Emily Olson, a stay-at-home mom in Boulder, Colorado, made more than $40,000 selling custom puppy portraits on Etsy in 2021. Her watercolors of corgis and malamutes in mini-tuxes sold for between $75 and $300 each. She had 180,000 followers on YouTube. In 2022, her sales dropped by 30 percent. By 2023, they had fallen another 50 percent.
The shift in sales
Olson noticed competitors flooding the platform. She found copies of her work on drop-shipping sites like Alibaba. AI-generated pet portraits began appearing in search results. These images sold for a fraction of the price. Buyers left great reviews for the AI work. They did not know or care who made it. Olson says people were eating up the images.
In January 2025, she posted a video on her YouTube channel titled “Etsy Was Great … Until It Wasn’t—Why I’m Walking Away.” She stated that the platform no longer aligned with her values. She felt Etsy had become a giant corporation chasing profits above all else.
A new marketplace
Longtime sellers are migrating from the platform in large numbers. They are frustrated with policies they feel are lax. Fybe, a new online crafts marketplace, will open to vendors on August 1. It explicitly prohibits AI-generated content and drop-shipping. The site will rely on volunteer moderators and direct conversations with sellers to ensure all products are human-made.
Rachel Powell, the founder of Fybe, says both buyers and sellers on Etsy are a little discontented. She noted that a platform with human moderation could fill a very real need in the community.
On the subreddit r/EtsyCommunity, dozens of threads from angry sellers gripe about declining sales. One user referred to the influx of unlabelled AI work as “AI-generated slop.” One post concluded that every maker is basically screaming into the void about it, and Etsy does not seem to care.
It is not just mass-produced mugs or T-shirts. Buyers have been inundated by AI-generated listings for crocheting patterns, hermit crab pools, and medieval suits of armor. Longtime vendors say the hand-crafted aesthetics once prized by the platform are disappearing. This is due to a burgeoning market of online entrepreneurs promoting Etsy as a place for AI-driven side hustles.
Chloe Rose, an artist and content creator who sold stickers and original watercolors on the platform, says the whole AI side of things has really hampered Etsy for sellers. Viktor, a UK-based illustrator who has been on Etsy for 10 years, says his sales have decreased by 98 percent over the last year alone. He attributes this to people using the platform as an easy way to make a quick buck. He says potential customers are turning away from actual artists.
Company figures
Since 2021, the company’s gross merchandise sales have declined. Analysts have attributed this to increased competition from sites like Temu and Shein. In late 2023, it laid off 11 percent of its workforce. Etsy has approximately 5.6 million sellers, according to a 2025 transparency report. It generated $2.8 billion in revenue last year, a 2.7 percent increase from 2024.
Policy and enforcement
As part of Etsy’s 2024 announcement allowing sellers to use works made with AI, the platform prohibited users from selling their own customized AI prompts. Sellers must disclose if they used AI in product listings. But this mandate is not strictly enforced. Etsy is largely unresponsive to complaints about AI content regulation, according to Etsy sellers who spoke with WIRED for this story.
Olson says the platform even flagged her own products as copies of other vendors’ works. Her artworks were wholly original. Her efforts to reach a customer service representative were unsuccessful. She says they are not easy to work with, at all.
James Ossman, vice president of customer operations at Etsy, told WIRED the company knows how deeply sellers care about protecting human creativity. He said Etsy is the marketplace for goods made, designed, handpicked, or sourced by real people. This includes original works created by sellers who may use AI as one of many tools in their creative process. Ossman added that enforcing the company’s standards regarding transparency and AI is complex, and he knows there is a lot more work to do. He said the company is continuing to improve its ability to detect and remove listings that do not belong on Etsy.
What it means
Olson has pivoted to Shopify, though she says sales there have been disappointing as well. She notes it is definitely harder to sell on your own website than on communities like Etsy.
Given the rising popularity of AI slop across platforms, there are larger, more uncomfortable questions artists like her have to wrestle with. There is a question about whether there is even a future for handmade or crafted products in general. A hand-painted watercolor of a shih tzu will have a different, more rough-hewn quality than a slick AI-generated portrait. But do consumers even care about the difference, particularly when the latter is so much cheaper and more accessible than the former?
Olson says face it, art is a luxury. With all this economic uncertainty right now, it tends to be one of the last things people want to spend money on. She has empathy for people who do not buy hand-painted works of art. She also thinks people will always want to seek out things of beauty that are made by real people.
