Etsy Raising Transaction Fees from 3.5% to 5% Starting July 16
Etsy announced today that effective July 16, Etsy’s transaction fee will increase from 3.5% to 5% and it will also apply to the cost of shipping. All other fees, including listing fees, will remain the same.
The company is also introducing new optional feature plans designed around the needs of sellers as they grow their business.
- Standard Plan – Everything sellers need to start, manage, and grow a creative business. No monthly fee.
- Plus Plan – An expanded set of tools to help jump-start growth and express a seller’s brand. $10 per month introductory rate that will jump to $20 per month in January 2019.
- Premium Plan – Full set of advanced tools that lets sellers run their business like a boss. Pricing to be announced in 2019.
Let’s look at the new plans in more detail.
Standard Plan
- Access to 34 million shoppers around the world.
- All the seller tools and services you use to run your business today.
- Powerful paid advertising options.
- Optional add-ons like Etsy’s website-building tool, Pattern.
Plus Plan
- All features from Standard Plan
- Advanced shop customization – Stand out from the crowd with new customizable options for your banner and featured listing area on your shop home.
- Restock requests – Let shoppers who visit sold out listings sign up to be notified when the item is back in stock.
- Custom packaging and promotional materials – Get discounts from our partners, just for Etsy Plus and Etsy Premium subscribers.
- Custom web address – Save on a custom URL that redirects to your Etsy shop and gives your business cards a personal touch.
- Listing credits – Credits sellers can use to list or renew items. 15 per month ($3 Dollar Value).
- Promotional Listing Credit – Credit sellers can apply for advertising on Promoted Listings ($5 Dollar Value).
Premium Plan
- All features from Plus Plan.
- Advanced management tools – Take control with tools built for business owners with employees.
- Premium support – Get a faster response when you need help from our support team.
Etsy did not state the pricing or Dollar values for the Listing Credit and Promotional Listing Credit on the Premium Plan. The Premium Plan will become available in 2019, so some details are still being worked out.
FAQ From Etsy
Why is Etsy raising fees?
We’re updating our transaction fee to help us invest more in bringing buyers to Etsy, building tools that make it easier for sellers like you to run your shop, and providing the support you need to grow. As always, our goal is to make Etsy the best place for running a creative business online, and we think these changes will make Etsy even better.
Will I lose access to any Etsy’s tools when the new packages are available?
No, you won’t lose access to any free or paid features. You can still use tools like Promoted Listings and Pattern as you always have.
Do I have to do anything?
No, Etsy Plus and Etsy Premium are completely optional. If you choose not to subscribe to a plan when they become available, you’ll continue to have access to all the tools and services you use today.
Sellers can ask more questions in the dedicated forum topic on its website for this announcement: etsy.me/june-update-forums-qa
Big Change for Etsy
Etsy is making some changes that are similar to how other marketplaces operate. Certainly charging a transaction fee on the shipping cost is designed to encourage sellers to offer more items with free shipping.
It also avoids the problem that sellers will inflate shipping costs and reduce product costs as was often the case years back on eBay.
There will also be some sellers that see this as the eBayification of Etsy. One could argue there is a bit of truth to that, but the marketplace had been a bit stagnant until last year and since the management change has made a lot of improvements.
Over the last 12 months, the company launched a lot of useful features for sellers and on its Buyer Marketplace Tests page it continues to test and expand new features.
The marketplace has also attracted millions of new buyers and sellers expanding the community and opportunity for sellers.
In a nutshell, the changes have been good for the marketplace, and unlike others who are moving toward a product catalog, Etsy is staying true to its unique product mix.
READ MORE: A Look Inside The Q1 2018 Earnings Call by Etsy
Etsy also stated that for 2018, it is expanding its digital advertising expenditures by over 40 percent versus 2017. Again, this will benefit sellers as the marketplace gaines greater visibility to the general public.
Overall, the costs associated with selling on Etsy are still well below Amazon and eBay, giving Etsy a significant selling cost advantage.
