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Etsy sellers are furious over new mandatory ad fees
- mreome 7y agoThe users who can'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.
- deleted 7y ago[deleted]
- tomnipotent 7y agoOnly on orders where the traffic is from this advertising service. Dishonest to make it sound like all orders are being dinged.
- deleted 7y ago[deleted]
- i_am_nomad 7y agoBut how much current, organic traffic would this be hijacking?
- tomnipotent 7y agoHow much traffic are seller's getting from Etsy itself? Should Etsy charge more for the traffic that they send to sellers that they wouldn't otherwise have? Everyone wants to pretend that seller's are victims, but let's not pretend that any of them are any more loyal to Etsy than Etsy is to them. How many seller's are in multiple marketplaces? All of which charge much more than what Etsy has been charging for the amount of free traffic they're providing. The marketplace market has evolved. You can sell your products on Amazon, Etsy, Walmart, NewEgg, Rakuten, and eBay at the same time. An entire industry of SaaS tools has evolved to manage this. Etsy has been way behind the in what they're charging sellers, and none of the seller's benefit if Etsy goes under. This is what other marketplaces charge, for ALL orders. Providing the same service as Etsy. Amazon: 6-20% (15% average) NewEgg: 8-15% Walmart: 6-15% eBay: 10%+
- stordoff 7y agoOn any sales within 30 days of an ad click. Genuine scenario from a few months ago: I'm looking at some shelving on Etsy, I mention it to my mother (using a specific seller's name) to double check it's right for what we need. She clicks the first Google result (which in this scenario could very easily be an Esty ad), and now Etsy are taking £12 extra from a £100 order without the seller being able to opt-out. For what? They haven't driven any traffic.
- tomnipotent 7y agoIt's unlikely the Etsy ads will be targeting stores names, but generic terms they can match to their market place in real time. It's far more likely in this scenario, there will be little confusion between the generic text ad and the first organic link that clearly has the seller's name in it.
- stordoff 7y agoI don't see why they _couldn't_ - they specifically say "All of your listings or shops may be promoted". Even if they don't, it still falls into a similar trap. A few weeks prior (when I was still looking for cheaper alternatives), I mentioned off-hand that I've found one option, and it's on Etsy. Did she Google "[generic term] + Etsy" (I only found one seller, so it's tantamount to searching the seller's name)? I've no idea, but if she did, they're probably taking 12%.
- tomnipotent 7y ago> I don't see why they _couldn't_ It's not easy to automate, or to build a model that demonstrates that targeting this low-level will have a positive ROI. Advertising is a fickle game, and I don't see this being successful without building it on a broad program that allocates spend by some segmentation of their sales (e.g. product category).
- shostack 7y agoDynamic creative from a product feed setup to serve to a retargeting audience of people who visited those pages is not a terribly difficult ad task and certainly something Etsy is capable of doing from an engineering standpoint. I'm not quite sure why you feel it isn't but I'd like to better understand your perspective.
- sk5t 7y agoI've got no horse in this race, but this really seems like an egregious abuse of etsy's monopsonist position and is, like, just incredibly slimy. ("How can we raise our fees dramatically? Hmm, how about forcing everyone into paying for 'marketing,' without any connection to our cost of providing that marketing?") Or is the team at etsy so delusional as to believe customers will welcome this mandatory charge for etsy's autonomous advertising service?
- deleted 7y ago[deleted]
- mreome 7y agoThe really bizarre thing to me is the idea of forcing it on the biggest sellers. First because those sellers are obviously doing fine without this "feature" and second because if they are making hand-made items then they may already be selling at or near their capacity.
- AlexandrB 7y ago> 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. 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.
- mreome 7y agoWell it seems Etsy will determine if a sale "will be attributed to Etsy’s advertising" so this tracking could be very basic and inaccurate, as long as it only generates false positive matches between a sale and an ad click-though.
- gentleman11 7y agoI used to think etsy was cute and fun, but if their tracking is that intense, and they treat their sellers like that... the warm and fuzzy feeling doesn't really stick around
- leeoniya 7y ago> I used to think etsy was cute and fun to the tune of ~$100M? https://www.crunchbase.com/organization/etsy https://www.crunchbase.com/organization/etsy
- skinnymuch 7y agoEtsy is a $6B public company now
- leeoniya 7y agomy point is, they were never "cute", except maybe when it was just an idea in someone's garage and had near 0 brand recognition.
