Some longtime Etsy sellers are abandoning the marketplace after years of building shops there, saying the site has become harder to trust as AI-generated listings and copied designs compete with handmade work.
Emily Olson, a Boulder, Colorado, artist who began selling watercolor dog portraits and prints on Etsy in 2017, told WIRED that her shop once brought in more than $40,000 in 2021. Her YouTube audience grew to 180,000 followers as customers bought custom portraits priced between $75 and $300.
Olson said the business started to slide in 2022. She found versions of her work on drop-shipping sites including Alibaba, where the pieces were marketed as original. She also said AI-made pet portraits began appearing above her work in Etsy search and selling for far less. According to Olson, her Etsy sales fell 30 percent in 2022 and another 50 percent the following year.
In January 2025, Olson posted a YouTube video saying she was leaving Etsy. She told WIRED the company no longer matched her values and had become too focused on profit. She has since moved to Shopify, though she said selling through an independent site has also been difficult.
Etsy allows AI art if sellers disclose it
Etsy’s current policy permits sellers to offer AI-generated work as long as they disclose AI use in the listing. In its 2024 policy announcement, the company also barred sellers from selling customized AI prompts as products.
Sellers who spoke with WIRED said the disclosure rule is not enforced consistently and that Etsy is slow to respond to complaints about AI content. Olson said Etsy flagged her original work as a copy of other sellers’ products and that she could not get useful help from customer service.
James Ossman, Etsy’s vice president of customer operations, told WIRED that the company understands sellers’ concerns about protecting human creativity. He said Etsy is for goods “made, designed, handpicked, or sourced by real people,” including original work where AI is one tool in the process. Ossman also said enforcing AI transparency is complex and that Etsy is working to improve detection and removal of listings that do not belong on the platform.
The seller complaints go beyond pet portraits. WIRED cited Reddit threads where Etsy users complained about AI-generated crochet patterns, hermit crab pools and medieval armor listings. Chloe Rose, an artist and content creator who sold stickers and watercolors on Etsy, told WIRED that AI content has hurt sellers. Viktor, a UK illustrator who has used Etsy for a decade, said his sales dropped 98 percent in the past year and blamed users treating the platform as a quick-money channel.
A rival marketplace bets on human moderation
One new competitor, Fybe, is scheduled to open to vendors on Aug. 1. Founder Rachel Powell told WIRED the marketplace will ban AI-generated content and drop-shipping, and will use volunteer moderators plus direct contact with sellers to keep products human-made.
Etsy still has scale that new rivals do not. The company reported about 5.6 million sellers in a 2025 transparency report. Its revenue reached $2.8 billion last year, up 2.7 percent from 2024, according to financial reporting cited by WIRED. At the same time, analysts have linked a decline in gross merchandise sales since 2021 to competition from Temu and Shein, and Etsy cut 11 percent of its workforce in late 2023.
For artists, the fight is not only about platform rules. Olson told WIRED that art is a luxury during economic uncertainty, but said she still believes buyers will seek out beautiful things made by people. Etsy’s problem is that sellers increasingly doubt the marketplace can prove which products those are.
This story draws on original reporting from WIRED.
