What has become of Etsy? What shall become of us sellers?

How did Etsy wonder so far from who they were and what they stood for in the Maker Community?  It may not seem like it, but this post is not meant to blast Etsy, it’s simply an explanation of how their decisions have affected my business and to help etsy shoppers understand why I in turn have made the decisions that I’ve made.

This last year or so Etsy has been evolving into what appears, to many of us sellers, to be a greed monster.  Sadly, it seems that they lost their way and started feeding off the very community of creative makers that helped them become synonymous with handmade, creative, and artistic.

Etsy use to be the place where Makers went to market their creations, or for folks like myself, to market supplies to help those creative people create their items.  But something changed over the last year or so.  The marketplace that had affordable commission fees started finding ways to squeeze more money out of their Makers.

First it was the subscriptions services with different levels of shop features depending on the monthly subscription fees, so the old free seller account platform suddenly became a monthly fee to have a shop with anything more than the bare bones of shop features.  Then just before the end of year holiday season of 2019 they decided that we sellers should offer Free Shipping to our shoppers for orders over $35.  That low threshold means that shipping for a $35 order in my shop would cost me about $11-18 to ship, so that leaves me with zero profit and usually a negative income sale.  If the threshold was at least higher, then I could break even on those sales rather than go negative.  

We didn’t have to participate in the Free Shipping offer, we could opt out of it, however…that meant that we would get practically zero visibility on Etsy.  That’s right, they would only be promoting shops who offered free shipping, in their Etsy search and promoted listings on Google.  I tested this to see how it would affect my shop by not participating for a week and the results were astonishing.  I went from having about 400 hits a day in my shop to having about 10-15 a day!  Wow, that made the decision pretty obvious, if I wanted my shoppers to find my shop I had to participate in this Free Shipping program. 

Etsy tried to put a positive spin on it for us sellers, they said, but don’t worry, you don’t have to pay the fee’s yourself, just raise your prices to cover the shipping costs.  Great idea!  For Etsy that is, because they make their commissions on my total sale price, so I increase my prices to average out the cost of shipping (based off the average of my last 12 months of sales) and they make more commissions off every sale I make, even though I don’t actually make more money.  But the real losers are the shoppers because anyone ordering less than $35 now pays more for every item they purchase, and those who spend more than $35 are not really getting ‘free shipping’, because they are paying for it in higher prices overall.  But it ‘sounds’ like a great deal to get Free Shipping doesn’t it? 

We sellers began to make more sales, but less profit from our sells, even with the price increases because now most shoppers would just reach the $35 threshold to get free shipping, and fewer small orders were placed because our prices seemed too high now.  But Etsy was loving it because the higher total sales that we were making meant they were receiving more income without raising their commission rates.  But we sellers sucked it up and carried on working harder for less money.

Then came this newest ‘great improvement’ from etsy with their new ‘off-site advertising’ program.  All shops who made over $10,000 in sales within the last 12 months would have the requirement of mandatory participation in this new ad program.  Those who sold less than $10,000 could opt out of they wanted to, but the google promotions that Etsy normally did would no longer include sellers who opted out.  They said this new program was going to bring more shoppers to our shops through Etsy’s off-site advertisement on google and social media sites.  Then when a shopper came to our shop and made a purchase, we would pay an ‘additional’ fee of 12-15% ad fee for that sale, and also any other sales to that person within the next 30 days.  If that shopper clicked on one of those ads again 29 days later, the 30-day time period would start all over again.  It didn’t matter if this shopper was one of our repeat shoppers already, and clicked on the ad simply because they recognized our shop on the ad and wanted to support us, and was already going to make another purchase from us…Etsy would still take that 12-15% ad commission on their purchases.

Let me break this down with some math.

This 12-15% is on top of the 5% transaction fee, plus $.20 per item listing fee, and the 2.9% + $.30 per sale payment processing fee, that we already pay.  So in the Best Case Scenario, this is how it would break down…

  $35.00 Sale, with free shipping.

  -$11.00 my cost to ship (minimum shipping cost for an average $35 sale, could easily be up to $18.)

  -$7.50 Etsy Fee’s including new off-site ad fee

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 = $16.50 I received from this sale

-$21.00 my minimum approx Cost of Goods for this sale

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= - $4.50 My Net Loss on this Sale  So I basically paid $4.50 to give the buyer my product and support Etsy, and this doesn't even account for my shipping materials, warehouse costs, my time to source the product, photograph the items, write up a listing, and physically process the order, prepare the package for shipment, and travel to the post office to send it.

This is not how you stay in business.  So, after much thought, crunching numbers, stressing about how I was going to make this work, and finally resigning to the fact that it just isn't, I decided that I simply cannot afford to continue sell on Etsy anymore due to this mandatory participation.   My only solution is a sort of work-around, but it's only for the items that I sell most in my shop -the Furls Crochet Hooks and Accessories.  So I created a new Etsy Shop, that will obviously not have mandatory participation because it is new and has less than $10,000 in sales.  

But it means starting all over without the history of over 1,800 completed transactions or the credibility of almost 500 Five Star reviews from my wonderful shoppers.  I will be starting over with zero reviews, zero shop likes, and zero loyal repeat shoppers who look for me by the shop name they've known for 2 years.  The new shop is called 'Anna’s Gotta Crochet 2' or AnnasGottaCrochet2 if you are searching for me on Etsy.

I will continue to use the original shop until I sell off my yarn, or the ‘new’ program rolls out in mid-April.  I won’t be relisting the yarn in the new shop because it will be way too time consuming to relist everything.  I hope my loyal Furls Shoppers will come to my new shop to make future purchases and leave me some reviews so I can build up my new reputation as I did in the previous shop.  I have always striven to provide 110% in customer service, and that showed in the lovely, thoughtful reviews I received over the last couple of years in my old shop.

It’s a shame that Etsy has forced sellers like myself to close their shops or create new ones and start from zero all over again just so they won’t be under the mandatory participation requirement.  I loved Etsy.  I shopped on Etsy for years and it was the first place I wanted to sell when I created my own online business to support makers with my supplies.  I just wish that Etsy would talk to their sellers before making such drastic moves that will affect them so harshly.   We sellers understand that they may want to bring in more money for themselves -but killing their seller’s businesses is not going to help them achieve that in the long run.  

Thank you for hearing me out and understanding the choices I’ve had to make.

Anna