- jSully24 7y agoThis strikes me as the day Etsy becomes the MySpace of their world. They do need to make money. But the marketing hype around this change just seems so dishonest.
- nonsince 7y agoGreat 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.
- IAmEveryone 7y agoOTOH, maybe they feel larger sellers undermine the "handmade" spirit, and don't particularly mind some of them leaving?
- wjossey 7y agoOn the one hand, this would be great if it was all opt-in. 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). 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. 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.
- mreome 7y agoEspecially given that Etsy is supposed to be primarily for hand-made goods. Their top sellers are very likely already selling items at the speed they can make them, why would someone want Etsy to take a cut of their sales for advertising when they can't actually sell more?
- bryanrasmussen 7y agosupposed to be but probably isn't https://www.dailydot.com/irl/etsy-reselling/ https://www.dailydot.com/irl/etsy-reselling/
- adrr 7y agoThat was the original model but that doesn’t really scale. It’s primarily another channel for mass manufactured stuff that your can find on aliexpress.
- dawnerd 7y agoI got into it with their support over this. They still claim they don't allow those items but when you report it to them they shrug it off. I've written them off completely now. All of these aliexpress, etc dropshippers are ruining all of the retail sites.
- stuartc842 7y agoexample of an item that smells like aliexpress to me: 2'x4' painting for $160, ships from china, comes in 6 different sizes https://www.etsy.com/listing/637298037/original-sea-waves-oil-paintings-on https://www.etsy.com/listing/637298037/original-sea-waves-oi...
- QuinnyPig 7y ago"We've decided to help ourselves to 15% of sales. If you don't like it, get the hell off of our platform." Are there any platforms / marketplaces that don't treat their vendors like garbage?
- kyle_v 7y agoshameless plug but my marketplace farmsbeforepharmacies.com takes 0% but that's because it's in the hemp industry and we cant take payments yet ;-)
- faintrain 7y agoAnd? I shed no tears for those affected by this policy change. This is what happens when you build your business on top of someone else’s platform. We have seen it with Amazon, Facebook, Twitter, Shopify, EBay and other platforms/aggregators/rent seekers. This is life within a capitalist society for small business owners and consumers when you do not have collective bargaining or true competition in the marketplace. It’s a fact of life within tech and it’s been a fact of life in other industries as well at one point or another. (ie. cable tv, toys, big box retail, oil, gas, steel, phone, cat food, etc, etc)
- whatshisface 7y agoThis comment sounds similar to, "I shed no tears for people involved in car wrecks, which are a known risk of driving." Yes everyone knows that it's dangerous for your vendors to be bigger than you, but it's still bad when we're reminded.
- faintrain 7y agoEquating car wrecks to companies making policy changes to increase their bottom line makes no sense here. Your argument is effectively everything is OK as long as you’re not told. The bottom line is that small business and consumers have a responsibility as well.
- tomnipotent 7y agoNo, it's more akin to "I shed no tears for people that built their business on the back of the Facebook Platform or Pinterest".
- IAmEveryone 7y agoI see you rely on electricity, internet, Windows (booh!), 435 different NPM modules (counting transitivity), and the continuing existence of humanity. You should really try to reduce dependencies. Have a look into passive computing and selling to higher animals, maybe?
- faintrain 7y ago
- epa 7y agoIts win win for store fronts.. prices will just go up to compensate.
- reaperducer 7y agoIt's not a win for the stores if they sell less because they had to increase prices. For some reason you assume that the stores don't already know their customers and haven't already maximized their prices.
- epa 7y agoClearly they were getting free advertising subsidy, so maybe they don't fully know their costs.
- JMTQp8lwXL 7y agoDoes 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's best selling point. 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.
- mreome 7y agoSounds like an opportunity for some of the larger sellers to band together to create larger combined storefronts. Or for someone to open something like a selective/curated version of Etsy for larger sellers and small business.
- josephjrobison 7y agoWell 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. 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. Can only point to some desperate times? Seems to be a sure way to alienate your most successful sellers.
- nordsieck 7y ago> 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. I assume the logistical reason they're doing it is because they need ad volume for negotiations. That doesn't make it "right" or even good corporate strategy (although I suppose it might be), but I can see why they'd do such a thing.
