*pulls out soapbox* I used to love Etsy. It has been a consistent source of revenue for Sketchy Notions and a wonderful way to grow my brand and audience over the years. And I've found some amazing items from equally amazing small makers and businesses.
But over the last few years, Etsy has forgotten their original mission of being a marketplace that supports small makers.
While I fully understand that Etsy is a business (and now a public company that needs to keep shareholders happy), they've made many moves that feel abusive of their power and the chokehold they have over the handmade ecommerce world.
For those unfamiliar with Etsy, it's an online marketplace that offers makers a place to sell their handmade or vintage goods. In recent years, they've allowed mass produced items (usually cheap knockoffs made overseas) to be sold alongside one-of-a-kind items. In addition to the dilution of the market, they've implemented some programs that are just inconsiderate of sellers. Oddly enough, a lot of these changes started happening when Etsy lost their B Corp certification which is awarded to businesses that "meet high standards of verified performance, accountability, and transparency on factors from employee benefits and charitable giving to supply chain practices and input materials."
Transaction Fee on Shipping Costs:
The first nail in the coffin was a 5% transaction fee. Originally they were taking less, and it wasn't taken from our shipping fees as well. As a result, some shady sellers were undercharging their items and overcharging on the shipping in order to appear competitive. To discourage that (and as a result, punish the honest sellers), Etsy now takes 5% of each sale, including shipping prices. We also pay listing fees and transaction fees on top of this 5%.
Why does Etsy feel entitled to 5% of what I have to pay the Post Office to ship my items? Especially when I don't decide how much it the Post Office will charge me to ship my orders.
The "Free Shipping" Requirement:
Fast forward to 2019 and the second nail in the coffin... Etsy rolled out a new requirement of "free shipping," despite our protests in the surveys they sent out prior. In order to just show up in search on their platform, sellers have to offer free shipping on orders over $35. This sounds an awful lot like blackmail to me...
Etsy seems to have forgotten that makers that sell handmade goods are not Amazon who can easily absorb the cost of shipping. What was Etsy's recommendation? Add the shipping cost into the item cost and say "free shipping." Many of us cannot easily roll in shipping costs into our product prices to cover this "free shipping." Many of us, myself included, are in product niches that have price ceilings. I can't justify charging $9 per card and then lie to buyers that it's free shipping...it just doesn't work and feels incredibly dishonest.
Not only that, but we are constantly encouraged to lower our shipping prices every time we make a listing or shipping profile which is an absolute joke because the shipping cost is dictated BY the shipping courier we chose to ship with.
The Mandatory Ad Program:
One of the more infuriating rollouts they've made...the mandatory ad program. Etsy has now decided to advertise for sellers, whether or not we want it. They will pick which items to advertise, and if a potential buyer clicks that ad and purchases from that shop in the next 30 days, Etsy will take 12-15% of that sale. We can't opt out, and we can't see proof of these ads. This percentage is determined by how much you made in 2019...over 10k, you're only charged 12%. Under 10k, they take 15%.
This means, that many sellers who have items priced over $35 (possibly to try and cover the free shipping they're forced to offer) could lose 20% on an order.
I've also read instances of sellers being charged this percentage on private listings that never would be been available to be advertised online. Many sellers, who have a better understanding of their audience and products, would rather allocate that 12-15% on their own advertising plans that they've found reliable success from. This new program is incredibly frustrating and feels like outright extortion from a company that claims to support small makers.
The "Star Seller" Program:
Their latest bs to increase trust in the marketplace is the "star seller" program. Sellers who hit certain benchmarks over a 3 month period will get an extra "star seller" badge on their shop. The requirements: responding to 95% of messages within 24 hours, shipping 95% of orders with tracking and on-time, and 95% or more 5 star ratings.
Seems simple? Not quite...
Instead of sellers to have healthy work/life boundaries and (god forbid) work week hours, you gotta drop everything to respond to all messages. So that Friday evening message I get has to be handled on Saturday aka my day off. Shipping with tracking? Not an option when you sell stickers and ship them in an envelope with a stamp since no one will pay $4 shipping for a $3 sticker (which Etsy will be sure to remind me is "too expensive"). And shipping on time? Usually fine, unless you offer pre-orders for custom items and the farthest in advance you can mark the ship date is 10 weeks. Especially in the current wild world of supply chain problems, this has become an issue for SO many sellers who have to wait on supplies with no estimate for their arrival.
Update March 2022...another fee increase:
Etsy decided to announce (on the day Russia invaded Ukraine) that they would be raising our transaction fees yet again from 5% to 6.5%, after one of their post profitable years yet ($717 million in Q4 of 2021). This is a 33% increase which now accumulates to a 23% chunk from our listing if the item is sold through an off-site ad. If it wasn't furious before...boy, howdy...
The Fallout:
In response to this, I have been forced to raise prices in the Etsy shop to account for potential fees Etsy will deduct from my sales. I've removed all links and mentions of my Etsy shop from social media and business cards. I refuse to offer any sort of sale in my Etsy shop and there will never be another coupon sent to a shopper of my Etsy shop.
Why won't I just close up my Etsy shop?
