The global online marketplace, Etsy, has swiftly transformed from a niche craft platform to a colossal commerce hub. With millions of active sellers worldwide, many of whom are based in the United States, Etsy has become a substantial income source for numerous individuals. However, whether your Etsy store is your primary business or a supplementary venture, it’s vital to devise a contingency plan that accounts for worst-case scenarios such as incapacitation or demise. The question arises: What would become of your Etsy store if you were unable to manage it?
Beyond being an income source, an Etsy store is a part of your legacy and should occupy a prominent spot in your digital estate plan, alongside other digital assets like social media accounts, subscription services, and cryptocurrencies.
The Etsy Evolution
Emerging as GetCrafty.com in 2005, Etsy was conceived as an online community for craft enthusiasts, particularly women. The yearning for an e-commerce platform dedicated to buying and selling handmade goods prompted the birth of Etsy. As of 2022, Etsy proudly boasts 7.5 million active sellers, 95 million active buyers, over 100 million listed items, and an astounding $13.3 billion in gross merchandise sales.
While some sellers argue that Etsy has veered away from its do-it-yourself ethos since going public, it continues to serve as a launching pad for entrepreneurs who might not have ventured into business otherwise. This was particularly evident during the COVID-19 pandemic when Etsy’s business and stock price soared to unprecedented heights.
Insights from Etsy’s 2021 Seller Census highlight the evolving nature of work among sellers:
- The majority (55 percent) of Etsy sellers in the U.S. are female and educated (79 percent)
- The average age of a seller is around forty-five
- For nearly a third of sellers, their creative business—both within and outside Etsy—is their primary occupation
- Etsy serves as supplemental income for around 10 percent of sellers
- Roughly 25 percent of sellers have children at home
- A significant portion (81 percent) operates as solo businesses from home (96 percent)
- Etsy and other creative businesses help cover household expenses for about a third of sellers
- Sales experienced an average increase of 34 percent from 2019 to 2021
Collectively, Etsy stores contribute nearly $3.8 billion to U.S. household income and infuse $14.3 billion into the U.S. economy.
Addressing Incapacity in the Etsy Sphere
Etsy sellers relying on platform-generated income can encounter various disruptions. While vacation mode offers a temporary hold solution, a more comprehensive plan is necessary for extended periods of incapacity. Vacation mode temporarily halts sales, rendering the shop unable to generate income. To counter this, sellers should establish a robust estate plan encompassing online marketplace stores, allowing a trusted individual to undertake crucial actions such as activating vacation mode, paying fees, shipping items, managing refunds, and more.
Recognizing that sellers in their forties and fifties are more likely to experience incapacitation than death, the absence of employer-provided disability insurance for independent entrepreneurs underscores the need for proactive planning.
In crafting your estate plan, ensure that it enables a designated person to:
- – Access your Etsy account
- – Activate vacation mode
- – Manage subscription fees
- – Handle shipping and refunds
- – Modify listings
- – List new items
- – Run Etsy advertisements
Bear in mind that Etsy does not support account transfers. Moreover, sharing credentials requires caution, as it provides access to sensitive personal and financial information. While Etsy strictly enforces its account transfer policy, sellers can contact Etsy directly for assistance.
Necessities for Closing or Selling an Etsy Store
In cases of prolonged or permanent incapacitation, the tough decision to close or sell your Etsy store might arise. Etsy provides guidance for closing a shop, and this step might be necessary in the event of a seller’s demise. It’s wise to include Etsy account credentials in your estate plan to address this scenario.
Transferring or selling a business tied to Etsy necessitates the establishment of a new account, which is important to consider when planning for succession. Also, be mindful that each Etsy shop can have only one owner, and exploring options such as partnerships requires careful consideration of Etsy’s policies.
Digital Estate Planning: A Contemporary Imperative
As our lives increasingly unfold online, a comprehensive plan for digital assets is indispensable. The evolving legal landscape around data and digital assets mandates distinct strategies for each account, depending on the platform’s policies.
Crafting a thorough digital estate plan is imperative, ensuring that your loved ones can access and manage your digital assets while adhering to data privacy regulations. During discussions with our estate planning attorneys, we can compile a list of your digital assets and design a strategy for granting heirs access. If you have specific queries about assets like your Etsy store, this is the time to address them.
Embark on your planning journey today by contacting our office. Your digital legacy deserves as much attention as your tangible assets.