- mreome 7y agoI can't image they're going to negotiate on a per-seller basis though. They're going to negotiate as Etsy, and simply rotate their advertisements through items sold by their sellers. The only realistic reason to force the largest sellers into the program is that those are the sellers already moving a lot of volume, thus they must present the most popular goods which would lead to the greatest profits for Etsy.
- blueboo 7y agoIndeed. If the ads were effective and appealing, sellers would trip over themselves to sign up. If they're not, the only way to enroll would be this approach. Their strategy doesn't preclude the possibility of the former, but it sure signals the latter.
- josephjrobison 7y agoExactly - they’re showing that Etsy is getting the upper hand here in an ad fee arbitrage play.
- tomnipotent 7y agoEtsy is buying advertising on other sites, to the benefit of their customers. In the event that traffic converts, they take another 12/15% on top of the existing 3-4%. This sounds like business the stores wouldn't be getting otherwise (so it's incremental), and all at the cost of what you'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.
- Hnrobert42 7y agoThe title seems fairly accurate, if not poetic, to me.
- eropple 7y ago> This sounds like business the stores wouldn't be getting otherwise (so it's incremental) Have you ever run a business where the margins don't even reach fifteen percent? Because that is a lot of small businesses. More sales at unsustainable margins are not better than fewer sales. Software people forgetting that COGS exists is common enough in the VC space but most of the world has an acute understanding of the costs of their supply chain. "Suddenly, we decide when your margin drops by twelve percent and there is no recourse except to fuck off" is bad.
- tomnipotent 7y ago> Have you ever run a business where the margins don't even reach fifteen percent? I'm willing to wager the average margin for an Etsy seller is much better than that, but it makes for a dramatic example to try and prove a point. > More sales at unsustainable margins are not better than fewer sales. That's not how margins work. Scenario 1 - No Participation - Orders: 1,000 - AOV: $30 - Gross Sales: $30,000 - Cost: $15,000 COGs - GM $: $15,000 - GM %: 50% Scenario 2 - Participation - Orders: 1,000 + 100 Outside Ad Orders - AOV: $30 - Gross Sales: $33,000 - Cost: $16,500 COGs + $450 = $16,950 - GM $: $16,050 - GM % 48.6% This is before you factor in other costs, or your time.
- stordoff 7y ago
- deleted 7y ago[deleted]
- chx 7y agoHuh! > 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. 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. Let'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's... not a lot.
- sithlord 7y agoI would hazard a guess that 90%+ etsy sellers are hobbiest getting nowhere close to 10k/year
- 100-xyz 7y agoI think Etsy is advertising itself and passing the buck to the sellers on its platform. The ad will mention the seller's products but also say Etsy. So free advertisement for Etsy. Very underhanded!
- jacknews 7y agoExactly, these product-spotlight ads are always designed to pull people into the site, not just sell individual products. Quite cheeky, considering Etsy itself is really made by it's sellers - what is it otherwise, than just an e-commerce enabler like shopify etc.
- MicahKV 7y agoI'm one of those sellers who is being forced into Etsy's new ad program. It is frustrating and obnoxious, but I can't say it is surprising given the policy changes they've been rolling out the past few months. 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's relationship with sellers inevitably turns adversarial. 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 "business" 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.
- benignslime 7y agoHave you compared the price to say, hosting your own website, finding your own marketing platform, finding a payment provider, and managing logistical challenges, all for 12% of the gross income of your product? I can see why people would be frustrated, but you're getting a whole lot for using their service.
- MicahKV 7y agoI do host my own website and manage all of those things, but it's not a question of the cost it's the fact that I can't opt out. It impairs my ability to predict & control my expenses, and it forces me to subsidize Etsy's ad campaigns that compete directly with my own website.
- massysett 7y agoYou can opt out: don’t sell on Etsy.
- Glyptodon 7y agoThe sad thing is that many successful Etsy sellers do have their own websites and also sell through other platforms besides Etsy. So they have the costs you mention + Etsy costs.
- reaperducer 7y ago"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." It sounds like the sort of thing a 1930's Chicago gangster would think up. It'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'd better not be light this month. We know how much you sell.
