If you haven’t heard the news, Etsy is planning a transaction fee increase on April 11. And on that same day, thousands of Etsy sellers plan to go on strike. Let’s take a look at what we know so far.
Today, we’re looking at what Etsy plans to do with 1.5% of our profits in 2022. Because that’s exactly the percentage that Etsy is planning to increase their transaction fees come April 11.
Some sellers are not happy about Etsy’s transaction fee increase, and that’s apparent by the strike they’re planning on the same day.
Let’s find out why.
Why are Etsy sellers striking?
So, Etsy is raising its transaction fees from 5% to 6.5%. For those of you keeping count, this means that Etsy’s new fees will be 9.5% + $0.45.
Here’s the breakdown:
- Etsy’s Listing Fee is $0.20 per listing
- Their Transaction Fee is now 6.5%
- And Etsy’s Payment Fee is 3% + $0.25 per transaction
Add it up, and you get the 9.5% plus 45 cents.
So, in other words, if you sell a product for $100 on Etsy, then you’re looking at $9.95 worth of Etsy fees. And of course, this excludes any additional fees for Etsy offsite ads or out-of-pocket shipping costs.
How do Etsy’s fees stack up with the competition?
You might be asking yourself, how do Etsy’s fees stack up with other online marketplaces? At the end of this article, we’ll look at what other online marketplaces are charging their sellers. So if that’s something that interests you make sure you stick around for that.
The cost of doing business on Etsy with their transaction fee increase
But out the door, as of April 2022, you can expect that about 10% of your revenue will go directly to Etsy. That’s the cost of doing business on Etsy in 2022 and beyond.
Do you think that’s a fair number? Do you think it’s too high? Let us know down in the comments below.
Thousands of Etsy sellers sign a petition boycotting Etsy’s transaction fee increase
Some Etsy sellers don’t think it’s fair, so let’s find out why not. About a week ago, a petition popped up on coworker.org from an Etsy seller unhappy with Etsy’s transaction fee increase. The petition lists a few demands for Etsy, including canceling the price increase altogether.
So let’s look at what that petition says and what Etsy sellers are asking.
The petition says that “Etsy made bank over the pandemic in 2020.” They more than doubled their gross marketplace sales, and in 2021, they kept those pandemic sales and broke their 2020 record by $3.2 billion.
In June of 2021, they “acquired Elo7, the ‘Etsy of Brazil,’ to the tune of $217 million cash.” And in July of 2021, they “completed the acquisition of Depop, a British fashion marketplace, to the tune of $1.625 billion, also primarily in cash.”
They followed up these record pandemic gains by “turning around and sticking it to their sellers by raising their transaction fees by 30%.”
Etsy’s actual transaction fee increase
Let’s clear the air really quick. So, while the petition states that Etsy is raising their transaction fees by 30%, Etsy fees aren’t actually going to be 30% of your profit. It’s just a 30% increase. So it’s still only a 6.5% fee that Etsy is stating.
It’s not going to be a 30% fee.
A hatred for Etsy offsite ads
One of the big reasons that Etsy seller fees are so expensive is that Etsy Offsite Ads pushes Etsy’s advertising costs onto their sellers by charging an additional 12% to 15% fee for each item sold through the Offsite Ads program.
“A 15% fee is charged to sellers who have never earned more than $10,000 in a year,” and these sellers are allowed to opt-out of the program.
In comparison, “other sellers pay 12% and are never allowed to opt-out.”
So, the petition is stating that thanks to Offsite Ads, “Etsy fees are unpredictable expenses that can take more than 20% of each transaction.”
And they’re saying that “Etsy sellers have no control over how these ads are administered or how much of their money is spent on ads.”
Etsy sellers demand they cancel the transaction fee increase
Reading through the petition, there are 5 clear demands listed by Etsy sellers:
- Etsy sellers want to cancel the fee increase outright.
- They want to crack down on resellers and provide a comprehensive plan as to how.
- Etsy sellers want a better support ticketing system. They no longer want to wait for weeks and months on end to get a response to their support ticket and their request.
- Etsy sellers want to end the star seller program outright. They don’t want a micro-managing and passive-aggressive tool to influence sellers’ behavior on the platform.
- Etsy sellers want the ability to opt out of offsite ads altogether. And not just those that sell more than $10,000 in a year.
