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Chinese sellers are officially back on Etsy. Etsy quietly added China to its approved Etsy Payments country list in mid 2024, and that single administrative change is the marketplace equivalent of rolling out the red carpet for 1.4 billion new potential sellers. On this solo episode of the My Wife Quit Her Job podcast I broke down exactly what to expect, and this post is the fully organized version of that breakdown for anyone who sells on Etsy in the US.
Etsy sellers should assume history is about to repeat itself. Amazon opened its platform to Chinese sellers in 2016 and it took years of stricter onboarding, video interviews, utility bill verification, and constant seller pushback before things stabilized. Etsy has a fraction of Amazon’s resources to police the flood.
Below is what changed on Etsy, why Chinese sellers have a structural cost advantage on the platform, and what US handmade sellers can do right now to stay visible when the seller pool doubles.
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Table of Contents
Key takeaways
- Etsy added China to its Etsy Payments approved country list in 2024. That is the operational step that lets Chinese sellers list, get paid, and ship, so treat it as the real signal that the return is happening.
- Chinese sellers were on Etsy until 2021, when they were quietly removed to protect the handmade brand. Etsy needs revenue growth (gross sales slipped from $13.49B in 2021 to $13.16B by 2023), which is why the door opened again.
- Expect a repeat of the 2016 Amazon playbook: a flood of new accounts, rampant trademark and copyright violations, and Etsy scrambling to build stricter onboarding after the fact.
- Chinese sellers ship direct from China under the $800 de minimis threshold, so they skip import duties and sales tax. US sellers already paid duties on their raw materials.
- Around 50 percent of top Amazon sellers are already Chinese. If a similar share moves onto Etsy, the seller pool roughly doubles from about 7.5 million and product visibility collapses for everyone else.
- Etsy’s $15 account setup fee will not slow this down. Amazon tried the same, and Chinese seller networks routinely spin up new accounts whenever old ones are banned.
What did Etsy actually change with Chinese sellers?
Etsy added China to its Etsy Payments approved country list, which is the technical prerequisite for Chinese sellers to open shops, receive payouts, and process orders on the platform. Etsy has not made a formal announcement, so many sellers have not noticed, but adding a country to Etsy Payments is functionally the same as opening the door.
Chinese sellers used to be on Etsy up until 2021, when they were silently removed over concerns about protecting the integrity of the handmade marketplace. From an Etsy financial perspective, letting them back in unlocks a market of 1.4 billion new people almost overnight.
The financial pressure is the driver. Etsy’s gross sales went from around $13.49 billion in 2021 to $13.16 billion in 2023, and shareholders want growth. Bringing China back is the fastest way to inflate seller count and listing volume without changing the product.
Why did Etsy remove Chinese sellers in 2021?
Etsy removed Chinese sellers in 2021 because the marketplace was being flooded with knockoffs, stolen product photography, and factory-made items being sold as handmade. Etsy’s brand identity is built on handmade and vintage, and the influx directly threatened that positioning.
Thousands of Chinese sellers were pulling images from legitimate handmade shops and listing cheap factory versions at a fraction of the price. The cleanup was significant, and it worked for a few years.
The 2024 reopening reverses that decision under financial pressure. The same enforcement problems that caused the 2021 removal have not been solved, only paused.
How Etsy is about to repeat Amazon’s 2016 mistake
Etsy is about to hit the exact wall Amazon hit in 2016 when it opened up to Chinese sellers, which is a wave of new accounts, mass trademark and copyright violations, and no stringent onboarding in place to catch bad actors. Amazon was overwhelmed and spent years building the verification stack we know today.
To open an Amazon seller account in 2024 you have to complete a 10 minute video interview, submit legal identification, and provide utility bills that prove your real address. Etsy currently does none of that at scale. The $15 account setup fee is not a verification system, it is a speed bump.
Because Etsy is smaller than Amazon and has fewer resources, this will play out worse before it plays out better. Bans get issued algorithmically, so legitimate sellers get caught in the crossfire while spam accounts spin up replacements the same day.
The unfair advantages Chinese sellers have on Etsy
Chinese sellers have three structural advantages that no US Etsy seller can match on price alone: no US import duties under the de minimis rule, radically lower labor costs, and much faster cheap shipping thanks to the direct-from-China logistics network Temu and Shein already built. Every one of those advantages compounds on top of the algorithm boost that new listings usually get.
The $800 de minimis rule advantage
The de minimis rule states that a seller does not pay US import duties on shipments valued under $800, and almost every Etsy product falls well under that threshold. Chinese sellers shipping direct to US buyers avoid duties entirely.
US Etsy sellers do not get that treatment. If you source raw materials domestically, the duties and taxes are already baked into your price. If you import fabric, blanks, or components in bulk from China, you pay duties on the containerized shipment.
Labor cost advantage on handmade competition
Chinese factories can produce printed shirts, jewelry, home goods, and craft items at labor rates that are a fraction of US wages. A mom and pop shop selling a genuinely handmade item is competing against a factory paying workers roughly one tenth what an American maker pays themselves.
Etsy’s terms of service already allow production partners as long as handmade items are made or designed by the seller. That gray area is about to be exploited at scale by factories willing to check the box.
Cheap and fast shipping from China
Shipping from China used to be slow and expensive. Temu is now offering free or low cost shipping to the US with delivery windows of 4 to 15 days, and in one year Temu already reached roughly one third of Amazon’s shopping traffic.
