Etsy Is Reining In Brick-and-Mortar Ambitions, Alienating Sellers

Natalie Jacob has been selling jewelry on Etsy Inc. almost since its founding more than a decade ago. As Etsy grew, so did her business, until she could afford to do it full-time. So when the company started Etsy Wholesale to link sellers with brick-and-mortar retailers looking for one-of-a-kind goods, Jacob jumped at the chance. Etsy Wholesale even got her jewelry into Macy's flagship Herald Square store in New York during the holiday shopping season.

Then, about six months ago, Jacob and other Etsy merchants noticed mysterious changes to the wholesale service. Their emails to customer support started going unanswered. A popular Instagram account run by Etsy featuring merchants’ products went dormant and has since been deleted. Etsy stopped updating the Wholesale site.