Etsy sellers are furious over new mandatory ad fees

&gt; If you’ve made more than 10,000 USD (approximately 7,800 GBP) in sales on Etsy in a 12-month period [...] you’ll be required to participate for the lifetime of your shop<p>That&#x27;s not exactly what I think when I read &quot;biggest sellers&quot;. That seems like a remarkably low cutoff.<p>Also, if you don&#x27;t need&#x2F;want to grow and&#x2F;or you have low margins, this could wipe you out. 12% revenue of _any_ orders within a 30 day period of an ad click[1], effectively at Etsy&#x27;s discretion (how can you challenge that someone clicked, or disagree with how hard they are pushing your products - especially noting that they have a binding arbitration clause[2]), could be a huge percentage[3] of your total sales.<p>[1] &quot;If such advertising includes your listing, a buyer clicks on it, and then places any orders from your shop within 30 days of that click, you will be charged an advertising fee on these orders&quot; <a href="https:&#x2F;&#x2F;www.etsy.com&#x2F;uk&#x2F;legal&#x2F;fees&#x2F;" rel="nofollow">https:&#x2F;&#x2F;www.etsy.com&#x2F;uk&#x2F;legal&#x2F;fees&#x2F;</a><p>[2] s.11 <a href="https:&#x2F;&#x2F;www.etsy.com&#x2F;uk&#x2F;legal&#x2F;terms-of-use#etsydisputes" rel="nofollow">https:&#x2F;&#x2F;www.etsy.com&#x2F;uk&#x2F;legal&#x2F;terms-of-use#etsydisputes</a><p>[3] Up to $100&#x2F;order - &quot;There is no limit to the number of Offsite Ads fees you may be charged on Attributed Orders, but the total Offsite Ads fee you’ll pay on a single Attributed Order will not exceed $100 USD.&quot; <a href="https:&#x2F;&#x2F;www.etsy.com&#x2F;uk&#x2F;legal&#x2F;fees&#x2F;" rel="nofollow">https:&#x2F;&#x2F;www.etsy.com&#x2F;uk&#x2F;legal&#x2F;fees&#x2F;</a>

On the one hand, this would be great if it was all opt-in.<p>On the other hand, this is nutty for any business running on low margins or with limited supply (and a sufficient customer base that they don’t need advertising to sell out).<p>A lot of small business owners aren’t great at marketing, and having a push button solution is great. Forcing your larger sellers into something that might not even need is borderline predatory.<p>When I clicked through to read their announcement I assumed they’d address some of these concerns, but nope. So, if I run a low margin shop and make 10% on each sale, I’m now underwater by being Etsy.

&gt; If a shopper clicks on an Etsy-funded ad featuring one of your listings on Google, Facebook, Instagram, Pinterest, and Bing and makes one or more purchases from your shop within 30 days, those sales will be attributed to Etsy’s advertising and you’ll be charged an advertising fee on the total value of that order.<p>This kind of stuff is why tracking is so pervasive. Etsy is relying on being able to uniquely track a shopper for at least 30 days to make this work.

&quot;If you’ve made more than 10,000 USD (approximately 7,800 GBP) in sales on Etsy in a 12-month period you’ll benefit most from offsite advertising. So, you’ll be required to participate for the lifetime of your shop and you’ll get a discounted advertising fee.&quot;<p>It sounds like the sort of thing a 1930&#x27;s Chicago gangster would think up.<p>It&#x27;s like when Mikey No Thumbs shows up once a month to pick up a fat wad of cash in a plain brown envelope. And you&#x27;d better not be light this month. We know how much you sell.

I&#x27;ve got no horse in this race, but this really seems like an egregious abuse of etsy&#x27;s monopsonist position and is, like, just incredibly slimy. (&quot;How can we raise our fees dramatically? Hmm, how about forcing everyone into paying for &#x27;marketing,&#x27; without any connection to our cost of providing that marketing?&quot;) Or is the team at etsy so delusional as to believe customers will welcome this mandatory charge for etsy&#x27;s autonomous advertising service?