It does seem inevitable that many new features will end up in one of the paid tiers, but the company is trying to offset the monthly plan costs by providing real value to sellers.
We would love to hear your thoughts on Etsy’s changes. Head over to our Facebook Discussion Group or use the comments section below.
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Richard Meldner
Richard is co-founder of eSeller365. He has over 17 years of experience on eBay which includes tens of thousands of sales to buyers in over 100 countries and even has experience with eBay’s VeRO program enforcing intellectual property rights for a former employer. And for about two years Richard sold products on Amazon using Amazon FBA in the US.
To “relax” from the daily business grind, for a few weekends a year, he also works for IMSA as a professional race official.
Big Mistake. One of the reasons I have sold more is because I try to keep shipping low through several means while trying to not lose money on shipping (packaging). That will be impossible now, Etsy already charges a seller fee, a transaction fee, and a listing fee… and they start adding up.
A second gripe I have about this is that it is unfair to up fees on item already listed. Many Etsy sellers have hundreds of item listed and listed them at an agreed upon transaction fee. At the very list this raise should only occur on newly listed items.
Fee increases are always going to end up impacting existing listings. That is pretty much standard operating procedure for all marketplaces. I get that adding the fee to shipping costs is unfair for sellers as yourself that actually try to keep shipping costs down. I do remember the years when eBay didn’t have that same policy Etsy is introducing now and sellers just listed $10 items for $7, but then instead of $5 for shipping, they would charge $8 for shipping. It was rampant at times. I was an eBay seller like yourself with reasonable shipping costs, but eventually I was forced to make changes to my product prices and increase shipping costs to play the game other sellers were playing to compete. I was a bit shocked how “ignorant” some buyers were of the fact they paid the same final price but shopped by lowest product price only. Playing the game at the time almost doubled my sales, go figure… Of course, once eBay realized this was not a good policy to keep up and also started to charge on shipping cost, the practice stopped as it made no longer that much sense. Especially when eBay gave “free Shipping” listings a boost in search results.
It is not a complete apples to apples comparison, but still very close. Having been down that road myself, I fully understand why Etsy is charging their transaction fee on shipping fees. In my personal opinion, in the long run, it is the better solution to keep shipping and product pricing “honest.”
No change in the fee structure will work for every seller or will be fair to everyone. It’s impossible. The best a seller can do is evaluate changes in listing practices, changes in the listed product mix, or in some extreme situations, consider using a different marketplace or eCommerce platform.
Thank you for your comment,
Richard
I sell vintage and antique housewares on Etsy. I would love if someone from Etsy could “share” convincing, concrete, specific “details” about how they “plan to better support sellers” like me as “we” grow.
My urgent concerns, point by point, are below:
1) RE: “The 3.5% transaction fee you pay when you make a sale is increasing to 5% and it will now apply to the cost of shipping.”
I can FULLY understand why Etsy needs to increase commissions on listing prices, but this 5% charge on shipping is an unmistakable red flag, and could lead to the closure of my small Etsy Shop, which I opened last year, and have been working hard to build out. This underhanded charge does NOT “promote transparency” on any level, and, in fact, penalizes independent shops like mine for packaging carefully, shipping internationally, and generally striving to offer high level customer service.
The main issue for me, and many vintage & OOC sellers like me, is that my OOC antique items are often unusual dimensions, as well as being heavy and fragile, so ACTUAL shipping costs are high, in some cases equal to my listing prices. Please know that MANY of us are offended and outraged by the condescending language in this recent announcement re: “transparency” and Etsy’s apparent attempt to pass off a significant hidden fee as a necessary seller “policing” method.
The high commission charges that Etsy Sellers will now be charged on international packages is another serious point of concern. I have made sales to Canadian and Australian Buyers, so far, and get a good percentage of international traffic to my shop. I don’t believe it would be EFFECTIVE, or, for that matter, FAIR to my shop’s foreign customers, to raise my prices enough to make up for the changes Etsy has just made. To be clear, the 10% plus increase needed to maintain my margins, given my unusually high shipping costs, would most likely result in paralyzing price resistance, and low to no sales. Will the new seller tools Etsy is promising drive buyers to my shop who are prepared to pay that much more for my items???