What else does the Etsy petition state?
The petition goes on to state that Etsy was founded with the vision of “keeping commerce human,” which is Etsy’s tagline that we’re sure you’ve heard before.
The petition says that Esty doesn’t have to be this way. “Etsy can be a successful and profitable company while still treating its sellers fairly and ethically.”
Among many different points listed in the petition, it’s clear that there is a growing number of individuals that are not happy with the way Etsy is handling its business operations.
In terms of your Etsy business? What do you thing about the various reasons listed in the petition?
If you want to check out the Etsy petition for yourself and read more about everything that Esty sellers are asking of Etsy, then check it out here.
Why is Etsy raising its transaction fee?
Now that we’ve read from the exact petition and what Etsy sellers’ demands are, let’s take a look at the reason Etsy gives for why they’re raising their transaction fees in the first place.
So, at the end of February, CEO Josh Silverman, announced that Etsy will be raising its transaction fees this April. And in his announcement to the seller community, Josh Silverman stated three specific reasons why Etsy is planning to increase its transaction fees.
And surprisingly, none of the reasons had to do with inflation.
Regardless, let’s take a look at these three reasons and unpack exactly what they are:
01. Etsy wants to bring more buyers to the platform
One of the ways Etsy plans to do this is by increasing the amount they spend on marketing in 2022 and beyond.
In 2021, Etsy spent roughly $600 million on marketing alone. And in 2022, they plan on growing their audiences by spending more on TV commercials, billboards, paying influencers, as well as utilizing other marketing channels.
So, you might be asking yourself, “increasing marketing spend doesn’t sound like such a bad thing, and hopefully, it’ll bring in more shoppers to the Etsy marketplace.”
Well, that’s exactly what Etsy intends to do with its increased marketing budget.
Making Etsy a household name
I think we can all agree that Etsy isn’t exactly a household name, like Amazon. And not that anybody wants to see Etsy become an Amazon clone. But, we should all want Etsy to be more of a popular online marketplace.
We’ve seen more Etsy TV ads popping up over the years, but we can all agree that Etsy can be doing a little more to get its name out there, continuing to engage shoppers on their online marketplace.
Etsy wants to increase male shoppers
One of the other things Etsy has said that they really want to do is start increasing the percentage of male shoppers using the platform.
So on top of the current Etsy ads that you see on HGTV, you’re going to start to see more Etsy ads pop up on networks like ESPN.
And the bottom line is that Etsy wants to become more of a mainstream destination for shoppers in 2022.
02. More Etsy seller support
Etsy plans to increase seller support with their increased transaction fee. In 2022, they plan to grow their support team by more than 20%.
We know what some of you are thinking… 20% of nothing is still an ineffective number.
But jokes aside, we’ve seen that some Etsy sellers are pretty dissatisfied with the level of support that they receive from Etsy on a day-to-day basis. Whether sellers have technical questions about the back end of their shop, or if they have a customer dispute raised by a shopper, we all know that Etsy support can be a little lacking at times.
And this is one of the very reasons that it’s listed in the petition that Etsy sellers want Etsy to improve upon.
If Etsy can get it right, then we should see fewer wait times on support tickets and (hopefully) a more understanding level of support when working on an issue.
Fewer bots shutting down Etsy shops
Ideally, we want to see fewer bots and fewer AI shutting down shops, seemingly at random without any opportunity for an Etsy seller to state their case or appeal the decision.
All in all, Etsy increasing its level of support will be a huge blessing to Etsy sellers. One that we know many of you out there have been asking for years now.
With Etsy’s planned growth in its support team, we expect to see faster email responses, expanded live chat features, and more immediate help with urgent requests.
And we hope it comes to fruition.
03. Etsy wants to give rule-breakers the boot
Etsy is an online marketplace established on a foundation of handmade and vintage items. That’s what Etsy started as, and that’s one of the major examples listed in the petition of what Etsy sellers want from their platform.
Sure, Etsy has expanded a bit over the years to allow digital goods and goods that may be kinda skirting the line of being handmade. But at the very least, most products offered on Etsy have some level of individuality to them. And they’re not necessarily just being cranked out by some factories somewhere.
At least, that’s the vision of Etsy, and that’s what the marketplace should remain as.
