Well, hello there. Haven’t we been here before?
Yes, we have! In 2018 – little flashback – Etsy increased the transaction fees from 3.5% to 5%.
And they just announced that these fees are gonna go up again on the 11th of April 2022 from 5% to 6.5%.
So, let’s discuss this change – the what, the why and what you should do about it.
We’ll review why Etsy raised their prices in 2018 and if they really did what they say they would do with the funds from the fee increase. Then we’ll talk about why they want to raise their fees right now and my honest thoughts about this.
And finally, I want to leave you with three questions to help you decide whether or not it is time to leave Etsy.
Let’s dive in.
In 2018, Etsy fees went up from 3.5 to 5%. They told us the reason they were doing it was first to increase the marketing budget by at least 40% to get more traffic to Etsy.
So did they accomplish that?
The answer is definitely yes.
Back then, their revenue was what is now their marketing budget – that’s how intense the growth has been over those last four years.
To give you an idea, in 2017, they had spent 109 millions in marketing. In 2018, they had spent 158 millions. After that, it just kept increasing and increasing year after year. You can see those in the press release section on their website.
If you go to the investor reports for every financial year, you’ll see that after that in 2019 their marketing budget was 215 million, and in 2020: 500 million dollars.
They essentially doubled their budget because their revenue went up as well.
And then last year, 2021, 654 millions was invested in marketing.
They said they were going to spend more on marketing to bring more buyers to the platform, and they have definitely delivered on their promise.
At this time of writing, Etsy has more than 90 millions active buyers on their website every month.
The second thing that they had said was that they were going to create a new look for Etsy Teams and Forums. They did that too.
Is it something that we all desperately needed and wanted?
Maybe not.
Is it still important that they did it so that the community could support each other better and keep supporting each other?
I do think that the fact they tap into the community of Etsy sellers and coaches and people supporting each other through Teams is something that separates Etsy from other platforms. So I see the importance of that.
Now, did everyone’s sales explode and boom and become all crazy because they changed the look of the Teams and forum section on their website?
Probably not, let’s be honest.
The next point was: “provide support 24/7 and live chat and create a new help centre”.
Okay, there’s been some changes inside of the help centre. And if you find it, you can contact Etsy on the phone, but typically, the help centre will direct you based on the problem that you’re having to the most efficient way to contact them, which often will be in written form and not a 24/7 phone call that you can have with someone on the Etsy support team.
That’s personally what I wanted and what I thought they were going to do and that didn’t really happen.
At the moment, the help centre will say that they are available 24/7, but that the wait time is 1-2 days, which doesn’t really make sense. That’s like a weird way of going around the English language to try and say “we actually reply usually in 48 hours, not 24/7”.
That’s the first thing.
Beyond that, actually it has been much slower than that. I know many, many people I work with who have had issues they really needed to fix that were impacting their business, and got no answer from Etsy for 10 days. When they finally got an answer, it wasn’t necessarily helpful and sounded like it was a copy pasted, canned response like they’ve barely read your question.
So there is definitely a lot that can be done on the support front to help sellers.
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I think that in the last four years not enough has been done on that front, so I’m going to give Etsy a red cross on that promise.
The last thing they said they would do with this last fee increase was providing new ways to share insight into Etsy’s buyer trends and tips and advice to optimize for reach.
When I read that four years ago, I was really hoping for better shop analytics.
That’s what I wanted, that’s I think what everyone wanted.
They did release a better version of the search analytics in your shop marketing section at the back end of your shop towards the end of 2018. This is a great tool that I really like, but it still could be better – four years after the launch and it’s still lacking data.
It’s definitely not a tool that you can rely on only, as in, you need other tools than that to be able to really assess your SEO and your search strategy.
We’re not really where we thought we would be four years ago with that so I’m going to go with a little red cross again for that one.
We have an announcement or a statement from Josh Silverman, the CEO of Etsy, explaining why these fees are going to go up this year that you can read here.
The first thing that I like to point out out is that he says:
“Together, we’ve made Etsy the global marketplace for unique and creative goods.”
I’d like to point out – and we’ll talk about this a little more further along in this article – that there is no mention of the word handmade in there.
“Unique and creative” is a very, very broad way of describing a product.
Anyway, I’ll put that aside for now, we’ll come back to it later. The three key areas that they want to make improvements in – and that’s essentially how they’re justifying this year’s fee increase – are:
As I was saying before, they spent more than 600 millions last year in marketing, and they want to spend more, but they’re not really giving us a number like they had in 2018.
We don’t know what that means. We don’t know how much more they’re hoping to invest this year or the following years.
They’re talking about commercials, podcasts, billboards, influencers, email marketing… all of that to bring new buyers to Etsy.