The same logistics network powering Temu is available to Chinese Etsy sellers. Cheap and reasonably fast is enough to win the buyer who is comparing a $12 mass produced item to a $34 handmade one.
How Chinese sellers will affect Etsy search visibility
Adding Chinese sellers to Etsy roughly doubles the seller pool and multiplies the listing pool by an order of magnitude, which crushes visibility for existing US sellers. Etsy’s algorithm ranks products by quality score, and quality score is driven by sales, so aggressive low-price sellers win share and then keep it.
There are roughly 7.5 million sellers on Etsy today. Amazon has about 10 million sellers and about 6.3 million of those are Chinese. If Etsy tracks even part of the way toward the Amazon distribution, existing sellers get diluted quickly.
Listings scale even faster than sellers. Chinese sellers tend to publish many more SKUs per shop than the average Etsy maker, so the item pool could balloon 10x while the seller count only doubles.
Trademark and copyright infringement risk on Etsy
Trademark and copyright infringement is about to spike on Etsy because Chinese factories moving onto the platform have a documented pattern of listing counterfeit branded goods, fake celebrity merchandise, and stolen designs. Etsy will fight it, but algorithmic enforcement always produces collateral damage, so legitimate shops will get banned along with the actual bad actors.
Look inside Etsy seller forums and you already see complaints from shops with hundreds of sales getting banned with no clear reason. One example that made the rounds is the YouTuber Matira Made Jewelry, whose Etsy account was banned after three years of selling and hundreds of positive reviews.
Banning Chinese sellers is a game of whack a mole. Because they operate offshore, a banned account is easily replaced with another, and the cost per replacement is trivial compared to the sales generated before the takedown.
Etsy vs Amazon vs Temu for handmade sellers in 2024
Here is how the three platforms compare for a US maker deciding where to compete.
| Platform | Seller verification | Chinese seller share | Duties on imports under $800 | Handmade positioning |
|---|---|---|---|---|
| Etsy | $15 setup fee, minimal ID checks | Growing quickly in 2024 | None under de minimis | Official brand, weakening in practice |
| Amazon | Video interview, ID, utility bill | About 63 percent of top sellers | None under de minimis | Handmade is a small side category |
| Temu | Direct-from-factory model | Overwhelmingly Chinese | None under de minimis | Not a handmade platform at all |
What Etsy sellers in the US should do about Chinese sellers
US Etsy sellers should stop competing on price with factories they cannot beat and start competing on the things factories cannot copy fast: brand, story, custom personalization, real photography, and a customer relationship that lives off Etsy. That is the same playbook that saved handmade Amazon sellers when China arrived in 2016.
Build an email list of your existing buyers so you own the relationship if Etsy visibility craters. Diversify to your own Shopify store or another marketplace so Etsy is one channel, not the only channel. Lean into personalization, made to order, and product categories that ship poorly from China because of weight, fragility, or customs classification.
If you sell truly handmade items, say so in your photography and your listings in a way that a factory cannot fake. Show the workspace, the hands, and the process. That trust signal is what your buyer is paying the premium for.
Frequently asked questions
Are Chinese sellers actually allowed on Etsy again?
Yes. Etsy added China to the Etsy Payments approved country list in 2024, which is the operational step that lets Chinese sellers open shops, get paid, and ship. Etsy has not made a formal announcement, but adding a country to Etsy Payments has always signaled that country going live on the platform.
Why is Etsy letting Chinese sellers back onto the platform?
Etsy is under significant financial pressure from investors after multiple years of declining gross merchandise sales, which fell from about $13.49 billion in 2021 to $13.16 billion in 2023. Opening to Chinese sellers is the fastest way to grow listing volume and seller count without changing the product itself.
Will the $15 Etsy setup fee stop Chinese sellers?
No. A $15 setup fee is trivial for organized offshore sellers and does not include the identity verification (video interview, utility bill, government ID) that Amazon now requires. Chinese seller networks routinely absorb far higher account creation costs on Amazon and eBay.
How did Chinese sellers change Amazon after 2016?
Chinese sellers now make up roughly 63 percent of top Amazon sellers, and Amazon spent years building the verification stack (video interviews, ID checks, utility bill address verification) after being overwhelmed by low quality and counterfeit listings. Even with those controls, counterfeit and trademark enforcement remains a constant issue.
What is the de minimis rule and why does it matter for Etsy?
The de minimis rule lets shipments valued under $800 enter the US without paying import duties, and almost every Etsy purchase falls under that threshold. Chinese sellers shipping direct to US buyers avoid duties that are baked into US sellers’ costs, which is a permanent price advantage of 10 to 30 percent depending on category.
Should I move my Etsy shop to Shopify?
You should build a Shopify store (or similar) as a second channel so Etsy is not your only revenue source, but for most handmade sellers Etsy is still worth keeping for its built-in buyer traffic. The right frame is diversification, so a bad Etsy month or a wrongful ban does not end your business.
Is Temu going to hurt Etsy sellers directly?
Yes, indirectly and directly. Temu has trained US shoppers to accept 7 to 15 day shipping in exchange for very low prices, which sets the price ceiling in categories that overlap with Etsy, and the same Chinese sellers on Temu can now open Etsy shops too.
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