Etsy sellers say AI-made listings are pushing out handmade work

In short: More Etsy sellers say their sales are falling as AI-made and mass-produced listings flood the site, and some are moving to new marketplaces.

What's going on

Etsy built its name on handmade and creative goods. But many longtime sellers now say the platform is crowded with mass-produced items, copied designs, and AI-generated listings. AI-generated means an image made by a computer system from text instructions, like asking a machine to “draw a corgi in a tux.”

One seller, Emily Olson, started selling watercolor pet portraits on Etsy in 2017. She says she made over $40,000 in 2021, then saw sales drop in 2022 as copycats and cheaper AI-made pet portraits began appearing in search results. Olson says her sales fell 30 percent in 2022 and another 50 percent the next year, and she posted a YouTube video in January 2025 explaining why she is leaving.

Other artists report similar problems. One UK illustrator told WIRED his sales dropped 98 percent over the last year. On Reddit, sellers and buyers complain about AI-made listings that are not clearly labeled, including for things like crochet patterns and other niche items.

Etsy said in 2024 it will allow AI-generated art if sellers disclose it, but it bans selling AI prompts. Etsy executive James Ossman told WIRED that enforcement is complex and that the company is working to better detect and remove listings that do not belong on Etsy.

What to watch

New competitors are trying to win over frustrated sellers. Fybe, a new crafts marketplace opening to vendors on August 1, says it will ban AI-generated content and drop-shipping, which is when a seller lists items they do not actually make and ships from a third party (like reselling from a warehouse). The big question is whether buyers will keep paying more for human-made work, or choose cheaper AI-made alternatives.

Source: Wired