Emily Olson, a former Etsy seller, says her sales plummeted by 30 percent in 2022 and 50 percent in 2023, as AI-generated art flooded the marketplace. Her hand-painted pet portraits were increasingly outcompeted by cheaper, AI-made alternatives that sold for a fraction of the price. Olson, who once made over $40,000 annually from her Etsy store, now says the platform has become a corporate entity prioritizing profits over creativity. She posted a video in January 2025 titled: 'Etsy Was Great … Until It Wasn’t—Why I’m Walking Away,' expressing frustration with the platform’s policies and declining sales.
Etsy has allowed AI-generated art since 2024, provided sellers disclose its use, but enforcement remains lax. Sellers report that the platform fails to address the influx of AI-generated content, which is often unlabeled and competes directly with handmade goods. Fybe, a new marketplace launching in August 2025, explicitly prohibits AI and drop-shipping, aiming to offer an alternative for creators concerned about Etsy’s direction. Olson, who now uses Shopify, says sales there are also disappointing, highlighting the broader challenges facing handmade artisans.
The shift has sparked debates about the future of handmade goods. Artists like Chloe Rose and Viktor, who have seen sales drop dramatically, argue that AI-generated content is eroding trust in the platform. Meanwhile, Etsy’s 2025 transparency report shows the platform still has 5.6 million sellers and generated $2.8 billion in revenue, a 2.7 percent increase from 2024. However, analysts attribute declining gross merchandise sales since 2021 to increased competition from sites like Temu and Shein. Etsy’s vice president of customer operations, James Ossman, acknowledged the need for better enforcement but said the company is working to improve its ability to detect and remove non-compliant listings.
Source: wired
