Thursday, May 5, 2011

Why Heartsy is Bad For Handmade

If you have not heard of Heartsy, prepare yourself…it is the newest trend/marketing ploy to hit the handmade market.  Being touted as the “Groupon” of Etsy, Heartsy offers at least 50% off Handmade goods by featured shops within in its site.  A boon for buyers everywhere, as you can imagine, but for sellers, some just break even for the exposure.

[caption id="attachment_6" align="alignnone" width="200" caption="Brigitte Herrod Vintage Button Badge Heart Canvas"][/caption]

So how does it work?  As a seller, you request to be featured and Heartsy contacts you to negotiate a “deal”.  Typically, they ask you to offer a certain amount of a gift certificate for 50% of its value…sometimes it can be even more:
“A bit disappointed. I was contacted about being featured but they wanted me to do $59 GC’s for $19.00. With silver prices through the roof I’d be losing money right off the bat. I had offered $40 for $20 but it was a no go”  --Kristen writes via a comment on Handmadeology

For those that become featured sellers these gift certificates are used as vouchers that buyers pick up and use at your Etsy shop.  Many sellers are pleased at the uptick in traffic to their sites but admit to breaking even or low profit margins on their handmade wares.   In all fairness, a few users do suggest they have had repeat customers that have paid full price after their Heartsy deal has passed.

In the grand scheme of things, I am bothered by the fact that Heartsy makes Handmade goods a commodity to be bartered; removing the artist from the work.  For me, I enjoy supporting another artist for what their work and time is worth; the Heartsy trend just devalues this process.   Plus, are these the customers we really want?  An interesting thread running thru Etsy about Heartsy brought up this comment:
Selling your [lovely] work for less than half price to people who habitually never pay full price for anything would be a very costly error…that's some damned expensive advertising aimed at the kind of audience you don't want anyway. –SurrenderDorothy

Consider these two points made by Lisa Peter of Etsy Selling Success when trying to decide if Heartsy is right for your Etsy shop:

·  You can’t repeat this marketing scheme over and over or you’ll be out of business quickly. Good marketing is ongoing. It can’t stop with one or two efforts.

·  Building a brand based on product quality and outstanding customer service becomes difficult. The buyers of these coupons are generally looking for a deal. Your product quality and customer service doesn’t really play into their decision to buy. They most likely will be out there looking for the next great deal and end up forgetting about your product quality and outstanding service.

Rumor has it Heartsy will begin adding transaction fees soon (as they are not reaping enough from sellers).  Hopefully, this will be a deciding factor for more handmade artisans to agree that this marketplace is just not supportive to the Handmade Movement.

Have your own Heartsy experience?  Let’s discuss!

--Lisa LeBlanc

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1 comment:

  1. Good article Lisa. And nice blog:)

    I've been hearing a lot about this. BUT, I'm still on the fence. I'm taking the backseat and will continue to see how things go.