Depending on whom you ask, Alicia Shaffer, owner of the hit Etsy store Three Bird Nest, is a runaway success story — or an emblem of everything that has gone wrong with the fast-growing online marketplace for handmade goods. 
 
 With the help of up to 25 local seamstresses and alluring photography, Ms. Shaffer takes in upward of $70,000 a month in revenue selling twee headbands and leg warmers via Etsy. But as her business has grown, she has been harshly criticized online and accused of mass-producing goods, of obtaining wares from China. Detractors consider her a blight on Etsy’s hipster cred. 
 
 The dispute over how goods are produced and sold on a site that prides itself on feel-good, handmade authenticity underscores the growing pains transforming Etsy as it moves toward a potentially lucrative initial public offering of stock. 
 
 As for Ms. Shaffer, she denies the claims that have dogged her business recently but says she understands why questions have arisen about the volume of goods she produces. She says her store strictly adheres to Etsy’s guidelines, including that all items listed are either handmade or “vintage” secondhand, with some new exceptions that allow for approved outside manufacturing. “We’re a team of dedicated Etsy artisans who have been able to grow a tiny shop into a little machine,” she said. ||||| Photo Advertisement Continue reading the main story 
 
 
 
 
 
 
 
 Etsy was born in 2005 in a Brooklyn loft as a way for one of its co-founders to sell his handmade wooden goods. 
 
 Now the company is seeking to go public in what promises to be one of the more closely watched market debuts of the year. 
 
 Etsy filed its first prospectus for an initial public offering on Wednesday, disclosing a preliminary fund-raising target of $100 million. But the online bazaar — whose wares range from whimsical knit “beard” hats to vintage jewelry — will most likely seek much more. 
 
 With the filing, Etsy is preparing to market itself to prospective investors in as soon as three weeks and could begin trading on the Nasdaq stock market by mid-April under the symbol ETSY. 
 
 Unlike some of the other prominent companies that have gone public over the last six months, like the Alibaba Group of China or the online lender Lending Club, Etsy has quirkiness built into its DNA. Its first chief executive and co-founder, Rob Kalin, barely squeaked into college and came up with Etsy as a way to sell his homemade wares. (Its name, Mr. Kalin has said, arose from a misunderstanding of the Italian phrase “eh, sì” from the movie “8 1/2.”) 
 
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 “Since inception, Etsy has challenged conventional ways of thinking about commerce, business, individuals and communities,” Chad Dickerson, the company’s chief executive, wrote in a letter included in the prospectus. “I intend to keep our unconventional operating philosophy as we become a public company, and I welcome new investors into our community.” 
 
 But its path to an initial offering has been rocky at times. Mr. Kalin stepped down as chief executive in 2011 and was succeeded by Mr. Dickerson, the chief technical officer at the time. 
 
 And the company has been criticized for failing to adequately clamp down on the sale of counterfeit goods as well as for letting vendors sell products that come from factories instead of vintage finds or goods solely from artisanal workshops. 
 
 Still, in its decade of existence, Etsy has become a significant business. It reported $195.6 million in sales last year, up 56 percent from the previous year. And as of Dec. 31, it had 685 employees, most of whom are still based in the Dumbo neighborhood of Brooklyn. 
 
 Like other Internet companies that aim to go public, Etsy presents a measure of earnings that differs from that required by generally accepted accounting principles. Etsy’s own metric, known as adjusted Ebitda, or earnings before interest, taxes, depreciation and amortization, says that the company made $23 million last year. But it lost $15 million according to standard accounting principles. 
 
 Adjusted Ebitda was positive because in addition to excluding taxes, depreciation and amortization, it did not count the cost of paying employees in stock. 
 
 While investors often find such nonstandard measures of profits useful, they may be surprised at some of the items Etsy has left out of its particular metric. The company, for instance, also excluded acquisition-related expenses and foreign exchange losses. 
 
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 If those two items are included in the calculation, Etsy’s underlying earnings growth would slow considerably. Specifically, the firm’s adjusted Ebitda increased 36 percent in 2014, from $17 million in 2013. But if acquisition and foreign exchange costs were included, growth would have been only 6 percent. 
 
 Other items in the filing may give investors pause. Etsy, for instance, said that it had 19.8 million “active buyers” at the end of 2014. An active buyer doesn’t have to be using Etsy frequently, though. The only requirement is to have made one purchase in the previous 12 months, according to the filing. 
 
 Though the prospectus did not disclose details like how many of its shares are outstanding, it is possible to estimate market value. EBay trades at about 14 times its Ebitda for 2014. Applying that multiple to Etsy’s adjusted Ebitda would give it a value of about $322 million. 
 
 In his letter, Mr. Dickerson said that the company would not give quarterly or annual earnings guidance, numbers used by many public companies to steer analysts’ expectations. 
 
