Yesterday morning, Etsy sellers went on strike in response to a 30% fee increase implemented by the successful e-commerce marketplace. More than 50,000 have signed a petition to cancel the fee hike and to work with sellers to make the online craft retailer profitable for both parties.
News of the fee increase came after another year of record profits for Etsy, fueling anger and resentment from their independent sellers who believe they are the lifeblood of the site.
What Are These Fees All About?
In February, Etsy announced plans to raise its transaction fee from 5% to 6.5%. After this initial announcement, their shares were trading up 11%. However, their sellers were outraged.
“Increasing seller fees by 30% after two years of record sales is nothing short of pandemic profiteering,” says Kristi Cassidy, who drafted the initial campaign. With the fee percentage doubling in less than four years, Kristi is rallying her fellow sellers against what she considers to be an act of avarice from a business which falsely claims to be interested in that human touch.
“In a time of increasing automation, it’s our mission to keep human connection at the heart of commerce,” says Etsy. “That’s why we built a place where creativity lives and thrives because it’s powered by people.”
Those on strike are also demanding an end to Offsite Ads, which can cost a seller an additional 12-15% fee per item.
“Etsy fees are an unpredictable expense that can take more than 20% of each transaction,” explains Kristi.
The Sellers Speak Out
Wealth of Geeks talked with several Etsy sellers about their experiences working for the e-commerce site.
“There’s just something kind of special about a place where people who make stuff they love can come together and share those things with other people,” says Caroline L, who has sold handmade stickers and buttons in her Etsy shop since January.
Although she is new to the platform, what she noticed first when she started IDon’tCarolineArt were the fees. “It’s disheartening to see the site continue to raise the fees we as sellers have to pay to continue to use their platform,” she says.
In addition to having to pay for Offsite Ads and fee commissions, Etsy strongly encourages its sellers to offer free shipping, something Caroline says makes the price look unattractive to customers.
Justin Cross started selling 3D printed memorabilia and wall mounts in 2020. At first the fees may have felt like an acceptable evil, but with success came even more expenses for Justin. Etsy charges “unavoidable marketing fees because of the selling bracket I’m in,” he says. “Any sellers who make over $10,000 are required to opt in to the offsite marketing.”
In response to Etsy’s statement that they plan on reinvesting money earned from the fee increase, Justin has this to say: “Why do they get to keep their profits as a big business but we as the sellers have to lose ours?”
Not all sellers see the company’s growth as beneficial to them. “I’m fine at the level of orders I get now,” says Sam Popik. Sam has been selling on Etsy since 2015 when they were thirteen. Sam makes everything from candles to knitted coasters. For sellers like Sam, the craft site offers a creative outlet for hobby making and some side hustle income, but the goal is not to turn it into a primary business.
Like many others who signed the petition, Sam is skeptical of Etsy’s practices. Their outlook is simple: “Artists and crafters like me make their business possible, so we should get a say in fees.” Sam wants “more people to see the bottom rung workers of every company as respectable positions, even compared to the CEO or managers.”
Those most impacted by the fee increase include marginalized communities who might encounter difficulty working within a traditional career model.
“I’m neurodivergent (autistic and ADHD),” says Harry Burger, while “many others are women, single parents, LGBTQ, BIPOC, or disabled.” Harry is a mechanical engineer who sells 3D printed wax seals and signet rings, something he has done for Etsy since 2012. Harry remembers a time when Etsy was a B Corp. Fees were low, he says, and the company prioritized their company values over profit.
“For many, this is our only source of income at present because these issues make it more difficult to get or maintain a W-2 type job,” explains Harry.
Much of his problems with Etsy resemble conflict between a rideshare service such as Uber and their drivers, who are considered independent contractors. Harry believes these companies abuse that classification, and instead, he refers to himself as a “Dependent Contractor.”
Etsy’s Emphasis on the Future
Etsy, which launched in 2005, combines the unique experience of exploring a craft fair with the ease of shopping online. The Brooklyn based company has long taken pride in creating a platform to support local sellers.
The company plans on reinvesting their profits from the fee increase to look towards the future of their company, whose success amidst pandemic online shopping is undeniable.
Chief Executive Josh Silverman says, “We are competing against the biggest names in e-commerce and all of retail, but we believe we have a real opportunity to win.”
Etsy’s shares increased ninefold between March 2020 and November 2021.
The strike is set to last for a week, as sellers hope to get Etsy to change their decision. The e-commerce site has yet to respond to the sellers.
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This post was produced and syndicated by Wealth of Geeks.
Featured Image Credit: Unsplash.