Etsy Announces It's Found a New Way to Gouge Sellers

Illustration for article titled Etsy Announces It's Found a New Way to Gouge Sellers
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Etsy is rolling out a new campaign for offsite advertising that automatically enrolls its sellers and charges them a fee for sales from those ads, but some sellers won’t be able to opt out—meaning they’ll pay for the service whether they like it or not.


Etsy announced the rollout of the so-called “risk-free advertising” in a blog post on its seller forum this week, billing the service as a benefit to users who will only pay for ads that translate to sales. Touting its “budget and expertise,” Etsy said that ads will run on sites like Google, Facebook, Instagram, Pinterest, and Bing, and if one of those ads leads to a sale on a seller’s shop within 30 days, they’ll then pay an advertising fee. An existing ad tool, Etsy Ads, will only allow users to run ads on Etsy rather than other sites, the company said.

In theory, this should benefit Etsy sellers, as they won’t be paying for unsuccessful ads. But the devil’s in the details, and Etsy is taking a pretty significant slice of those successful sales for itself. If users make less than $10,000 in a year, the advertising fee will be 15 percent. These users will be automatically enrolled but can choose to disable Offsite Ads. Sellers who make more than $10,000 during a 12-month period will pay a discounted ad fee of 12 percent—but they also won’t be able to opt out of the program.

Etsy said that “most sellers” will see roughly one in 10 sales from Offsite Ads, and again, users won’t be required to pay for ads that don’t net them any sales. As an example, Etsy says that for a shop earning $1,000 per year—where 10 percent of those sales came from Offsite Ads—would pay $15 in ad fees (at 15 percent). By contrast, someone who earned $10,000 with the same Offsite Ads sale conversion would pay roughly $120 (at 12 percent). But the mandatory advertising fee is tacked on top of fees sellers are already required to pay Etsy, including transaction and payment processing fees—a fact not lost on Etsy sellers.

Sellers in an Etsy subreddit debated the merits of the new system, with most agreeing that mandatory participation in the program for high-earning shops is wack. Some said the system is better than the one currently in place in that sellers won’t be forced to pay per click. But others, again, noted that the 12 percent cut is an added cost to sellers, who already pay fees on each sale. These users described the change as “fucked up,” “absurd,” and even “extortion.” Etsy did not immediately respond to a request for comment about seller frustration over mandatory participation in the ad program for high-earning shops.

In a statement to Gizmodo by email, a spokesperson for Etsy said the company was aware that some sellers are frustrated but stated that options about the change are varied and shared a document with screenshots of some positive comments on social media.

Many sellers asked us for marketing products that give them more control with less risk, and we’re excited to evolve our advertising services to directly address this feedback,” the spokesperson said.Offsite Ads will help sellers reach tens of millions of potential buyers off of Etsy, without having to pay any fees unless they make a successful sale. While we understand that changes like these can be an initial cause of concern, we’re confident that once Offsite Ads launches sellers will see the benefits of this powerful new marketing tool.”


Here’s the thing to remember here: Etsy is a business that itself is looking to profit from sales on its site, so more offsite advertising that leads to successful sales directly benefits the company. Sure, the fees from those sales may be small on their own, but taken together with costs to the seller in total fees, materials, and other expenses, those charges start to add up. The benefits will certainly vary based on the individual shop. But no matter how you cut it, forcing sellers to pay for something some may not even want is shitty—particularly if they’re already giving Etsy a cut of everything they make.

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My first thoughts (I don’t use Etsy):

1. Extra sales are good, if they can prove that ads led to the sales. (Not just “they saw an ad on Facebook and 29 days later bought a thing”).

2. I wonder if the metric used above could be game-able. “Please clear your cookies/shop in incognito mode before buying my item, so Etsy doesn’t take my money”.

3. Sellers that run really tight margins or that make really work intensive items (ie: I sell all the things I make, my limiting factor is making items) may need to increase their prices to offset the loss from the ads.

4. I can’t see why it wouldn’t be opt-out-able.