- Well, hello there.
And haven't we been here before?
Yes, we have, in 2018, little flashback,
Etsy increased the transaction fees from 3.5% to 5%.
And they just announced that these fees
are gonna go up again on the 11th of April 2022
from 5% to 6.5%.
So let's just discuss.
As you can see,
this is a bit of a different setup
that I usually have for my videos,
because I wanted to get this to you as quickly as possible.
I hope it's okay.
And what I really wanna do with this video
is first talk about what happened in 2018.
Why did the fees go up?
Why did Etsy say we're gonna put the fees up to do X, Y, Z,
and did they actually do X, Y, Z?
So we'll do a little review,
then we'll talk about why they're saying
they're increasing their fees right now.
And my honest thoughts about what I think about this.
And finally, I wanna leave you with three questions
to help you decide whether or not it is time to leave Etsy.
Let's dive in.
(instrumental music)
Bonjour, my name is Deb,
and I'm the Founder of Tizzit.Co,
a membership community for makers and handmade shop owners,
just like your fabulous self.
You can learn more about our community,
Tizzit HQ by link below this video.
But for now, let's just straight into today's conversation.
The latest Etsy fees increase.
So what's changed since the last fee increase?
Well, in 2018, when the fees went up from 3.5 to 5%,
they told us that the reason they were doing it
were first to increase the marketing budget
by at least 40% to get more traffic invoice to Etsy.
So did they accomplish that?
The answer is definitely yes.
Back then, their revenue was what now is marketing budget.
That's how intense the growth has been
over those last four years.
To give you an idea in 2017,
they had spent 109 millions in marketing by the end of 2018.
So after that fee increase, they had spent 158 millions.
After that,
it just kept increasing and increasing year after year,
you can see those in the press release section
on their website.
If you go to the investor report for every financial year,
you'll see that after that in 2019,
I've got the numbers here.
So that's why I'm looking like I'm reading
'cause I am, (chuckles)
2019, marketing was 215 million, 2020, 500 million.
So that's a jump of like,
they doubled the budget essentially
because the revenue went up as well.
This is the whole pandemic time.
And then last year, 2021,
654 millions was invested in marketing.
So that's a green tick here for that first reason.
They said they were gonna spend more on marketing
to bring more buyers to the platform, and they have,
and at this time of the recording,
Etsy's more than 80 million,
I think maybe even 90 million active buyers on their website
every month, which is not ridiculous.
The second thing that they had said
was that they were gonna create a new look
for Teams and forums inside of the Etsy website.
They did that too.
Is it something that we all desperately needed and wanted?
Maybe not.
Is it still important that they did it so that the community
could support each other better
and keep supporting each other?
I do think so that this is something
that does separate Etsy from other platforms.
The fact that they do tap into the community of Etsy sellers
and coaches and people supporting each other through Teams.
So I see the importance of that.
Now, did everyone sales exploded and boomed
and became all crazy because they changed the look
of the Teams and forum section on their website?
Probably not, let's be honest.
The next point was,
provide fun support 24/7 and live chat
and create a new help centre.
Okay, there's been some changes inside of the help centre.
And if you find it, you can contact Etsy on the phone,
but typically, the help centre is,
will direct you based on the problem that you're having
to the most efficient way to contact them,
which often will be in written form
and not a 24/7 phone call that you can have
with someone on the Etsy support team.
That's personally what I wanted
and what I thought they were gonna do
that didn't really happen.
At the moment,
even the help centre will say that they are available 24/7,
but that the wait time is one to two days,
which that doesn't really make sense.
And that's like a weird way of going around English language
to try and say,
we actually reply usually in 48 hours, not 24/7.
So that's the first thing.
And then beyond that,
actually it has been much slower than that.
I know many, many people I work with
that have had issues they really needed to fix
that was impacting their business,
and no answer for Etsy for 10 days
and then an answer that's not necessarily helpful,
that kind of sounds like it's a copy pasted,
can response that they've barely read your question.
So there is definitely, definitely, definitely a lot
that can be done on the support front to help sellers.
And I think that in the last four years,
because that was in 2018, not enough has been done.
