ENCORE: Etsy Gets Crafty Competition from Waukee Entrepreneur

A little over a year ago, Julie Eliason found herself with an unusual problem.

The West Des Moines woman was interested in marketing and selling a few of her handmade aprons online. Naturally, she consulted her husband, James, a software developer, about how she should get started.

"She asked me, 'Where should I go?' so I sent her out to a couple different websites like Etsy and almost immediately she was frustrated with the whole process," James Eliason said.

Etsy.com, founded in 2005, is the world's largest online marketplace for artists and craftspeople interested in hawking their handmade wares. According to a recent TimeBusiness article, Etsy "gets more than 39 million unique visitors every month, and last year rung in sales of $525.6 million."

With traffic that high, criticism is inevitable. There's no doubt Etsy has its fair share of critics, many of whom argue that it's grown too large to support the small business person and part-time craftspeople.

At EtsyBitch, an online forum for "like-minded Etsians who are tired of the demeaning treatment, abuse, and general mismanagement of the Etsy.com site," sellers complain about Etsy's ever-changing policies, selling tools that simply don't work and a lack of support for those who pay the bills, so to speak.

The online forum aims "to call attention to the unfairness and general stupidity of its admin and the unprofessional way they treat their sellers," quotes the admin of the site.

Crafters Frustrated with Etsy Spawn New Site

James Eliason listened to his wife's complaints and decided to take matters into his own hands.

"I have a tendency to want to solve the problem by building things, so that's what we did," said Eliason.

Eliason, 32, and his business partner, Levi Rosol, also 32, of Waukee, were both software developers doing work for other clients in 2011 when the idea for Goodsmiths hatched.

Goodsmiths, an online "marketplace for makers," not only gives artisans and craftspeople the tools they need to sell online, but also offers an online community that's there when you need them.

Having officially launched just last month, Goodsmiths is already gaining momentum. With almost 700 sellers and 10,000 items worth more than $350,000 in its inventory, things are looking up.

"We know what we want to do and the culture we want to create," said Rosol. "We're not an Etsy clone. We never set out to be that. Goodsmiths is more about the community and the tools we provide. If we can establish and maintain that idea, we think we'll be a successful business."

The two men say Goodsmiths excels over Etsy in price, a strong online support system, and a higher level of technology. 

"Price is the first thing," said Rosol. "Etsy has a listing cost in order to put something on the site. It costs you 20 cents per item to sell. If you have 20 items, it’s going to cost you $4. With us, there is no listing fee, so it’s literally free to set up a shop on Goodsmiths."

Rosol adds that transactions fees on Goodsmiths are also lower. While Etsy charges 3.5 percent on every item sold, Goodsmiths is currently sitting at 2 percent.

"Right now, we're running a promotion at 2 percent, but we just announced that in 2013, we’ll still only be at a 2.5 percent transaction fee," he said.

Treating Sellers Better

Most importantly, Rosol and Eliason agree, Goodsmiths offers better customer service because, simply, they care more.

Angie Meyer, owner of Rusty Roof Birdhouses and Clubhouses in West Des Moines, said that was evident from the start.

"I think they have great customer service," she said. "They just seem to know who you are and have been wonderful to work with. It's nice to know the people you're working with rather than just talking to someone who's just doing their job."

Meyer said she tried working with Etsy but found that she just couldn't get exposure for the items she was selling.

"I have done Etsy, but it's hard to get high up on their list," Meyer said. "I heard about Goodsmiths, so I joined and I think it’s great. The low rates are really great and I've actually had one sale from the site so far. That's exciting because we haven't been up very long."

Meyer said she hopes Goodsmiths is the key to helping to achieve her dream. If sales keep up, she'll be able to spend more time with her three children.

"If Goodsmiths gets our name out there and generates a lot of business, I can be a stay-at-home mom," she said. "I would love that."