Keeping Etsy unique
Now with Etsy’s transaction fee increase, they’re stating that they plan to keep Etsy products “unique.”
What we can take from this is that Etsy will continue to crack down on any shops that break the seller policies. So, all the shops out there that are skirting the lines of reselling or copyright infringement, you might wanna watch your back come April because Etsy is planning a crackdown.
Again, this is another major point that was listed in the petition that Etsy sellers want to see from their platform. Because Etsy has already listed this as something that is extremely important to them, we hope that with this fee increase, Etsy can deliver.
Bonus: Etsy’s new seller app
Another thing that Etsy mentioned in their announcement about the transaction fee increases is that they’re excited to be launching their new seller app.
If you’re unfamiliar with this, we actually talked about it in a recent article, so go check it out to learn more about it. Etsy’s new seller app should be launching to the greater seller community any day now.
If you go check it out in the app store, it’s actually got some pretty bad ratings right now… But we are interested to see how this new app will help sellers with their day-to-day once it’s fully rolled out.
Will Etsy’s transaction fee increase benefit sellers?
So there you have it, with Etsy’s 1.5% transaction fee increase, that’s everything that you can expect Etsy to improve on this year. All things considered, if Etsy can get all three of these things right then we think the price increase might not be such a bad thing.
Out of the reasons listed in the petition for why Etsy should NOT increase their prices, two of their major points are included in Etsy’s announcement for why they ARE increasing prices in the first place.
What’s most important to us is that we want to see more Etsy shoppers using the platform. Because more shoppers on the platform gives Etsy sellers more of an opportunity to sell their goods.
Why Etsy relies on its sellers
Over the last 10 years, there’s been a major cultural shift for more sustainable goods from individual small businesses. And we think Etsy delivers on that through you guys, the sellers. Without you guys, Etsy wouldn’t be a marketplace in the first place.
So let’s hope that Etsy can indeed activate more shoppers to use their marketplace, so your businesses can continue to thrive for years to come.
Other online selling fees
Alright, so at the beginning of this article, we mentioned that we’ll be sharing some fees from other online marketplaces.
So let’s take a look at what other marketplaces are charging their sellers:
Amazon charges $39.99 a month, plus 15% for every product sold.
Now, if you have an Amazon handmade account, they’ll waive that $39.99 monthly fee, but you’ll still need to pay the 15% per transaction. Now, that’s 5% more than what Etsy charges.
eBay charges final value fees, plus 30 cents per transaction.
Their final value fees are gonna vary depending on the category and the item that you’re selling, but it ranges from about 12.9% to 15%. Again, that’s at least 3% more than the fees you’d pay on Etsy.
Facebook Marketplace charges 5% per shipment or a flat fee of 40 cents per shipment that’s $8 or less.
So with the Facebook marketplace, you’re looking at fees that are about 5% less than Etsy. Although, the Facebook marketplace can be a bit of a pain to navigate online to try to find something that you want to buy.
Bonanza actually charges 3.5% per transaction, with a minimum of 50 cents per transaction.
Now, you’d also have to pay the payment processing fee for whatever service you use, whether it be PayPal or Stripe, or what have you. So, you’re looking at paying about an additional 3%, plus 30 cents, give or take, depending on the platform you use.
Still, that’s about 5% less than the fee that you’d be paying on Etsy.
But it’s also important to remember that Bonanza is definitely not a household name, so you’re not going to have nearly as many shoppers using that platform.
Which platform is best?
Now, ultimately selling on Etsy or selling on another platform is entirely up to you and your business. You want to make sure that the platform you’re selling on has a good pool of shoppers that use it, as well as fees that aren’t going to be too outrageously high that you’re not gonna make any money.
Of the major players, eBay, Amazon, Etsy… Etsy has the lowest fees.
Understanding your profit margin on Etsy
With the cost of doing business on Etsy going up, gas prices increasing, and inflation taking a toll on everything, now, might be a good time to take a step back and really look at what your profit margins are.
By doing this, you can ensure that you’re continuing to make money for your business.
If you’re not sure how to calculate your profit margin, it’s really easy to do. All you need to do is take your revenue, minus the cost of goods sold, divided by your revenue, then times that by 100, and then you have your profit margin.
Now, profit margins will vary wildly depending on the type of product that you sell, but generally speaking, you want to keep your profit margin between about 5% to 20%.