Well the easy, non-controversial way to do this is to just introduce it as an easy and awesome new product, that stands on its own and let people opt-in at their own discretion.<p>By auto-enrolling everybody and requiring them to opt-out, that’s creating a huge controversy just asking for backlash. And then forcing anyone who makes over $10k to now be required - that’s a strong hand they’re playing.<p>Can only point to some desperate times? Seems to be a sure way to alienate your most successful sellers.

I&#x27;m one of those sellers who is being forced into Etsy&#x27;s new ad program. It is frustrating and obnoxious, but I can&#x27;t say it is surprising given the policy changes they&#x27;ve been rolling out the past few months.<p>It seems to me that online marketplaces like Etsy find their early success by bringing buyers and sellers together and just letting them do their thing, but as the marketplace becomes more established it&#x27;s relationship with sellers inevitably turns adversarial.<p>I feel like we need some form of regulation to limit how marketplaces like Etsy can dictate how their sellers conduct business. Amazon has a program that allows &quot;business&quot; customers to place an order and pay the invoice 30 days later. Since Amazon only pays out every 2 weeks, this means I can be made to wait up to 6 weeks to be paid for an order. There is no way to opt out of this and I would be penalized if I refused to ship these orders.

Great idea to drive away the sellers who need you the least, who most have an established consumer base and the means to set up their own storefronts.

The users who can&#x27;t opt out are subject to a 12% fee, but this is on top of the the existing 3%-4% transaction and payment processing fees.

I know this sounds crazy, but for E-Commerce, you never go with all these third party &quot;platforms&quot; as your sole business strategy.<p>1. First of all, you can&#x27;t differentiate much in terms of offering and most of the time, you&#x27;re put in a position of having to compete by price if there are similar offerings in the same platform.<p>2. Believe it or not, it&#x27;s only a matter of time when other sellers (particularly from CN) will replicate your offering if they ever find it to gain traction and will force you to compete by price.<p>3. Because you&#x27;re pushed into a red ocean, you barely get to build your brand and curate your own email list.<p>4. Finally, you can avoid all these random fees by having your own shop. These fees can make or break your business especially if they force you to increase the price of your products.<p>I&#x27;ve been in the E-Commerce (mostly drop-shipping) business for many years now and I will never recommend anyone to solely rely on Amazon or Etsy or Ebay or even Shopify. Get a domain name, roll out something quick. Use WooCommerce or Magento or whatever it takes. Start off with a simple shared hosting account if you can&#x27;t afford to pay a lot, use the rest of the money to advertise on Facebook&#x2F;Instagram and start building your own list. When you grow, move to something like AppEngine on GCP or some managed dockerized hosting on AWS so that you don&#x27;t need to worry about devOps.<p>You&#x27;d be surprised, how effective this strategy is over the long term, than having to sell your data to all these platforms which you&#x27;re helping to grow by paying your money to them and as well as data. I know atleast Shopify effectively sucks your analytics from your shop and resells it to you back as a premium offering called &quot;Shopify Analytics&quot; (<a href="https:&#x2F;&#x2F;help.shopify.com&#x2F;en&#x2F;manual&#x2F;reports-and-analytics&#x2F;shopify-reports" rel="nofollow">https:&#x2F;&#x2F;help.shopify.com&#x2F;en&#x2F;manual&#x2F;reports-and-analytics&#x2F;sho...</a>).<p>Install Google Analytics and Tag Manager, read some tutorials and setup event tracking. Feel free to ping me if you need help. You&#x27;ll then start to see how much valuable data you&#x27;ve been giving away to these leeches for free (sometimes even paying a fee to them to steal your data).<p>With all of the above and the right combination of products, UX, ads, you can easily make much more than relying on these third party platforms.

I think Etsy is advertising itself and passing the buck to the sellers on its platform.<p>The ad will mention the seller&#x27;s products but also say Etsy. So free advertisement for Etsy.<p>Very underhanded!