2) RE: “We’re introducing optional monthly packages that give you access to a suite of new tools designed for shops at different stages of growth. The tools you use today will continue to be available at no additional cost and you can switch packages at any time.”
Many of us are struggling to understand how being “invited” to SPEND $10-$20 (ETSY) PLUS per month EXTRA, basically for “discounted” ADVERTISING & PROMO packages and credits, which will most likely be NEEDED to stay COMPETITIVE, constitutes “seller support”? Is this actually what you at ETSY are trying to pass off as an “expanded set of tools to help jump-start growth and express your brand.”??? Aren’t you just insisting that we spend more with you on ADS in order to increase traffic to our shops? Also, btw, if you would bother to ask around, you’ll probably find that sponsored PROMOS & ADS do VERY LITTLE to “express” or enhance the image of most independent “creative” brands.
As for the option to “tell shoppers your items are back in stock” (“Don’t lose a sale!”) Umm, Hello!?!? I sell ONE OF A KIND items!!! ONE-OF-A-KIND, as in, it is not possible for me to restock items.
As for “free banner tools” HELLO!?! IS Etsy Management aware that most of us already have access to Photoshop and a wide range of FREE and extremely user friendly Apps for generating banners? Do you really think of Etsy Sellers as gullible and inept? A simple tutorial on how to make a banner would be enough for most of us. And guess what, they’re out there on YouTube for FREE! While on the topic, RE: promised “discounts” on collateral and promo material – DITTO! WHY does ETSY Management assume that their very creative Sellers are not capable of effectively sourcing and making their OWN collateral and packaging material. YIKES! Also, btw, many of us get our boxes for free via the recycling cycle, because we care about the environment and about keeping our prices competitive.
As for “Send customers to your own web address. Save 50% on a custom .com address or get a .store address for free for a year — it’ll add polish to business cards and make it easier for customers to find your Etsy shop.” Hello!?!? I don’t want to manage my own website. now and probably never. That’s the REASON I joined ETSY 😉 And PLEASE! And, again, WHAT IS UP with all this patronizing “corporate-speak”?!?!
Please, ETSY, find a way to show us that you TRULY have “been working hard to help ensure that Etsy’s the best platform for running your creative business,” because right now it DEFINITELY does NOT feel like that is the case!!!
Etsy, please show your Sellers, who make your business, whether tiny, like me, or fully scaled UP, that you ARE listening!!!
Thank you for your comment. You ask an interesting question I will see if we can get an answer on from Etsy. Will the final value fee apply to international shipping charges. I believe on eBay they don’t, they only apply to domestic shipping charges. There is also another issue that Etsy probably will need to address for Australian buyers which I have not seen them discuss. Starting July 1, shipments to Australia must include GST tax collection by marketplaces. Amazon decided to no longer allow Australian consumers to purchase from them except on amazon.com.au. eBay decided to collect the GST tax and show prices to Australian buyers with the GST included in search results.
As far as the price hike, there is a bit of blame that has to go to previous management. I can only assume current management decided now that they fixed some long-time operational and platform neglect, they needed to do some “rightsizing” on the fees. Especially if they are spending 40 percent more on marketing trying to attract more buyers. I agree it’s a big hit on a single increase, but let’s see if they will follow through and are able to bring more buyers to the platform. Some of the early numbers they mentioned in their quarterly earnings reports to investors seem to suggest that is happening.
Richard
Yes I was enjoying the lower fees compared to other sites even though they are hard to find quickly in your account. I hope this doesn’t ruin the platform when everyone has to reactively raise their prices. I use an app to help me figure out my sales and expenses (payment processing fees, etc). Luckily I’ve been already tracking my fees before Jul 16, 2018 so I’ll have to see where I’m at pretty soon compared to the new ones.