In September 2015, Etsy made further changes to its manufacturing policy with the launch of Etsy Manufacturing, a marketplace allowing sellers to connect with outside manufacturers to fabricate their products. Manufacturers must be reviewed and approved by Etsy to ensure they adhere to certain criteria, although Etsy will not conduct visits or in-person inspections. Sellers must apply and be approved to work with any partners listed on Etsy Manufacturing and are required to disclose their use of outside manufacturers on their pages.[108]
As of March, 2016, Etsy's top three competitors according to Hoovers Online are Amazon Handmade, Craigslist, and eBay.[91] Etsy has been compared to "a crafty cross between Amazon and eBay",[52] and to "your grandma's basement".[92] Etsy also has a number of direct competitors. DaWanda [de], based in Germany, closed in August 2018, ezebee.com, based in Switzerland, is a global competitor, but also caters to freelancers and professionals[93] Bonanza (formerly Bonanzle and 1000 Markets[94]) is based in the United States and focuses on clothing and fashion, Zibbet and Made It which are based in Australia, iCraft is based in Canada,[95] Artfire is based in the United States,[96] and Hello Pretty is an online craft marketplace targeted at South Africans.[97] Tindie is based in Portland, Oregon, and focuses on technology and electronics.[98] ArtYah is based in California, United States undergoing speedy growth and has worldwide sellers and consumers of handmade items, vintage and some craft supplies.[99]

In July 2008, Rob Kalin ceded the position of CEO to Maria Thomas.[61] Some longtime Etsy employees left the company in August 2008, including founders Haim Schoppik and Chris Maguire.[62] In September 2008, Etsy hired Chad Dickerson, who formerly worked at Yahoo!, as Chief Technology Officer.[63] The company acknowledged concerns about vendors selling other people's work as their own.[64]
On October 1, 2013, Dickerson held an online Town Hall Meeting to announce that Etsy would now permit factory-made goods and drop shipping, provided the seller either designed or hired designers of the items, disclosed to Etsy their factory, disclosed that they used factories and took "ownership" of the process. In that meeting and afterward, Etsy claimed the meaning of the word "handmade" should be redefined to encompass factory made.[85]
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