- stordoff 7y ago> 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 That's not exactly what I think when I read "biggest sellers". That seems like a remarkably low cutoff. Also, if you don't need/want to grow and/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'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. [1] "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" https://www.etsy.com/uk/legal/fees/ https://www.etsy.com/uk/legal/fees/ [2] s.11 https://www.etsy.com/uk/legal/terms-of-use#etsydisputes https://www.etsy.com/uk/legal/terms-of-use#etsydisputes [3] Up to $100/order - "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." https://www.etsy.com/uk/legal/fees/ https://www.etsy.com/uk/legal/fees/
- masonic 7y agoIt's reminiscent of what StubHub did last year when, just a few weeks before baseball season began, they increased their commission on MLB tickets by 50%. Yes, fifty percent.
- skinnymuch 7y agoInteresting. Wonder if that was during eBay or new ownership.
- masonic 7y agoEbay.
- skinnymuch 7y agoDoes any one know roughly what percentile of active and/or previously active sellers have done $10K in lifetime sales? By active I’m not including people who sold 0-2 things ever as that seems fair to cut off.
- dang 7y agoWe changed the URL from https://www.etsy.com/seller-handbook/article/introducing-etsys-risk-free-advertising/729663416588 https://www.etsy.com/seller-handbook/article/introducing-ets... to a third-party article, which hopefully provides a clearer picture than a press release.
- mreome 7y agoThanks. I actually came across the issue in a (different) third-party article, but I submitted the Etsy link based on "If a post reports on something found on another site, submit the latter." from the Hacker News Guidelines. I agree the third-party articles provide more context; I was just trying to stick to the Guidelines. =)
- farhanpatel 7y agoIt seems like they're trying to replicate the Wish advertising strategy. Show you ads with relevant products on Instagram/Facebook that all link to different products on Etsy. They probably need more sellers in order to fill the ads with relevant enough products.
- coding123 7y agoLooking 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'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. My numbers are fake but you get the gist.
- neya 7y agoI know this sounds crazy, but for E-Commerce, you never go with all these third party "platforms" as your sole business strategy. 1. First of all, you can't differentiate much in terms of offering and most of the time, you're put in a position of having to compete by price if there are similar offerings in the same platform. 2. Believe it or not, it'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. 3. Because you're pushed into a red ocean, you barely get to build your brand and curate your own email list. 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. I'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't afford to pay a lot, use the rest of the money to advertise on Facebook/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't need to worry about devOps. You'd be surprised, how effective this strategy is over the long term, than having to sell your data to all these platforms which you'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 "Shopify Analytics" (https://help.shopify.com/en/manual/reports-and-analytics/shopify-reports https://help.shopify.com/en/manual/reports-and-analytics/sho...). Install Google Analytics and Tag Manager, read some tutorials and setup event tracking. Feel free to ping me if you need help. You'll then start to see how much valuable data you've been giving away to these leeches for free (sometimes even paying a fee to them to steal your data). 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.
- vbs_redlof 7y agoCurious, what do you think of Sellfy? It gives you email lists, and analytics. I'm currently building an e-commerce platform like Etsy, and tossing up some ideas of what kind of features to provide for sellers with respect to their brand, email list, and analytics, paywalled content etc.
- bitxbit 7y agoEtsy 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?
- joking 7y agobecause some people goes directly to etsy and if you are not there you are losing a sales. However, what etsy is doing, is what booking has done to the hospitality sector, it reinvests many of the money it gets from selling your products in getting more people and more sales done, to the point that they are working almost as your digital marketing agency. Probably you would be better investing the dollars that you pay to the marketplace in your own online ads campaign, but if you are small maybe it's not worth the work. Also, once someone has made his first purchase on the platform (call it etsy, airbnb, amazon, booking, whatever). It's easier to make a second purchase than register in another new site.
- rs23296008n1 7y agoI 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. 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'll get charged for the ad on next purchase. Nice little earner for Google and Etsy but useless to me. Opt out? Sure, but I'm sure there'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'll replace Etsy with a simple investment of 5 - 8 hours. For those curious, I sometimes make wooden furniture as a hobby. These are one-offs. Sometimes on commission/custom order but otherwise I usually sell one piece a week. So no, I don't use google ads etc. I'm not a mass-produce kind of operation and my customers know it. Its part of the appeal.