 Etsy’s biggest existing shareholders include investment firms like Accel Partners, Index Ventures and Union Square Ventures. Together, the three control more than half of the company. The prospectus did not disclose how many shares any of the firms planned to sell. 
 
 As part of the offering, Etsy plans to take about $300,000 of its proceeds from the I.P.O. to finance Etsy.org, a nonprofit it established in January to help train female entrepreneurs. 
 
 The offering is being led by Goldman Sachs and Morgan Stanley. ||||| I shut down my Etsy store in November. 
 
 I'd been a seller since April 2006, less than a year after Etsy first went into beta. I was in my first job out of journalism school, and making cards and journals was a creative outlet and a way for me to score some extra money. I'd been selling stuff on the side at craft shows for a few years at that point, part of a larger wave of modern crafters who met online and inspired each other to start businesses. 
 
 Etsy debuted at just the right time: Indie craft shows had started popping up around the U.S. in the early 2000s, but running your own online store was a complicated task. (My "store" at the time encouraged buyers to mail me money orders.) Most of the people who joined Etsy in those first few years were like me—independent crafters who were already at least somewhat established IRL—and the quality of the goods on the site was generally high. 
 
 Things have changed in the past decade: Indie craft has grown from a close-knit subculture to a giant economy that influences trends in big box stores. And Etsy has grown from a startup built by crafters and for crafters to a juggernaut on the verge of an IPO. The most recent success story of a mom making a million dollars a year isn't what it seems. In practical terms, scaling the handmade economy is an impossibility. So while Etsy maintains a hipster façade, they lost their indie cred years ago. 
 
 Grace Dobush About Grace Dobush is a freelance journalist in Cincinnati, where she writes about design, tech, politics and culture. She also organizes an indie craft show and wrote the Crafty Superstar craft business guides. Follow her gracedobushtogo. 
 
 I have to acknowledge this: Modern craft would not be as hot as it is without Etsy or something like it. Like book authors who hate Amazon's policies, crafters who hate Etsy find it hard to leave because of the site's immense traffic and generally positive public reputation. Just before the Christmas rush, I finally put my money where my mouth is and shut down my shop. My reasons for leaving the site aren't unique, even though casual shoppers and potential investors have no idea of the drama going on behind the scenes. Here's my beef with Etsy. 
 
 A Bigger Market Isn't a Better Market 
 
 There are more than 30 million items listed on Etsy right now. That popularity is, of course, great for Etsy. But new hobbyist sellers, desperate for clicks, often price their products so low as to make real profit an impossible dream. 
 
 And that popularity isn't good for shoppers, who have to wade through pages of crap to find what they're looking for. Searching for "mermaid" in the wedding gown category of Etsy returns 1,299 results, ranging from a $6,882 gown made by Project Runway's Leanne Marshall to dresses for less than $200, one purportedly handmade lace dress going for $65. (For those who aren't up to date on their fabric prices, the materials to make a wedding dress alone would cost at least $65.) A friend and I recently discovered we both always sort results by highest price when we're searching on Etsy to see only the serious sellers. 
 
 What other e-commerce sites can say the same? Etsy needs casual crafters to keep paying the 20-cent listing fees and, if any of the items sell, the 3.5 percent transaction fees and any additional payment processing fees. (See "She's Making Jewelry Now.") Etsy doesn't disclose its finances, but it facilitated $1.35 billion in sales in 2013, which adds up to more than $47 million in transaction fees, not counting listing or payment processing fees. 
 
 Resellers Are Rampant 
 
 That Etsy began allowing manufacturing partners in 2013 underscored the reseller issue that has plagued the site for years. The Marketplace Integrity, Trust & Safety team—which has the unenviable task of policing sellers for adherence to Etsy rules—is unable or unwilling to weed out sellers of mass-manufactured goods. And having sellers who are able to move nearly a million dollars of product a year is great for Etsy's bottom line. 
 
 Sellers have been dissatisfied with Etsy's policing of mass-manufactured items posing as handmade for a long time, but the site hasn't seemed receptive to their concerns. An Etsy staffer I met a few years ago dismissed sellers' questions about Chinese resellers as "kind of racist." The snark site Regretsy (RIP) was one of the few big gathering places where sellers and shoppers could voice their frustrations with the marketplace. Any kind of "calling out" of accused resellers or bad businesspeople on Etsy's forums is usually acknowledged by an admin shutting down the thread with "I'm going to close this up now." 
 
 Etsy Has Homogenized Indie Craft 
 
 From the beginning, Etsy has pushed the "quit your day job" storyline. The fact is, the majority of the people selling on Etsy aren't running their businesses full-time, and the idea of quitting your day job is a manic pixie fever dream. If you want to make it big on Etsy, you don't necessarily want to make things that fulfill your creative dreams; you just want it to get onto the front page and sell like hand-felted hotcakes. 
 
