Like Facebook and Instagram, Etsy is currently dealing with an influx of AI-generated sludge. But unlike those platforms, Etsy makes its money putting products in people's hands. It appears the company is trying to get ahead of the problem with new labels to help buyers better differentiate between handmade or vintage goods and AI-generated junk.
In a post explaining new “Creativity Standards” shared today, Etsy CEO Josh Silverman outlined a new requirement for sellers to label their products based on how involved they were in making them. For instance, a hand-knitted scarf would need a different label from a set of stickers produced using AI-generated art.
The four labels include “Made by,” “Handpicked by,” “Sourced by,” and “Designed by,” and sellers can get in trouble for using the wrong one. The first three labels would cover more traditional Etsy fare, like “handpicked” vintage clothing, “sourced” party supplies, or “made” jewelry. It’s the “Designed by” label that’s targeting AI.
While Silverman’s blog post simply says that a product using the “Designed” category must be “designed by a seller,” Etsy’s updated Seller Handbook says that sellers using this label can “use their original prompts in combination with AI tools to create the artwork they sell on Etsy.”
So, while AI isn’t being disallowed, it is being more clearly distinguished. That said, those selling designed work that doesn’t use AI, such as original digital artwork or 3D prints made with an outside production partner, will fall under the same category.
Etsy does say that “Sellers must disclose within their listing description if an item is created with the use of AI,” although buyers will need to click through to see this language. It’s also unclear how Etsy's process for detecting and reprimanding violators will work.
“We’re not allowing new items that we prohibited before,” Silverman’s post clarifies, but one type of AI-associated product is getting the axe: Etsy currently has pages of listings for AI prompts being sold for anywhere from $1 to $200, and it seems like the platform has had enough—a new rule in the Seller Handbook says, “we do not allow items that simply offer packages of prompts.”
Etsy’s handmade approach is a big part of what differentiates it from stores like Shein and Temu, so it makes sense that the company would want to put up some guardrails. While the messaging in Silverman’s statement and in the new Seller Handbook is fairly non-confrontational, the large “Keep Commerce Human” banner at the top of the announcement makes the company’s AI frustrations clear.
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