A 56% Drop After a Year of Improvements — What’s Really Going On?

As I wrap up the year and look back at my numbers, I’m trying to understand what changed in my shop. My traffic was down 24%, but my sales dropped 56% — more than double the rate of the traffic decline. And my best‑selling item fell 87% in December, which is normally my strongest month.

What makes this more confusing is that I spent the year improving my shop.
I retook all my photos, rewrote my descriptions, updated my titles and tags, and focused on clarity and transparency. In the third quarter, I actually saw a noticeable spike in my organic SEO traffic from outside Etsy.

But right after that, the same pattern I’ve seen before happened again:
a big surge in Direct Traffic, followed by a sudden collapse in sales.

Every time my SEO improves, Direct Traffic jumps — and then sales tank.

I wouldn’t say I’m seeing more and more of my designs copied, but here’s what does happen: when I come up with a new idea, I focus on what makes my process different. A lot of the mass‑production shops use sublimated cut‑and‑sew, so I leaned into vinyl print, glitter print, holographic print — and I saw real spikes from that.

Then the scrapers copied my listings.

People say imitation is the sincerest form of flattery, but that doesn’t help when it affects your bottom line. One person copying you is annoying. Dozens of shops doing it — shops that don’t actually make anything and just generate listings all day — can bury you.

And they’re using AI to do it. I tested this. I started adding keywords like “real” and “authentic” to reinforce my handmade process. Within days, those same keywords started appearing in the copycat listings.

Because the numbers didn’t make sense, I started looking for other explanations.
Maybe Etsy changed the algorithm.
Maybe something shifted in how listings are classified.

So I contacted Etsy Support, and here’s what I learned.

These are direct quotes from the Etsy agent:

“The label is applied by an automated system that looks at a combination of signals from your listing and shop (not just production partner info).”

“Sellers and support teams can't change the label manually at this time.”

“The system automatically assigns this, but our team is already working to assign these tags in a more accurate way.”

“Etsy’s automated system applies the ‘Designed by’ label based on listing signals and isn’t always perfect at identifying true handmade work.”

And when I asked whether updating my descriptions would fix it:

“Detailing your hands-on process may help the system assign the ‘Handmade’ label, but I am unable to guarantee that this change will make the system apply it.”

Support also told me that it doesn’t matter whether my items are labeled Handmade or Designed by, and that the label “does not affect visibility.”

But here’s what I can’t ignore:

At some point this year, Etsy’s automated system changed several of my listings from “Handmade” to “Designed by.” I didn’t change anything. The system did.

And the timing lines up almost exactly with when my holiday sales should have increased but instead collapsed.

I’m not claiming causation, but the correlation is hard to overlook.

As I look back on all of this, the part I can’t shake is the irony. Etsy built its entire identity on “Keep Commerce Human,” yet the decision about what counts as handmade — the core of the platform — is now being made by an automated system. A system that will not allow a human to make changes. And based on what Support told me, that system is misclassifying real makers while mass‑produced listings continue to show “Handmade.” If the goal was to protect the handmade community, this much automation doesn’t seem to be accomplishing it.

I’m sharing this because I’m trying to understand the bigger picture.

• Have your listings been switched to “Designed by”?

• Did it affect your traffic or sales?

• Did Support tell you anything different?

• Have you seen similar patterns with Direct Traffic spikes followed by sales drops?

• Have you noticed copycat listings appearing after you release something new?

The more we compare experiences, the clearer this becomes for everyone.