Everything in this whiny story by a former Etsy seller is completely wrong -- anti-capitalist, anti-freedom, corporativist, and guildist -- which is suffocation and death for any economy or market.
Everything this whiner is saying is what I would see constantly for years in the virtual world of Second Life, where the exact same things occurred:
o A pioneering group of creative people came in and dominated the market because of their early-entry status, their connection to the developers, their close-knit small society, and their actual talent.
o As word spread that people could make money from the platform, the oldbies, as they were called -- or even "creator fascists" because of their draconian solutions to stay in power -- more people came, and they made cheaper or free goods, more goods, and lesser quality goods
o Those in the original privileged position began to whine and scream and insist on all kinds of special treatment and special solutions -- newbies should be barred from even creating using the inworld tools unless they paid premium membership; those who put out freebies should pay a fee to display them on the online store; oldbies should get special deeply discounted server space (they did) etc.
o Originally, SL was constructed like real life using the ideas of famous architect Jane Jacobs, that hubs like subway stops ("telehubs" to which people could teleport) would be natural locations for stores to be set up and for socializing. When the new people flocked to these hubs, which were bought up by some landlords who charged a lot but let in anybody, the oldbies howled because their stores at more remote locations were now at a disadvantage. So they got them shut down!
Basically, when faced with natural market competition of the sort that occurs in free economies in real life, those in virtual life howled and wanted the managers of the platform to accommodate their howling by making the market unfree, and warping the platform around them and their stores. They constantly announced they were leaving and did leave with grand theatrical exits (like this person).
The world turned on its axis and didn't care.
o It doesn't matter if some people make less quality and cheaper goods -- people with less money buy them -- there's a range of choice and that makes shopping more interesting, you might find a bargain; you might save up and buy something fancier
o It doesn't matter if there are more choices than you can literally see on a screen or scroll through -- you can add key words and zero in, duh, just as you can on Google in general or on sites like Amazon. It doesn't matter if there are 1,000 mermaid dresses because you can do what we call "browse" and "scroll by" and "add key words" like "sequins".
o Other facts in organic search of networks, social media, word of mouth etc kick in to add to strictly key-word search so that people find things.
o Yes, those unable to make an interesting store sometimes go out of business in the world of competitive online sales; on the other hand, the market is more open if the platform is free so that anyone can enter.
The alternative is to make closed markets like either a medieval guild system where only certain privileged connected classes can make and sell, and everyone else buys; or a Renaissance Faire system where the specialized creative class runs the fairs and the rest have no choice but to be turned into consumers or else it is open, where anyone who can tie two sticks together can enter if they pay the fee -- which is the same for everyone.
Second Life began to suffer and die out because of its closed economy. It kept rewarding the creative class of early adapters -- and still does, 10 years later with a fraction of the population it had at its peak - with special insider deals, NDA'd projects, early notice of new features on the platform to get advances, deep discounts on server space; special connections to developers etc etc. The founders and current managers continue to ardently believe in the creator-fascism of the tech world of Silicon Valley itself, where the "maker" and the "coder" are gods on the special Google bus and everybody else is in the mud taking the city bus if it shows up. So they want to reward those "creators" and give them discounts, specials, advantages, attention, etc. and create a bar of entry to everyone else.
There isn't a solution to this whiner's problems except for her to leave if she can't make a competitive store. The solution could only be in charging newbies more fees, or other closed-economy solutions.
Oh, those were the solutions Linden Lab chose and still chose which is why it fails.
The absolute worst thing in this little clutchy authoritarian's mind -- and I've seen it a zillion times on Second Life -- is her hatred of re-sellers -- which is indeed racist and classist. In Second Life it wasn't just the Chinese (Anshe Chung in the land market) it was Brazilians and Spanish and Poles and others who were "reducing the quality" and "flooding the market with cheap goods" and "producing crap."
Then there's the re-selling problem.
If I buy something, it's my property, not yours. This is a rock-solid tenant of capitalist free societies under the rule of law, with many ancient court rulings upheld today. I can resell your knitted doily -- and even for a lower price than you're selling it -- and too bad for you, that's freedom and it must stand. The alternative -- again -- is to have draconian content and seller check-ups and clamp-downs all the time.
In Second Life, with the affordances of code, there were three permissions you could toggle -- sell, but next buyer can't resell or give away; sell, but next buyer can't copy and only sell that one copy he bought; sell, and let next buyer copy and resell. The first category, designed to keep the creator-fascist insider class in business was actually less popular and did worse because people didn't like spending real money like $50 on a prefab house for their virtual avatar, only to have it break for various reason when being set out or when a server crashed -- and be unable to rebuild it again out of inventory. They also hated that they couldn't resell hair or furniture they bought but then tired of -- they couldn't have an antique store or a garage sale. Those who made it possible to do just got more customers.
It sounds like Etsy actually tried to police re-selling, and then when it allowed on manufacturers instead of the sainted "makers" and "creatives," it ran into trouble with Chinese mass produced manufactured items selling here. But so what? It should just create a section of the site called "manufactured items" and be done with it and compete with Amazon instead of maintaining the fiction of cutesy Etsy.
This whiner doesn't say anything about her solution for re-sales, she only complains -- but one senses that either she wants those people removed under the TOS (if it is in the TOS) or create a TOS clause to get rid of them. But this isn't freedom. Platforms that police this kind of re-sale or "naturalness" of products just fail. Second Life can show you that. It, too, tried to clampdown on kits that made it easy for people to build their own chair or make their own dress and sell it. But how else could new people enter the market and make money if they weren't skilled yet? And I'm making a distinction against cracking down on piracy, which I'm all for -- that's vital for on-line life. But that's not the issue; freedom of sales are.
The classist notions of quality are just that -- snobbish, and widely differing to class and therefore have no merit in a discussion of how a free marketplace should be. Don't like crappy knitted doilies made out of polyester? Don't buy them. The market solves this. Only the organic free-trade 100% knit doilies will sell then. Except...they won't, except to those with the money and finer appreciation of them. So market to them and stop trying to close the market around your product to guarantee your success.
The problem of the platform's brand taking over your brand is endemic in these worlds. So what? Build your brand, use social media, follow-up, get your customers to know you and invoke you. It's called "marketing" in what we call "the free market".
We are not interested in re-creating the Soviet Union's "creative unions" where only those loyal to the state were permitted freedom. Go find VCs to pay for your insular oppressive creator class, and see if any customers show up.