Online retailer Etsy announced Thursday that it would start taking more money from shop's sales and offer owners new tiered subscription plans.
The seller transaction fee will increase from 3.5 percent to 5 percent starting July 16. The new 5 percent fee will also apply to shipping costs, which were not subject to Etsy fees before.
In conjunction with the fee announcement, Etsy introduced three "seller packages." But more on that in a minute.
The company said the changes "will enable Etsy to make further investments in marketing to attract buyers, enhance customer support, and drive product innovation."
Immediate feedback from shop owners shows they aren't happy about the changes.
Etsy artisans react to fee increase
Alison Brynn Ross, a South Carolina-based wire taxidermist who was among the top 10 craft sellers on USA TODAY's 2016 Best Gift Guide, said she will begin looking for new platforms outside of Etsy to sell her products because of the fee changes.
Ross is a full-time artist who launched her shop in 2015, but she said she only started focusing on business growth within the past year.
She started using Etsy to expose her work to "an existing audience," she told All the Moms via a social media message. But she now feels she can do business without Etsy — and the increased fees.
"It's not an adjustment that I'm comfortable with for the amount of sales that I get monthly," she wrote.
Consider this example of the new Etsy fee:
Pretend Ross sells an item for $150 that ships for $25. Under the old fee system, Ross said she'd be charged $0.20 to list the item and $5.25 for the transaction fee (3.5 percent of $150). In other words, it would cost her $5.45 total to sell that item on Etsy.
Under the new rules, the listing price remains $0.20, but the increased fee of 5 percent would now apply to $175 (because the $25 shipping cost is now added), which would be $8.75 ($8.95 total).
That ends up being a 64 percent increase.
Why the charge on shipping?
For Stephanie Rose, California-based Etsy shop owner of "Inspired by Stephanie R" and mother of three, her issue isn't so much with the fee increase as it is with the fee now applying to shipping costs.
The sales bump "isn’t really that big of a deal," she said.
"The fact that they are then charging 5 percent of shipping? It just seems ridiculous for lack of a better word. (Shipping) is not money coming into our pocket."
To minimize the impact, she thinks sellers will consider increasing their prices.
“That’s where the difficulty arises. To offset ... you’ll have to increase the cost of your item and just potentially do free shipping,” she said, adding that no one ever wants to raise their prices, especially when they feel they're already set fairly.
'Etsy doesn't owe me anything'
Arizona-based Etsy shop owner, Tatiana Rapier, of "Love J&T," a hand-lettering design store, is taking a wait-and-see approach to the changes.
"Obviously, I’m not super thrilled about them charging me more money and the possibility of me having to raise my own prices to make up for the difference," she wrote to All the Moms. "But ... I understand that as businesses grow, sometimes pricing and business models need to change."
Rapier said she felt like many Etsy shop owners complain when new changes arise, but added:
"I don’t feel like Etsy owes me anything. I choose to use their services because it works for my business, and if it ever stops making financial sense for me to use them I could always change seller platforms. Additionally, our revised fee structure will enable us to make meaningful investments in key areas while remaining the best overall value for creative entrepreneurs.”
She said she can't expect the company to advertise and direct traffic to her shop for free.
What's the deal with the seller subscriptions?
These changes are optional for sellers.
The new packages start with the standard plan, which includes the tools and services currently available. This will continue to be free to all shop owners.
The next level plan, called Etsy Plus, costs $10 a month (at least for now) and includes more promotion and customization options.
Etsy did not disclose the price for the premium-level plan, which will be available in 2019. That will come with management tools for businesses with employees and more customer support from the sites.
In a statement sent to All the Moms Thursday, an Etsy spokesperson said:
“Etsy is only successful when our sellers are successful, and we are constantly listening to how we can better help them reach their goals. Sellers have been vocal about their desire for us to bring them more buyers and tools to run their businesses effectively. Our new subscription packages will better guide sellers through various stages of business growth.
Are small Etsy shops impacted more?
"With these fees in combination with the subscription service, it feels like they are pushing out the smaller upstarts," Ross wrote. "I do think that it's doing more harm to smaller businesses."
And as for the subscription services?
Ross says she'll be interested to hear from friends who try it, but currently, she has no interest.
Rose echoed Ross' sentiments, saying the benefits listed in the services, like promoted listings, are not something she's used in the past and doesn't "feel the need to" currently or in the future.
Some sellers hope that Etsy will have their back
Adriana McElvain, owner of "Knots & Tiny Thoughts," a handmade baby-goods and home-decor store, said she thinks the impacts will vary depending on the shop.
"I think changes can be good and bad," she wrote to All the Moms, adding that she could see how the fees might impact smaller businesses like hers the most.
"Many Etsy sellers I know are moms trying to make an extra income," she said.
"Most of the time, smaller sellers don't have as many resources," she added. "My shop, Knots & Tiny Thoughts, is small and just starting off, but Etsy has always been good to me."
She said she's open to pay more if it means a better outcome and is "excited to see what the new packages are all about."
Looking to new platforms outside of Etsy
Ross said for now she'll keep her shop open and fulfill incoming orders while she browses for new platform options.
"With so many options for people looking to share their handmade goods with the world, I'll be interested to see what people will do in response to the changes," she wrote.
Rose said she plans to focus more on her Shopify site. And while she doesn't want to leave Etsy because she still generates income there, she's now open to exploring other platforms.
"I was dragging my feet into exploring other options because I like Etsy, but this change is making me want to do so."
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