Some Etsy members were concerned that the new allowance for manufacturing would change the character of our community. We’re right there with you — that’s why we decided to create an application process and we’ve been very selective about who we’ve approved. So far, we have approved less than 50% of applications reviewed. (Applications may be rejected if they did not demonstrate authorship or responsibility, but also pertinence, for example describing a hypothetical new product or disclosing information about where supplies were purchased.)Reaction 1: If a majority of the applications you received were filled out out of confusion (i.e. "disclosing information about where supplies were purchased"), that's not you being "selective," that's your userbase being confused (or your standards misleading).
Reaction 2: Etsy seems to be completely deaf to the real concerns about outside manufacturing: resellers. I don't care about your guidelines for handmade, Etsy, or how many applications you have sellers fill out. If you have 20 new staff members going over applications for outside manufacturing, they're not doing half the good they could be doing were they devoted to going over flagged items and reseller accusations. (It would also be great if people were allowed to call out resellers in the forums, but I guess I understand the reasoning behind that rule.)
I think out of all my reactions this is the most important one: Etsy can't (or won't) understand the concerns of a majority of its users. They're still not getting it. Now their not getting it is throwing a whole bunch of t-shirt designers and print-makers under the bus.
Reaction 3: Someone in the Etsy thread devoted to the clarifications on outside manufacturing suggested that if you need outside manufacturing to do the work you used to do—like if I hired small children with nimble fingers to do the bead stringing I used to do but still according to my designs—maybe you've outgrown Etsy. I'm inclined to agree.
As a smalltime seller, I can't help but wish that the top 10% or so of shops would disappear and set up house under their own names on their own websites. I think it would do a lot to level the playing field and give people who are just starting out, or who haven't been quite as lucky, the chance to get noticed.
Reaction 4: Of course, some of this is definitely sour grapes. Some Etsy sellers list items that are instant best sellers and they manage to turn their craft into a viable business over the course of just a couple of years and I guess a small part of the "do what you love" culture rubbed off and made me think I could do it, too. Lesson learned, I suppose: just having a niche item isn't enough.
Life is hard, yo.