it is sellers, consumers or platforms, no one is holding a balance beam and walking cautiously on the tightrope.

references:

1、AI-Generated Junk Is Flooding Etsy，The Atlantic

2、Etsy loses its ‘handmade’ and ‘vintage’ labels as it takes on Temu and Amazon，The Verge