Etsy has swept aside its old rules, relaxing rules about who can sell products on the site.
Etsy has provided an online global equivalent of the local craft markets where people sell handmade goods.
In addition to handmade's obvious meaning of items made from raw materials such as timber and cloth, Etsy also accepted items made from kits providing there were substantial design changes, and repurposed old items (perhaps industrial components turned into jewellery).
There were also rules limiting the type of assistance that could be received in the handmaking process. These allowed the use of an assistant or a specialised outside provider such as a printer providing sellers did the majority of the work themselves.
But that's all changed. Etsy has swept aside its old rules and replaced the idea of 'handmade' with 'authorship'.
So as long as the seller had the original idea for the item, he or she can employ as many people as necessary to actually make the products, or outsource manufacture completely. Though they are required to disclose who is involved in the production process and where they are located.
The weight of opinion among the Etsy community seems to be that this is a change for the worse, as it seems to bring factories into open competition with the artisans and craftspeople that have been traditionally found on Etsy.
Rather than tightening the rules to prevent the sale of largely factory-made items, Etsy appears to have adopted new policies that have the potential to increase total sales volumes at the cost of 'handmade' values.
What small businesses need to learn from this is the danger of relying solely on a third-party marketplace for online sales. Sites like Etsy (yes, and eBay) attract an audience of people looking to buy things, but unless you have an independent online presence which you actively promote to all your customers you will be at the mercy of policy changes and arbitrary decisions made by the marketplace operators.
Not surprisingly, some operators may seek to restrict your ability to refer customers to your real site, so read their terms and conditions carefully to determine how you can do this.