Unfortunately, it's just not that simple. As much as I want to just throw up a giant middle finger to Etsy and close my shop, Etsy is now a destination shopping site for people looking for items like mine. They have completely monopolized the handmade market and become THE name for handmade at the expense of handmade sellers' sanity, time, and income. This is why they feel emboldened to force these programs onto us because they know many of us have no other option to easily access potential buyers.
Plus, many Etsy shoppers do not realize how poorly Etsy treats its sellers. It's also in their Terms that we can't link or direct any potential buyers off their platform within the platform. So as much as I'd like to make a banner telling folks that cards are .50 cheaper in my Sketchy shop, I can't.
Now what? How to shop small with small makers in mind:
While I will no longer be shopping on Etsy, that doesn't mean I will stop supporting small makers. And neither should you! If you wish to support a small maker:
- Research to see if they have a standalone shop you can purchase from instead of an Etsy shop. This takes very little effort for you to Google them or search for their Instagram account.
- Avoid clicking any ads that could lead to Etsy taking more money from a small maker.
- Contact the maker! If their Etsy shop is the only option, try emailing them or DMing them OFF OF ETSY to see if you can purchase from them directly. Etsy sellers are technically not allowed to direct people to complete a transaction off of Etsy if it originated there.
- Tell your friends and family about these new fees to help spread the word about how much Etsy disregards its sellers in favor of their bottom line
- Support these makers elsewhere! Sign up for their newsletters, like their Facebook pages and follow their Instagrams to support them at zero cost to you! The hard truth is that Etsy sellers have no ownership over their shops so if they piss off Etsy just enough, their shop can be closed down so supporting them elsewhere helps to ensure they can take their products elsewhere and still thrive doing what they love.
*puts soapbox away* How do you feel about all these new moves that Etsy has implemented and enforced?
10 comments
1000% agree with everything you said!
Etsy has gone even further down since.
Etsy has now implemented incredibly poorly programmed bots to automatically remove listings that they believe go against Etsy policy. This is all fine if the bots were only removing actually problematic listings. These bots are randomly flagging and removing listings for ‘drug paraphernalia’ when the item has absolutely nothing even insinuating drug use. Getting a sale on a listing that hasn’t been performing well lately can somehow trigger the bot to flag that listing as prohibited item as well.
Etsy’s tracking system has also been super buggy over the past half year or so. Orders that are in transit or even delivered get stuck with the ‘pre-transit’ status, which is especially problematic if you are hit with the payment reserve.
Etsy has started to roll out payment reserve on mass number of sellers with no apparent reason and of course they are not transparent about the reason they place the reserve on your shop.
These are established, long time sellers who’ve been selling on Etsy for 3-12 years and stuck by the platform through thick and thin.
In their email notifying you of the reserve placement, they explicitly say your funds will be released AS SOON AS THE ORDER DISPATCHES if it includes tracking number Etsy can confirm.
Nowhere in the email they say as soon as delivered or as soon as scanned at a specific facility.
But Etsy refuses to release the funds until its buggy tracking system changes from "pretransit"to “in transit” even though the tracking detail shows acceptance scan by the post office and the carrier’s website shows the parcel is well on its way with multiple scans throughout their network.
Another shady thing about the payment reserve is that they say they will hold 75% of your sales funds (not just your item price but the total including shipping price+any tax paid by the buyer) but never states they will give you 25% right away — this is because Etsy takes their fees, postage (if you buy your shipping labels from Etsy), and even the TAXES the buyer pays from the 25% pool. So the funds that actually becomes available to you right away is not even close to 25% and in some cases $0.
If your sale came from an offsite ad, you could end up with $0 available right away and actually end up short so the amount you are short of are taken from the funds on hold. This will bring the amount you have on reserve below the reserve minimum. Since the amount that can be released to you is limited to whatever amount you have over the reserve minimum, if you buy labels from etsy and a lot of your sales are from offsite ads, your funds on hold could constantly be below the reserve minimum. This has left some sellers without ANY payout for months with thousands of dollars held in the reserve.
This is just super shady accounting and something needs to be done but unfortunately as you said there is no alternative…
Etsy used to be specifically about handmade crafts but not anymore as they only care about more money which is why they allow mass produced factory goods and drop shippers.
Some of these shops can bring in 100 or more sales per day as they have so many items, so just think of all the fees Etsy are getting from these shops and now have come to rely on them to stay afloat, without these shops they would go bust!
However Etsy should go out and speak up to clarify that they are moving to this territory instead of going wishy washy in their statements.
People who make legitimate handmade crafts are now struggling for views or any visibility at all, you might as well go back to Ebay as despite higher sales fees at least you get more audience.
A very interesting article and you covered lots of areas.
You relayed the entire Etsy saga so eloquently!
My love affair with Etsy is over and I too would love to throw up my virtual giant finger and close my shop. But… (same reasons as you mentioned).
Did you happen to write about this on facebook? The reason I ask is that I was in the middle of writing a rant about Etsy but could never write it as well as you just did. So I would love to share your words with my audience.
There IS an alternative that’s pushing and trying to make a name for themselves. They’re small, only 2 or 3 years old, and slowly building sellers. They’re in desperate need of more marketing though. GoImagine.com is the website. Strictly handmade and they vet all applicants before approving your store. I’ve heard there’s been a few mass producers that have scammed their way in, but for the most part it’s a great site.