Etsy sellers say AI art is driving them off the platform

Emily Olson built a thriving Etsy business selling watercolor prints and custom puppy portraits after opening her shop in 2017. Based in Boulder, Colorado, she sold simple dog portraits for $75 to $300 each, and by 2021 she says her Etsy store brought in more than $40,000 while her YouTube following grew to 180,000.

Then the slide started. Olson says her sales fell 30 percent in 2022 and another 50 percent the following year as competitors flooded Etsy, copies of her work appeared on sites like Alibaba, and AI-generated pet portraits began outranking her listings in search while selling for far less.

“People were like, 'Oh, this is the cutest image, I love it in my daughter’s bedroom.' They didn’t really know or care who made it, they were just eating it up.”

In 2024, Etsy said it would continue allowing AI-generated art as long as sellers disclosed it. Olson, frustrated by both the policy and her shrinking business, posted a YouTube video in January 2025 titled “Etsy Was Great … Until It Wasn’t—Why I’m Walking Away.” In the video, she says Etsy no longer aligns with her values and feels like “another giant corporation chasing profits above all else.”

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Sellers complain about AI listings and weak enforcement

WIRED reports that Olson is far from alone. On r/EtsyCommunity, sellers have posted repeatedly about falling sales and what one user called “AI-generated slop” that is not clearly labeled. Artists say the problem now extends well beyond mass-produced mugs and T-shirts to listings for crocheting patterns, hermit crab pools, and even medieval suits of armor.

Chloe Rose, an artist and content creator who has long sold stickers and original watercolors on Etsy, told WIRED that AI has “really, really hampered Etsy for sellers.” A UK-based illustrator named Viktor, who has sold on Etsy for 10 years, said his sales dropped 98 percent over the last year and blamed the flood of sellers looking for “an easy way to make a quick buck.”

Etsy told WIRED it understands how much sellers care about human creativity. James Ossman, Etsy’s vice president of customer operations, said the company sees Etsy as a marketplace for goods made, designed, handpicked, or sourced by real people, including sellers who use AI as one tool in their process. He also said enforcement around transparency and AI is “complex” and that Etsy has “a lot more work to do.”

New rivals target handmade-only sellers

The unrest is opening room for alternatives. Fybe, a new crafts marketplace founded by Rachel Powell, is set to open to vendors on August 1. The platform explicitly bans both AI-generated content and drop-shipping, and plans to use volunteer moderators and direct seller contact to verify that products are human-made.

Etsy still operates at huge scale. According to its 2025 transparency report, it has about 5.6 million sellers. The company generated $2.8 billion in revenue last year, up 2.7 percent from 2024, even after gross merchandise sales have declined since 2021 and the company cut 11 percent of its workforce in late 2023.

Olson has since moved to Shopify, though she says selling through her own site has also been difficult. Her bigger concern is whether buyers still value handmade work enough to seek it out when cheaper AI-made alternatives are everywhere.