Etsy is raising its transaction fees on April 11th from 5% to 6.5%

Etsy held their Q4 2021 earnings call at the end of February and during the call Etsy announced that they would be raising seller transaction fees from 5% to 6.5% on April 11, 2022, despite record-breaking sales gains, attributed mostly to pandemic spending. You can read Etsy SEO Josh Silverman's announcement but before you work yourself up over this news, take a deep breath because it's not the end of the world!

For a $35 sale including shipping, that's about a $0.52 fee increase. I realize it adds up but the cost of literally EVERYTHING has gone up over the past few years and if you really take a hot sec to understand how hard Etsy actually works for you and how many millions of dollars they spend every year supporting us and driving traffic to our shops, then it's kind of something to celebrate! For a small increase, bring on more of it PLEASE! And Etsy WILL be bringing more of it, by investing in more programs to support sellers (keep reading).

It's incredible to think that Etsy hasn't raised their transaction fees since July of 2018 when they went from 3.5% to 5% (and added shipping charges into those fees). That was almost 4 years ago! FOUR!! And their overall fee structure is still lower than other competing e-commerce marketplaces out there, don't forget that little fact. The $0.20 per listing fee hasn't increased, neither have the credit card fees or offside ad fees (eye roll, I know I know, I wish we could opt out too) if you were wondering.

To offset the 1.5% (technically it’s a 30% increase, we will be paying 30% more in transaction fees than we were prior to April 11th), you can simply find ways to cut costs and/or you can increase your prices a bit. Just think of it as you do with any USPS or shipping carrier price hike, or inflation, and be thankful that it doesn't happen every year! But whatever you do, think of it as a positive change and you'll get positive results. If you only view Etsy as a money-grabbing corporation that’s out to get you and ruin your livelihood, then you're probably not going to have a positive experience on the platform.

Etsy has encountered a tremendous amount of growth over the past few years, nearly doubling their amount of buyers from nearly 46M in 2019 to 90M in 2021 and the number of sellers has grown from 2.5M to 5.3M in the same number of years! Those numbers blow my mind! Oh the opportunity!! That’s how I think of it, not that Etsy is greedily taking more profit from us sellers. They actually need more money to support us (source: Q4 2021 Etsy Earnings Reports)

And just a few weeks ago, Etsy named two women to their executive team - a new Chief Operating Officer promoting from within, and they created a new Chief Human Resources Officer position. While reading about these women, I can’t help but think they will contribute to positive changes for the company!

Let me summarize how Etsy is going to invest the extra fees that they will be collecting from sellers:

They are putting even more money into marketing over various channels like TV, influencers, podcast marketing, etc., bringing increased traffic to our shops (yay for more influencers, imagine yourself getting featured and how that would impact you!!)
They are growing their support team by 20% to be able to help and accommodate sellers (Etsy Support for sellers has been huge complaint especially over this past year and this is a welcome improvement!)
They are increasing their investment in teams and technology and will be expanding their efforts to remove listings and shops that don't comply with their guidelines (hallelujah!)

Hopefully this has helped ease your mind a bit about the increase! Of course no platform is perfect and I’m not saying Etsy is, but I still think it’s the best marketplace for us vintage sellers to do our thing.

So I know your big question is, “How the heck do I counteract this increase? I can’t raise my prices any higher and still compete!”

There are a few things you can do to offset the fee hike:

1) Raise your prices, aim for between 3%-5% or do your own math to figure out how much makes sense for you. Remember that you are a trusted brand - customers don’t only factor in price when they choose to shop with you so don’t for a second think that you need to offer items at rock bottom pricing in order to make sales (this is a pep talk for another day!)

2) Find ways to lower your business expenses - i.e. can you leverage more used packing materials? Is there anything you’re “wasting” money on that you can remove from your business?

3) Be smarter about sourcing - maybe focus on more profitable inventory to give you more bucks for your time.

If you feel like you’ve just totally had it with Etsy, you can also consider leaving the platform for another, or selling from your own website instead. Maybe you’re ready to jump out on your own and this may be a good time for it!

You’ve probably heard by now that there’s a petition going around created by sellers with a list of demands/grievances along with a planned strike during the week that the price increase goes into effect (April 11th). You can check that out here.

So how are you handling this change? Whatever you do, remember that this is your business, even if it’s a side gig, and facts and reason should be driving you to make decisions! Leave me a note in the comments and let me know your thoughts!

Sources:

Etsy Earnings Call and Presentation 2/28/22: https://investors.etsy.com/events-and-presentations/event-details/2022/Q4-2021-Etsy-Inc-Earnings-Conference-Call/default.aspx

CEO Josh Silverman’s Fee Increase Announcement: https://www.etsy.com/seller-handbook/article/our-continuing-investment-in-etsys/1074014040185

Share your feedback on the fee increase with Etsy and read an FAQ about the fee changes in the Etsy Forums: https://community.etsy.com/t5/Announcements/FAQ-Transaction-Fee-Update/td-p/137606561

We'll be covering ALL the details and I'll be answering ALL the questions about the changes in the Etsy Vintage Mastermind Group, join us there! Members are always informed and know how to handle big changes like this without getting distracted!

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