Above photo: Ahmet Kurt / Unsplash+.
One year ago, after joining a strike against Etsy, these artists created their own cooperative online platform for artisans – currently in beta.
In 2022, Etsy’s earnings topped $109 million in consolidated net income. “Despite significant macroeconomic headwinds, we maintained the vast majority of our pandemic gains and delivered double digit revenue growth and excellent profitability for the year,” Etsy CEO Josh Silverman said in a press release.
Days later, Silverman announced that the marketplace platform would raise the transaction fee Etsy takes from each sale from 5% to 6.5%. In response, some 14,000 Etsy sellers closed their shops and went on strike for eight days.
During that time, Etsy merchants began discussing potential alternatives to the platform. One group’s conversations migrated to the chat platform Discord, where artisans began envisioning what a better digital marketplace could look like. They imagined a platform where makers could have ownership of the marketplace, and where handmade items could be verified so that buyers could know whether they were buying something authentic or a drop-shipped rip-off of someone else’s creative work.
“We started to envision building a better marketplace experience not just for artisans but also … to develop an organization that’s really staked in the economic and creative livelihood of artisans rather than maintaining a stock portfolio or hitting milestones related to external stakeholders in Wall Street,” says Mastress Tara, a participant in these early conversations.
The result was the October 2023 beta launch of the Artisans Cooperative, a member- and supporter-owned co-op marketplace for handmade wares. Today, the cooperative has several hundred members and supporters.
The coop uses a points system for ownership buy-in. Members can take a traditional cash equity route for makers that consists of a $1,000 contribution that can start with as little as $10 down. For supporters, it’s a $100 buy-in also with $10 down.
But money isn’t the only way in. Selling or buying on the platform uses a points system where one point equates to $1. Committing time to the endeavor by participating on a team that helps run the cooperative is another way in.
Now in its second beta phase, it’s focusing on member feedback and honing the site to best suit member-seller needs while developing an internal structure to house that cooperative work. This kind of iterative, try-then-refine-as-you-go approach has been key to the cooperative’s establishment and success which has relied on support from a variety of sources, from other cooperatives to the USDA.
“The first thing it took was a sense of unity,” says Tara, now a board director and team service co-lead. “There were a lot of decisions to be made and a lot of different pathways that we could take, so understanding where we were unified and what was really important to all of us was primary to be able to get anywhere.”
The group became a member of the Start.coop incubator, which works to scale cooperatively owned businesses and provided $10,000 in seed money to help cover the costs of incorporation in Oregon. “They really helped provide some informed and structured guidance through the process of deciding how we want to model the ownership of the business,” Tara adds.
Artisans Cooperative was also helped by grant funding from the USDA’s Rural Cooperative Development Grant program; according to a 2015 Etsy demographics report, 39% of U.S. Etsy sellers were rural, as compared to 21% of the general population. Through the U.S. Federation of Worker Cooperative that facilitated the program, the USDA funding helped the Artisans Cooperative set up its governance structure and craft its business plan.
“We’ve had the capacity to develop our internal processes and really identify what the next level of scaling is,” Tara says. “For us, that means making the marketplace more functional and being able to have all the features necessary for you to run your business on there if you want to use it exclusively as your platform of sale.”
While the Artisans Cooperative has enjoyed the success of going from idea to reality and growing in the direction they’d like, Tara is candid about how difficult it is to go through the processes of setting up a cooperative and working cooperatively day in and day out.
But the process and experience that they’ve gone through is what’s to be expected when starting a cooperative, according to Andrew Delmonte, executive director of Cooperation Buffalo, a nonprofit that helps fund and create cooperative businesses in the area.
“The thing that we really spend a lot of time on with folks is how to work together, how to make decisions together, how to navigate the implicit power versus the explicit power that might show up,” Delmonte says. “The realism of this is that it’s not easy because everything else in our lives is structured in a certain way” — that is, top-down.
Delmonte is excited by the kind of mixed-ownership model that the Artisans Cooperative is using. “We’re seeing this emergence very recently of more of these multi-stakeholder models of cooperative where there are several kinds of owners all participating collectively in the ownership, the decision making, and the wealth building. It’s a kind of new frontier in some ways.”
The assistance that Cooperation Buffalo offers in transitioning to cooperative ownership is available nationally, including through networks like Seed Commons.
“At the heart of it, it’s just how we want to organize ourselves to do the things that we need to do for each other, for ourselves,” Delmonte says. “When we take that back, we realize, oh, we could own these businesses, we could make these decisions about what hours we work because it’s just us managing our lives.”