Huh!<p>&gt; If you’ve made more than 10,000 USD (approximately 7,800 GBP) in sales on Etsy in a 12-month period you’ll benefit most from offsite advertising. So, you’ll be required to participate for the lifetime of your shop and you’ll get a discounted advertising fee.<p>If you make a living off your Etsy shop then surely you will have more than 10K sales a year. Even if not in the USA, I am originally from Hungary and the minimum yearly wage is 6K USD.<p>Let&#x27;s run another calculation. If you are selling at an average price of 20 USD (which can be just a t-shirt) then you only need to sell four things every three days. That&#x27;s... not a lot.

Looking at this from a numbers game, as Etsy is probably doing, this is a guaranteed money source for them. All they have to do is claim they are running internet ads for your product. Whether that ad worked or the sale just happened based on normal Etsy traffic, is probably not disclosed. Hence Etsy has 100% control of the information and therefore can bet, let&#x27;s say $1M per day towards this, but on the flip side, can guarantee that a 12% fee increase (for the stores that will be required to pay it) will already be $2M per day.<p>My numbers are fake but you get the gist.

&quot;We&#x27;ve decided to help ourselves to 15% of sales. If you don&#x27;t like it, get the hell off of our platform.&quot;<p>Are there any platforms &#x2F; marketplaces that don&#x27;t treat their vendors like garbage?

Does anybody know what happened to the small businesses that used to use Etsy? Did another service open up for them? I suppose they may have gone to Shopify, but that fragmentation of storefronts reduces discoverability. The ability to search a vast set of niche widgets was probably Etsy&#x27;s best selling point.<p>Every small business having its own storefront, and may or may not be doing SEO properly, is likely to mean less aggregate sales for all those businesses.

I should read my Etsy email more often. Now I need to move my little sideline to a different market. Etsy is getting all greedy. Time to make my own website and cut out a middle-bot.<p>Since most of my sales are from my own word-of-mouth - a google ad is a worthless investment. All that will happen is someone who has a gmail account will purchase from me, google will notice this, present an ad then I&#x27;ll get charged for the ad on next purchase. Nice little earner for Google and Etsy but useless to me.<p>Opt out? Sure, but I&#x27;m sure there&#x27;s a stinger somewhere in the terms that will cost me in some obscure way. No thanks. Its actually worth me spending 40 hours figuring out an alternative. Then be done with them completely. More likely I&#x27;ll replace Etsy with a simple investment of 5 - 8 hours.<p>For those curious, I sometimes make wooden furniture as a hobby. These are one-offs. Sometimes on commission&#x2F;custom order but otherwise I usually sell one piece a week. So no, I don&#x27;t use google ads etc. I&#x27;m not a mass-produce kind of operation and my customers know it. Its part of the appeal.

This strikes me as the day Etsy becomes the MySpace of their world.<p>They do need to make money. But the marketing hype around this change just seems so dishonest.

We changed the URL from <a href="https:&#x2F;&#x2F;www.etsy.com&#x2F;seller-handbook&#x2F;article&#x2F;introducing-etsys-risk-free-advertising&#x2F;729663416588" rel="nofollow">https:&#x2F;&#x2F;www.etsy.com&#x2F;seller-handbook&#x2F;article&#x2F;introducing-ets...</a> to a third-party article, which hopefully provides a clearer picture than a corporate press release.

It seems like they&#x27;re trying to replicate the Wish advertising strategy.<p>Show you ads with relevant products on Instagram&#x2F;Facebook that all link to different products on Etsy. They probably need more sellers in order to fill the ads with relevant enough products.

Its win win for store fronts.. prices will just go up to compensate.

Etsy is really not a good platform. There’s gotta be a better way to set up these markets. It is now a little more than trivial to roll out your own web store at zero cost. Why pay these exorbitant fees?

Etsy is buying advertising on other sites, to the benefit of their customers. In the event that traffic converts, they take another 12&#x2F;15% on top of the existing 3-4%.<p>This sounds like business the stores wouldn&#x27;t be getting otherwise (so it&#x27;s incremental), and all at the cost of what you&#x27;d be to an affiliate network anyway. Forced participation if you do more than $10,000 is ridiculous, but I otherwise fail to see what the uproar is about.