 The Etsy effect on craft trends is striking. At the San Francisco edition of the Renegade Craft Fair in November, I was struck at how most things look like the homepage of Etsy, pinnable, pretty things. (See "Put A Bird On It.") It's so incredibly boring. How many pieces of geometric jewelry with a pop of color can the earth bear? Will we ever see hand-drawn logos without antlers and arrows? How much barn wood must we salvage to atone for our crafty sins? 
 
 Successful Businesses Leave Etsy 
 
 The biggest secret is this: Makers who have what it takes to succeed—good product, a good marketing plan, a pricing structure that compensates everyone in their supply chain fairly—don't really need Etsy for long. 
 
 Etsy is the fifth most-visited marketplace site in the U.S., after Amazon, eBay, Walmart and Best Buy. But for that visibility, sellers have little autonomy in the store's design, and are subject to the site's rules, fees and design. A customer complaint can freeze your payment account. An accusation of copyright violation can freeze your store or shut it down entirely. 
 
 For a full-time crafter, that's too much of a risk. Successful makers of a certain size eventually move to e-commerce platforms that give them much more flexibility and control for fewer fees. If you're working in high volume or high price points, using a customizable ecommerce platform such as Big Cartel or Shopify massively reduces your fee obligation, as I outlined in a comparison chart. 
 
 I see the recent policy changes Etsy has made—allowing third-party manufacturing partners, entering the wholesale space—as last-ditch efforts to keep super-successful sellers using the site. But successful handmade businesspeople weren't waiting for permission from Etsy to hire help or get into wholesaling. They grew out of the site and took their wares elsewhere. 
 
 The David Has Turned Into Goliath 
 
 At its outset, Etsy was a powerful tool for makers, by makers. We were a bunch of Davids, fighting back against the big-box Goliaths with artisanal slingshots. Founder Rob Kalin came up through the same online craft forums that me and my crafty cohorts did, and we were making a revolution. 
 
 In the past few years it's become apparent that Etsy is the Goliath. Indie craft's whole purpose from the outset was to meet your makers and consume conscientiously. Now, when you ask your friend where they got that cool "Weekend at Bernies" cross stitch sampler, they'll tell you, "I bought it from Etsy"—the maker's identity is secondary, if noted at all. 
 
 I'm not pessimistic about handmade culture at large: Maker culture is thriving independently of Etsy, and it's easier than ever for crafters to run independent online stores. I prefer to sell my wares (and buy my presents) at local indie craft markets and in curated bricks-and-mortar shops that reflect the flavor of their communities and encourage real relationships between makers and buyers. 
 
 The bottom line is this: Etsy needs crafters more than crafters need Etsy. ||||| Etsy, the online marketplace for buying and selling all things quirky and handmade, is also home to a vibrant witch community. 
 
 Those witches are fuming over Etsy’s new policy of rigorously enforcing its existing ban on sales of “metaphysical services,” which is to say spells and hexes. As The Daily Dot reported, previously witches and other purveyors of the supernatural got away with selling such services as long as they didn’t guarantee results and also offered the buyer a tangible product. You could sell a spell offering (but not guaranteeing) better sex, for instance, if you included actual photos of the spell being cast as part of the purchase. Evidently that’s no longer the case. 
 
 Etsy Where will shoppers turn for their next priapic wand? 
 
 “Any metaphysical service that promises or suggests it will effect a physical change (e.g., weight loss) or other outcome (e.g., love, revenge) is not allowed, even if it delivers a tangible item,” Etsy’s policy reads. 
 
 In response, a small group of witches—no, not a coven—has taken up an online petition to stop what it views as a new ban on its merchants. 
 
 Etsy tells Quartz its policy has always prohibited selling services and that it didn’t change the rules; it just clarified them. 
 
 While the public may chuckle, there is actually a very small, but apparently growing, Pagan and Wiccan population in the US that may or may not identify as witches. In the absence of a local witch outfitter, Etsy offers this group a way to buy and sell their wares to each other and the general public. 
 
 The Etsy petition claims the ban is religious discrimination. 
 
 “This is discrimination against Pagan and Wiccan faiths, as this ban will target certain sellers and items,” it states. “Many stores have already been closed!” 
 
 Comments left on the petition echoed the sentiment. “I think it’s awful that you are discriminating against the Wiccan, Pagan, and all Metaphysical communities,” wrote one petitioner from California. “Are you going to ban Kabbalah items next?” 
 