We think that you can keep your profit margin around at least 10%, as long as you aren’t pricing yourself out of your individual market.
Now, if calculating your own profit margin sounds confusing to you, that’s okay. We actually went ahead and created a free Etsy fee calculator that you can use to figure out your individual profit margin for your business.
Now might be a good time to increase your prices on Etsy
So, with Etsy’s price increase, now is the best time to jump in and figure out how much money your individual business is making with every sale.
We’ve seen that a lot of sellers are increasing their prices this year, whether it be because of Etsy fees or just the overall inflation and the cost of goods to do business is going up. This is something that consumers as a whole are generally expecting this year.
So don’t be afraid to raise your prices in order to maximize your profits for the year to come.
So let’s ask you this, how do you feel about Etsy’s transaction fee increase?
Do you think Etsy can deliver on the three items listed for why they’re increasing these fees?
Do you want to see more shoppers using the Etsy marketplace?
What about better support staff for Etsy sellers?
Do you want Etsy to crack down more on resellers?
What are your thoughts on the petition and the planned Etsy strike? Will you be participating?
Let us know down in the comments below and we’ll see what next week has in store for us.
We want to thank you for reading this article, and following along as we navigate Etsy and the world of e-commerce.
As always, happy selling!
9 replies on “Etsy Transaction Fee Increase | Etsy Sellers Strike”
02. More Etsy seller support
‘more’ support? Sounds good, bc seller support on etsy is microscopic. But will never be true.
03. Etsy wants to give rule-breakers the boot
Haha, that was funny, LOL! You may report illegal shops and shops who are selling neither handmade nor vintage but mark their items as that, although it is obviously some cheap Chinese garbage a 1000times, Etsy will not shut those down. Why not? Bc they are still making so much money, and this is better than being honest and stand for their own rules they had when Etsy was a small platform. High moral, but nothing behind it, $$ in the bank is far more important. Etsy is not a handmade/vintage platform any more, this was long ago, now, it is definitive another amazon with higher prices (for both sellers and buyers).
I think Etsy is making significant profit charging fees on every little thing, e.g. fees on my shipping costs! What do they have to do what I pay for shipping to the shipping company? Fees for something, they do not have any work with this.
I don’t agree that a strike is at all useful. It only hurts the seller not Etsy, not unless the numbers were staggeringly bigger (and that ain’t gonna happen). But I do support using a collective voice to convey such messages, whether or not that helps remains to be seen. As a long time Etsy seller I simply see this as a continual issue of trust. Etsy has always had a certain disdain/disrespect for its sellers. This goes all the way back to the beginning. It’s nothing new. It’s the one thing Etsy has been consistent about. You see it every day in how they communicate (or not) with sellers. And while Etsy is where I make the most money, it’s also the platform I have the most contention with. I pay double Etsy’s fees on another platform, quite happily, no complaints. For me, the rise in Etsy fees isn’t a problem per say, it’s all the other BS we have to put up with from them. Ultimately, we’ll pay Etsy more, but we’ll get less in return.
The primary point of the petition that this overview fails to address: why should what etsy wants to do with their business come out of the pockets of the sellers when they’re making such huge profits themselves.
That is a great point to consider and is largely the overall sentiment of the petition – Thank you for sharing!
I could see the handwriting on the wall …. Etsy is now public and is beholding to their stockholders. One “hidden” percentage is in the shipping. Sellers were encouraged to raise their prices and offer “free shipping”. By doing so Etsy makes more on transaction fees and still takes a percentage of the shipping costs. I do realize that there are credit card fees that Etsy must pay. All things need to be taken into consideration. I fear what we will see is a consistent increase in fees over which the seller has no control. Customer service definitely needs to improve greatly and sooner than later.
Great point, Karen! Improving customer service and support would be a huge step in the right direction 🤞
I drive my own traffic to my Etsy shop via specific social media use, and hate the idea of being forced to pay for marketing that I can do better myself. And Star Seller totally sucks. But I am very happy selling on Etsy, and have no objection to the transaction fee increase.
Thanks for sharing, Marsha!
Etsy is already an Amazon (EBay) clone. The platform is FILLED with resellers of made-in-China junk, “psychic” services, electronics and sex toys. We are told to report these shops but, as long as these shops are making sales, Etsy turns a blind eye to these shops.