Etsy online marketplace is known as a place to buy homemade items, clothing, artwork, and jewelry made by individuals or made in small quantities by small businesses. But not everyone who uses the website ascribes this popular philosophy. Others, like Alicia Shaffer, use Etsy like eBay, buying items wholesale from large retailers like Alibaba, and reselling them through the website.
Shaffer claims her ThreeBirdNest business makes her just under a million dollars a year. Shaffer’s store is the second most successful store on the entire site, selling clothing and accessories – socks, headbands, boot cuffs, and T-shirts with slogans like “feed me and tell me I’m pretty”. ThreeBirdNest advertises its products as “handmade boutique” fashion, but Shaffer didn’t come out on top alone. She employs a team of 15 women who help sew some items in her shop. It is controversial that some of the other products are bought wholesale from retailers in India.
ThreeBirdNest makes just under a million dollars a year for its creator
Reselling wholesale items is a common practice among sellers on eBay, Amazon, and other ecommerce websites, but Shaffer’s business model has been criticized by other Etsy sellers and buyers who argue that the site, with its focus on homemade crafts, does not there is room for such tactics. The site’s battle is a battle between handcrafted idealism and breakneck capitalism – despite its charm, Etsy is a marketplace where cute knitted animals compete in a fierce battle for more eyeballs and money.
ThreeBirdNest may not follow Etsy planned philosophy, but it does make money – profit margins for such items are around 65 percent, according to Shaffer versus Fast Co. Design. There are examples with even higher markups: a pair of lace socks appears in their store for $ 28. The same socks can also be found on Chinese retail giant Alibaba’s eBay-like marketplace, Aliexpress, for around $ 6 per pair.
Shaffer puts a large part of ThreeBirdNest’s success on clever marketing. By purchasing cheap wholesale items, using their in-house team to make changes if necessary, and using a mock-up to display them in the US with complementary clothing, the wholesale merchandise goes from cheap socks to boutique must-haves. Certainly, it’s a commercial approach that has allowed Shaffer to climb to the top of the table while others have a more difficult time. Etsy made $ 895 million in 2012 alone, but the distribution of that wealth was uneven: In a 2013 report, Etsy said 65 percent of its sellers said they made less than $ 100 a year in their stores, while the median income for a full business time was $ 44,900 on the Etsy seller’s budget, $ 5,100 below the then national average.