Does Etsy Have a Problem With Fake Goods?

Etsy, an online marketplace selling mostly handmade and vintage goods that just made its public debut last month, could have a serious problem with fake goods, says a new report. As many as 2 million items, or more than 5 percent of total merchandise on Etsy, could potentially be counterfeit or in violation of trademark or copyright protections, write Wedbush analysts Gil Luria and Aaron Turner. Etsy shares fell 10 percent in early Monday morning trading. Among the brands on the site that could be counterfeit include a wide range of Disney and NFL brands, plus Louis Vuitton, Chanel and Michael Kors. A main threat to Etsy is if these brands begin to monitor the site for illegitimate sellers, says Wedbush, which could “materially reduce” the listing and commission fees that Etsy makes from them.