 A spokesperson for Etsy, which went public in April, says the reasons for the “clarification” of its policy are twofold: It wants to reiterate that it doesn’t allow services, and it’s trying to ”protect our community from business practices that prey upon vulnerable and desperate shoppers—such as those seeking a treatment for cancer or infertility, or those with self-esteem issues who are seeking a spell for weight loss or beauty enhancement (think penis or breast enlargement).” 
 
 “At Etsy, we believe in freedom of thought, expression and religion,” the spokesperson said. “When we make policy decisions, we strive to strike the right balance between creative freedom, Etsy’s values, and establishing a safe marketplace for members.” 
 
 Etsy isn’t the only marketplace to ban metaphysical goods and services. 
 
 Previously many witches congregated on eBay, until it banned spells, potions, and other products back in 2012. 
 
 But whither to witches, and seekers of their remedies if they can’t sell on Etsy? 
 
 Amazon has been so eager to snap up Etsy merchants that it has dispatched emails inviting them to sell on its new “Handmade” marketplace. In the very least, it would offer more convenience: Your next love potion could delivered to you by drone in thirty minutes or less. ||||| If you’re serious about crafting, then you may have fantasized about ditching the 9-5, picking up the glue gun, and opening an eponymous Etsy shop. 
 
 Well, Alicia Shaffer from Three Bird Nest, is living that dream. 
 
 Shaffer is one of the most successful sellers on the online craft site, with more than, gulp, an estimated $65,000 a month in sales. But she tells Yahoo DIY that it didn’t all happen, overnight, though. 
 
 
 
 
 
 (Alicia Shaffer and family. All images courtesy Three Bird Nest) 
 
 Etsy may seem like a quaint little destination for vintage pendants and handmade birthday cards, but with 30 million registered users, one million sellers and over one billion in total annual transactions, this is not your neighborhood craft fair. This is big e-commerce. 
 
 
 
 
 
 girls posing with boquets More 
 
 Where most shops would love to sell 300 items a day, Three Bird Nest is selling over 3,000. (If those numbers don’t make you wanting to quit your day job, then you must really love what you do.) 
 
 Three Bird Nest has its own distinctive sensibility, but it’s not breaking the mold with exclusive, rarefied creations. Items similar to her lovely handmade, knitted scarves, wraps, headbands, beanies, boot socks and calf cozies (adorably irresistible) can be found elsewhere. So why is Shaffer cleaning up when others are coasting? 
 
 
 
 
 
 Alicia wearing a homemade purple headband More 
 
 One thing that stands out is Shaffer’s passion for her work. “I love textiles, fabric, fashion, designs, and seeing how different colors and fabrics pair together,” she says on her site. When the seller’s passion comes through, the shopper connects with craftsperson. 
 
 But Shaffer also loves the business side. She happily absorbs the pressures that come from running her own mini empire. The creative process, from concepting, to production, to getting it in front of people to delivery is a high for her. To have a successful business on Etsy (or anywhere), she advises: you need to eat, sleep and breathe your brand. 
 
 Shaffer also designs for a wide range of women, which broadens her potential customer base. “She’s a mom, a student, a daughter, a bride, a woman going on a first date,” she says. 
 
 
 
 
 
 bracelets closeup More 
 
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– When customers order an heirloom pet teepee, Charles Manson necklace, or vinyl Gorillaz wall clock from Etsy, they expect it to be lovingly handmade or authentically vintage, perhaps even customized and made from ecologically sound materials. But critics of the site are claiming that sellers are increasingly taking to mass production or even reselling cheap items from overseas—a move that many see as undermining the crafts giant's authenticity and credibility, the New York Times reports. And although execs from the online marketplace didn't grant interviews with the Times ahead of its potential IPO, Etsy CEO Chad Dickerson notes in the IPO prospectus that there have been complaints about sellers working with outside manufacturers and "diluting our handmade ethos," he notes. "After all, Etsy has always served as an antidote to mass manufacturing. We still do." Etsy used to ban sellers from outsourcing manufacturing or hiring employees to keep up with demand, the Times notes—until Dickerson relaxed the rules in 2013, as long as certain criteria were met. Alicia Shaffer's Etsy shop has been featured on Yahoo and in Fast Company as one of Etsy's biggest success stories; she tells the Times that while she understands why people are skeptical about her high-volume output, she follows all of Etsy's guidelines, hiring a couple dozen local seamstresses to help her out. But Grace Dobush, an ex-Etsy seller, tells the Times that "as Etsy has gotten bigger, it’s gotten more like eBay." In an essay last month for Wired, Dobush notes the "pages of crap" shoppers have to filter through and a seeming disinterest on Etsy's part to purge resellers. "At its outset … we were a bunch of Davids, fighting back against the big-box Goliaths with artisanal slingshots. … In the past few years it's become apparent that Etsy is the Goliath." (Click to read about Etsy's "haunted doll" market.)