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Nonprofit hoping for ‘win-win’ with Etsy

Thursday, July 3, 2014
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Last fall, when Etsy, the online marketplace for handcrafted and vintage goods, announced new rules that would allow its registered sellers to partner with manufacturers, some worried the company was selling out.

After all, how could something “handcrafted” be “manufactured”?

But Brooklyn-based Etsy stuck with the changes and now is getting an assist from a local group. FuzeHub, an Albany nonprofit that works with small and mid-sized manufacturers across the state, will kick off a pilot project next week to gauge the needs of Etsy sellers and see whether New York manufacturers might help.

“This could lead into something that could be exciting,” said Laura Mann, executive director of FuzeHub.

The group is a kind of matchmaker for smaller manufacturers, helping them connect to needed technology, research and engineering resources in the state. For a “green” diaper company, for instance, FuzeHub helped secure a grant for equipment; for an energy materials firm, it helped find an engineer to design a ventilation system for new production space.

The same likely could occur with Etsy sellers, who by comparison are tiny “makers” — often one-person shops — that might benefit from the right combination of resources and connections.

“We see ourselves as an intelligence store,” Mann said of FuzeHub.

Etsy was founded in 2005 as a platform for artisans to show their wares to buyers who wanted to support an ethos of small and hand-made. Today, the company has more than 1 million registered sellers worldwide; gross merchandise sales totaled $1.35 billion last year.

Sellers set up a “shop” on etsy.com and pay the company 20 cents for each item listed and a 3.5 percent commission on each item sold.

When Etsy changed its guidelines to allow sellers to contract with manufacturers to produce goods, it did so with an eye to helping those who wanted to “scale,” or grow larger. (The new rules also allow sellers to hire workers and to outsource order shipping.) Concerns were raised, though, that resellers would pour in, elbowing out producer-sellers. But Etsy set up a new level of review: Sellers have to show they’re keeping to the founding principles of “authorship, responsibility and transparency”; manufacturers have to meet “ethical expectations” of humane working conditions and sustainable production practices.

Mann said FuzeHub had no position on the Etsy changes. She said the two came together when Etsy mentioned to a contact at Empire State Development Corp. — New York’s economic development arm — that it was interested in learning more about its sellers. The state had a hand in formally launching FuzeHub last year and knew the group worked to connect businesses to available resources.

For Mann, the icing on the cake would be if Etsy sellers looking to engage a manufacturer could be pooled to create a “small-batch” production opportunity for an underutilized New York plant.

That would be “the top in win-win,” she said.

 
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