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Top 9 Legal Issues for Etsy Sellers

Etsy, the largest e-commerce host to homemade and vintage goods, allows thousands of individuals to sell their products from a single marketplace. In 2010, Etsy sales increased by over 74% from 2009 to over $314 million. That figure grew by 71% in 2011, when $537.6 million worth of goods were sold through Etsy. The perks to using an Etsy store instead of a personal website for a craftsperson’s online shop are many; the notoriety, popularity (1.32 billion page views in April 2012), growth, and search capabilities of Etsy arguably make goods easier to find rather than scouring the world wide web. Additionally, the sellers on Etsy are essentially small business owners, and can control the size of their company, or hobby, accordingly.

As many Etsy sellers maintain their Etsy stores as a primary career, the time and effort they devote to their shop operates as the means of income for their families. Coryn Enfinger, owner of the Etsy store Dark Cycle Clothing, says that Etsy sales have grown to contribute 75% of her household income.

“My husband and I owned a screen printing shop prior to opening our Etsy shop, and we were doing our own designs as a side project. I envisioned selling a maximum of a few shirts a week on Etsy. Our transition into selling full time was very surreal; it went from selling an item every few days or weeks to selling 20+ items a day, quite literally overnight.” Almost three years later, Dark Cycle Clothing is one of the top sellers on Etsy.

Etsy is a perfect gateway for craftspeople and suppliers to run their own show, only requiring a computer and internet as overhead business costs. However, maintaining e-commerce businesses come with many legal threats and issues for the owners. The freedom of the internet intrigues many sellers to a seemingly barrier-free realm to sell their products, and often they overlook properly protecting their brand and taking other important legal moves in operating their business.

Working with Etsy, sellers are protected, in some aspects, from many possible legal predicaments. Etsy’s terms of use operate as an agreement for sellers and any other users of the site, and provide legal policies. For instance, Etsy cannot guarantee true authenticity of the sellers, buyers or items for sale, but will step in if issues arise between parties. Parties may file “claims” with Etsy over many issues, including invalid transactions and copying, and Etsy reserves the right to correct problems.

Another top Etsy seller, Cindy who owns the jewelry shop edor, recently found another Etsy seller using one of her original photographs in their shop without Cindy’s permission. “I researched about copyright infringements online and read the Etsy copyright policy and decided I had a good reason to file a complaint through Etsy. The issue is now resolved and Etsy notified the seller and the photo has been taken out of her shop.”

What if Cindy’s photo was being used commercially by a non-Etsy business, could Etsy still protect her rights of copyright? Etsy’s Copyright and Intellectual Property Policy does not make reference to such instances that arise outside of the web site, so Etsy sellers would possibly have to consider consulting an attorney. Interestingly, the interviewed Etsy sellers have never, to date, felt that consulting an attorney with regards to their e-shop was necessary.

Yet, many Etsy sellers do not know their rights when common legal problems arise. Here are the top 9 legal issues Etsy shop owners face:

-by Elspeth Crawford

Thanks to B.A.F.F.L.E.D. for their participation in this post. For additional information and tips on legal matters concerning fashion and business, check out B.A.F.F.L.E.D. The Legal Lessons, Resources and Fashion Law Files should help ease some concerns for rising e-retailers.

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