It’s not surprising – it’s their job. They have to bring more buyers to the platform and grow their audience if they want to grow their sales, which is a way to support you as well.
So I would expect that if the fees go up, we’re gonna get more buyers or what is the point, right? That seems pretty normal to me, nothing crazy there.
In 2018, they had said that we were going to have this live 24/7 support that we never saw.
They must hear so many of you guys going “this is crazy how bad the support is” that they know it’s bad. So I am excited about that, but at the same time, I don’t want to put the horse before the cart. They’ve said that four years ago, and there hasn’t been that much of an improvement – or maybe there has been, but because there’ve been more tickets and more support requests, the improvement hasn’t been enough to catch up with the increasing demand.
So I’m glad that it’s there, that they know it’s important and they want to prioritize it. I’m just not going to get excited before I see actual results.
They’re saying that they’re going to grow the support team by more than 20% this year, which is awesome. They want quick, easy, faster email responses, expanded access to live chat, and prioritization of your most urgent request.
Again, all sounds good, but let’s see if it actually comes to life this time.
This is about making sure that the platform stays “a safe and secure destination for handmade, vintage, and special items”. This time we are hearing the words “handmade” and “vintage”, which is a little bit of a relief compared to “unique and creative goods” as I was saying before.
With that said, we also have “special items” in there, and God knows what that means. It could mean absolutely whatever they wanted to mean.
Typically, what this means is in “terms of services” there are rules, products that we want on our platform, and others that we don’t. Right now Etsy is not doing a really good job at keeping the ones that we don’t want off the platform. In the latest announcement, they’re saying that they want to expand the efforts to remove listings that don’t meet their policies and resolve issues with buyers.
I think that it’s so important because Etsy is turning into a platform that is not what it was initially. And that hurts a lot of you who are selling genuinely handmade products and competing with people who are absolutely not making handmade products.
I also think it’s hurting their brand, honestly, and that the less they care about this, the more their brand image is going to turn into “Etsy becomes eBay”, which is not what they want.
What they want might not be what you want though, and there is a big difference between 100% genuinely handmade and the definition that Etsy has about handmade, vintage, special items and unique and creative goods. In other words, it doesn’t mean that everything is going to go back like how it was in 2005 when they first launched. But if they are really making an effort in this area, I’d be personally really happy about that.
I understand that Etsy fees increase is frustrating because it’s directly affecting how you generate income and make a living YET it feels like you have no control over it. Because the truth is, you don’t.
If you want my opinion, here it is…it’s the same as it was 4 years ago when they increased their fees from 3.5 to 5%.
This price increase is neither a surprise nor the last time this will happen.
Etsy is not the business it was back almost 20 years ago in 2005 when it got started. We are talking about a business making billions, hiring thousands of employees, with 90 millions active buyers on the platform each month.
They grew by making more investments, and they will continue to do so. This fee increase is the reality of it.
These new fees are a jump, that’s for sure. But it is still a lot cheaper than most other platforms AND even though there is A LOT to say about how they could improve their support to sellers – they still also do a lot more than platforms like eBay or Amazon to educate and support their sellers.
When you’re in business you have to be flexible – things like that will happen again and again and again, on Etsy and outside of Etsy. You just have to get used to it. The people who are going to be the least affected by it are the ones that spent the least time wondering WHY and already started thinking like a business owner:
The fact is, even if you weren’t selling on Etsy, this stuff happens all the time with Facebook, Pinterest, Instagram, and even Google Algorithm.
It’s not something that you’re necessarily safe from if you sell on your own website.
I honestly think we need to reframe this conversation and to decide for yourself whether you should leave the platform. I am going to encourage you to ask yourself 3 questions:
This is not about answering “Can I afford the extra fees?”.
This is about wondering “Am I happy to be on a platform that makes those types of decisions for me? Am I happy to roll with the changes as they show up and to commit to this long-term?”.
If you want to stay on Etsy, this means adjusting to those changes when they arise. If you want to get some more freedom, it’s time to focus more on your website or start one if you’ve been thinking about it.
But if you weren’t about to close your Etsy shop yesterday, I don’t think this announcement should be what pushes you to do so. On the other hand, if you’ve been thinking about it for a long time, then yes maybe this is the push you needed.
The other question I think is important to ask is: “Am I happy with what the platform stands for and where it is going?”
Do you want to be on a platform that sells EXCLUSIVELY handmade? Because if so – that’s simply not Etsy anymore. We can spend all the time we want reminiscing about the good old days of Etsy, but it won’t change this reality. Even with more investments to shut down shops and listings that go against their terms… you’ll still have items that are not 100% handmade – if we can even all agree on what “handmade” means.
