Conflicts of Interest — Compliance Scenario
I Sell Artisan Candles on Etsy. My Employer Sells Basic Craft Candles. Is That a Conflict of Interest?
A real workplace compliance scenario — with three decision options and the right answer.
Quick Answer
Is it a conflict of interest to sell a product on Etsy when your employer sells a similar but different product? Possibly — and the employee isn’t the right person to make that determination alone. This scenario shows why product overlap, even in different categories, combined with access to company product roadmaps and supplier information, creates a disclosure obligation regardless of whether current competition exists. The right call is disclosure, not cessation — but the employee needs to let their employer assess the situation rather than deciding unilaterally that no conflict exists.
The Situation
You are a program manager at a company that sells craft supply kits. The company’s product line includes basic unscented pillar candles sold in candle-making craft kits. In your spare time, you hand-pour artisan aromatherapy candles at home and sell them on Etsy as premium wellness products. Your candles are scented, positioned differently, and sold in a completely different market. Your sales haven’t affected your work performance. You’ve never mentioned the Etsy shop to your employer because the products feel entirely different to you.
What Should You Do?
Choice AContinue without disclosing. Your product is fundamentally different — artisan aromatherapy versus basic craft supply candles. There is no real competition and no conflict. The products don’t even target the same buyer.
Choice BDisclose the Etsy business to your employer and let them assess whether a conflict exists. The overlap is not obvious today — but you are a program manager with access to company product roadmaps and supplier relationships. That access creates a potential future conflict that your employer’s compliance team should be aware of.
Choice CClose the Etsy shop entirely. Any business that involves a product category your employer touches is a conflict of interest and the safest resolution is to stop the outside business.
The Right Call
Choice B — Disclose and let the employer assess. This is the most genuinely difficult scenario in the conflicts of interest library.
The products are meaningfully different today. But the employee is a program manager — someone with access to the company’s product development roadmap, supplier relationships, and pricing strategy. If the company ever expanded into premium aromatherapy candles, the employee’s outside business would immediately become a direct conflict. The employee cannot know what the company’s future product plans are. That uncertainty, combined with their access to confidential product information, is exactly what disclosure is designed to address. Choice C overcorrects — there’s no current competition that requires shutting the business down. Choice A undercorrects — the employee is making a conflict determination that involves information they don’t have access to.
Why This Is One of the Hardest Conflict of Interest Scenarios
The products are genuinely different — and that’s what makes this hard.
This scenario is not a clear violation. If the employee sold the exact same unscented pillar candles on Etsy, the conflict would be obvious. The fact that the products are different — different scent, different positioning, different customer — makes Choice A feel entirely reasonable. That’s precisely why this scenario is valuable in training. Real conflicts of interest rarely look like obvious violations. They usually look like this — a genuine argument that there’s no problem, against a compliance framework that says the determination isn’t the employee’s alone to make.
Role and access matter as much as the product overlap.
This scenario would look different if the employee were a warehouse worker or a customer service representative. But as a program manager, they have access to product development plans, supplier relationships, and pricing information that a competitor — or a future competitor — would find valuable. That access changes the conflict analysis. An employee can only evaluate the conflict based on publicly available information. Your employer’s compliance team can evaluate it based on the planned approach.
Today’s non-conflict can become tomorrow’s direct conflict overnight.
Product categories expand. Companies pivot. A craft supply company that sells basic candles today may announce a premium wellness candle line next year. If that happens and an undisclosed Etsy shop surfaces in the same week, the timing creates a story — even if the employee had no knowledge of the expansion plans. Disclosing early, when there is clearly no current conflict, creates a record of transparency that protects the employee if the situation ever becomes more complicated.
Frequently Asked Questions
Is it a conflict of interest if my side business sells a different version of what my employer sells?
Potentially yes — and the answer depends on your role, your access to company information, and your employer’s specific policies. Product differences reduce the current competitive overlap but don’t eliminate the disclosure obligation. If your role gives you access to product development plans, supplier relationships, or pricing strategy, your employer’s compliance team needs to know about any outside business that touches the same product category — even if the products are currently different.
Does having an Etsy shop count as “outside employment” under a company policy?
Most outside employment policies cover any ongoing business activity that generates income — including online shops, freelance work, and gig economy activities. An Etsy shop with regular sales and a structured business behind it almost certainly qualifies. The threshold for disclosure is usually whether the activity is regular and generates meaningful income — not whether it operates through a traditional employment structure.
Do I have to disclose an Etsy business if I’m not making much money?
The disclosure threshold in most policies is not primarily about income level — it’s about the nature of the activity and whether it creates a potential conflict. A low-revenue Etsy shop in the same product category as your employer creates the same disclosure questions as a high-revenue one. When in doubt, disclose — the cost of disclosing a non-conflict is minimal, and the cost of not disclosing a real conflict can be significant.
What if I disclose the Etsy shop and my employer asks me to close it?
That outcome is possible but less common than employees fear, particularly when the products are genuinely different. Most employers will acknowledge the disclosure, assess the risk, and either approve the outside business with conditions or ask for modifications to how you handle certain information. If an employer requires closure of a genuinely non-competing business, that outcome is worth understanding before a conflict develops — not after.
How does my role affect whether a conflict of interest exists?
Role is one of the most important factors in a conflict of interest analysis. An employee with access to product development plans, supplier relationships, pricing strategies, or competitive intelligence faces a higher standard of disclosure than an employee with no access to that information. The more access you have to information that would be valuable to a competitor, the more important early disclosure of any outside business in the same space becomes.
How to Use This Scenario in Training
Conflicts of interest and Code of Conduct training establish the policy. This scenario makes it stick.
Xcelus recommends this scenario for product management, marketing, and program manager roles — employees with access to confidential product and supplier information who may not associate that access with their outside business activities. The genuine ambiguity of this scenario makes it particularly effective — employees who debate Choice A versus Choice B have internalized the core conflict-of-interest principle: the determination isn’t theirs alone to make.
More Compliance Scenarios
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Can I start a side consulting business while employed full-time? |
I’m an electrician with a weekend shed business. Do I have to tell my employer? |
Is it a conflict of interest if my spouse’s company is a vendor? |
Want the Full Conflicts of Interest Training?
Scenario-based training that helps employees recognize conflicts of interest — including the genuinely ambiguous situations where the right answer requires disclosure rather than a personal judgment call.