The definition of handmade is broad and Etsy is actually leaving the door open to other products when saying “the global marketplace for unique and creative goods” and “destination for handmade, vintage, and special items.”
Finally ask yourself:
“Is my business “on Etsy” or am I “an Etsy business?””
You do NOT want to be an “Etsy business”.
Etsy is a platform you use inside your business to make sales (a sales/revenue channel). But you entered an agreement with them like you would with Instagram or Pinterest or Facebook marketplace or ANY other platform.
It is not your business. You’re not an Etsy business or an Etsy shop.
You’re an e-commerce business that happens to sell its products on Etsy.
This is a subtle language difference but a MASSIVE shift in how you approach your business decisions.
The moment you think of yourself as an “Etsy seller” rather than as a “business owner selling on Etsy” – you attach a little bit of your identity to the platform.
“I AM AN ETSY SELLER”…. Like “I AM A WOMAN” – that “be” verb is the issue.
“I SELL ON ETSY” is much more detached. Much more independent. Leaves you with more control.
And when you identify yourself as an “Etsy seller”, it hurts more when things change and it always feels like Etsy should “get it” or “owes you something”. Which… I am sorry if this is a bit of a brutal reality check but … they do not.
They owe their investors some money back on their investments and this will be the north star when they make decisions.
You might be ok with most of their decisions – in that case keep your agreement with them and keep selling under the new terms.
Some of Etsy’s decisions might not turn out to be a win-win anymore and not beneficial for your handmade business anymore – then you get to break out of that agreement and leave the platform.
SO – whatever you do, make sure to never put all your eggs in one basket. If you’re selling on Etsy, make sure you’re growing that email list. If you’re selling on your own website, make sure you’re diversifying your sources of traffic so that if one doesn’t work so well after a while or an algorithm changes or something like that happens, you have other sources of traffic to fall back on.
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Thanks for the thoughtful article, Deb.
To compensate, we plan to raise our prices on Etsy. (We currently charge the same price on Etsy as our own shopify website.) Do you see any reason to NOT do that? We get about 2/3 of our sales from our own site, so we hope raising prices on Etsy will drive folks to our own site.
The increase will need to be 7.1% to make us “indifferent” to the channel they purchase from. (i.e. to make our profit the same on etsy vs. shopify.)
You didn’t mention it, but Etsy also charges us additional advertising fee (12% if a customer comes to etsy through one of their “offsite” ads). So raising their fee to 6.5% for “more advertising” seems disingenuous.
We do our own advertising. So Etsy is “competing” with us, driving up our own ad costs.
Anyway, now I’m thinking we should raise our prices by 10% (compared to our own site) to cover their “offsite” advertising fees.
Sorry for the long “comment”. But I’d love your thoughts all of this. I plan to give feedback to Etsy as well.
Hello Sotiri, Thank you for your thoughtful comment! Deb doesn’t do one-on-one Q&As over posts/comments unless you are an HQ member. As a member, you can post this to the HQ community forums for support. For now, you can ask other members of the free Facebook Tizzit Circle group for feedback and support instead. Have a good day!
Ha ha, that’s a funny reply. I’m sure that Deb knows the best way to create a “customer” is to engage with them, not tell them to go away. I’m not asking a one-on-one question; I’m asking something that will benefit all readers and move the discussion forward beyond the article’s initial conclusions.
BTW, I’m a professional e-commerce consultant. (Hence, why I don’t “subscribe” to Deb’s full HQ.) I just shared valuable information and ideas (and without trying to promote myself) with all your readers in a pleasant engaging way on what I am advising my clients. I’m willing to publish my recommendations on your site, to your benefit. So you could do me the courtesy of a real reply.
Hello! Thank you for your input. We use our blog to share industry information as well as Deb’s thoughts on topics but we save our in-depth conversation to inside Tizzit HQ so that we can reach and engage our members. You’re welcome to take the conversation to the free Facebook group as this is the free option for makers that are not members of the HQ to share their experiences and generate a discussion. Thank you!
My daughter told me to boycott Etsy because of the price increase, so like a business owner, I did a little research. Your article is PERFECT and helped me explain to her why I will not boycott Etsy, and how she should think more like a business owner rather than someone who feels they are “owed something.” Thank you!!
Hello Ellie! I am glad to hear that the article has been helpful to you! Please keep checking back for new posts. Have a lovely week!
Etsy charged me 40% in fees! I sold an item for £175 and they paid only £114 – £61 in fees! It’s staggering. I had not opted for any ad campaigns etc, this was just organic search and sale.
Thank you for sharing, JD! We hope the article can help you decide if it is worth staying on Etsy.