So I'm gonna give Etsy a red cross on that one.
The last thing that they said they would do
with this last fee increase was providing new ways
to share insight into Etsy's bios trends
and tips and advice to optimise for reach.
Now, when I read that four years ago,
I was really hoping for better shop analytics.
That's what I wanted, that's I think what everyone wanted,
they did release towards the end of 2018, sorry,
the better version of the search analytics
in your shop marketing section at the back end of your shop.
This is a great tool that I really like,
but it is still in better.
And we're four years after the launch
and it's still lacking data.
It's definitely not a tool that you can rely on only,
as in, you need other tools than that
to be able to really assess your SEO
and your search strategy.
So we're not really
where we thought we would be four years ago with that.
So I'm gonna go with a little red cross again for that one.
So keeping that in mind,
why are the fees increasing this time in 2022?
Now I'm not gonna read to you the entire thing.
I do have it in front of me,
so I can redo you some bits and pieces
that I found interesting.
I'll link to it below this video as well
so you can read the whole thing yourself if you want to.
But typically, what we have is an announcement
or a statement from Josh Silverman
who's the CEO of Etsy explaining why these fees
are going to go up this year.
The first thing that I like to point out out
is that he says,
"Together, we've made Etsy the global marketplace
for unique and creative goods."
I'd like to point out and we'll talk about this
a little more further along in this video,
that there is no mention of the word handmade in there.
The global marketplace for unique and creative goods,
unique and creative is very, very broad way
of describing a product.
Anyway, I'll put that aside for now,
we'll come back to it later.
The three key areas that they wanna make improvements in,
and that's essentially how they're justifying
this year's fee increase is one,
bringing more buyers to Etsy.
As I was saying before,
they spend more than 600 million last year in marketing,
they wanna do more.
They're not really giving us a number like they had in 2018.
We don't know what that means.
We don't know how much more they're hoping
to invest this year or the following years.
And they're talking about commercials, podcast, billboards,
influences, email marketing,
all of that to bring new buyers to Etsy.
My thoughts on that is,
that's not surprising is that that's their job, (chuckles)
Literally, they have to bring more buyers to the platform.
They to grow their audience
if they want to grow their sales,
which is a way to support you as well,
by bringing more buyers to the platform.
So I would expect that if your fees go up,
we're gonna get more buyers or what is the point, right?
So that seems pretty normal to me, nothing crazy there.
The second point is support.
Now, again, remember what we said in 2018,
they had said that we were gonna have this live call,
whatever, a 24/7 thing that we never saw,
they still are realising four years later
that this is still a key area of improvement
that the seller is asking for from feedback.
They must hear so many of you guys going,
this is crazy how bad the support is,
that they know it's bad,
they still haven't fixed it in four years though.
So I am excited about that.
And at the same time,
I don't wanna put the horse before the cart,
because they've said that four years ago,
and there hasn't been that much of an improvement,
or maybe there has been,
but because there's been more tickets
and more support requests,
the improvement hasn't been enough
to catch up with the increasing demand
of support that you guys have.
So I'm glad that it's there,
that they know it's important and they wanna prioritise it.
I'm just not gonna get excited before I see actual results.
They're saying that they're gonna grow the support team
by more than 20% this year, awesome.
That they want quick, easy, faster email responses,
expanded access to live chat,
and prioritisation of your most urgent request.
Again, all sounds good,
but let's see if it actually comes to life this time.
The third point,
and that's a very interesting one is keeping Etsy unique.
Now, this is about making sure that the platform stays,
what they say is a safe and secure destination
for handmade, vintage, and special items.
Now, this time we are hearing the word handmade
and we are hearing the word vintage,
which is a little bit of a relief compared to unique
and creative goods as I was saying before.
With that said,
we also have special items in there,
and God knows what that means.
That could mean absolutely whatever they wanted to mean.
So typically, what this means is we have terms of services.
We have roles,
there's products that we want on our platforms,
others that we don't.
And we know that we're not doing a really good job
and keeping the one that we don't outside of our platform.
So they're saying that they wanna expand the efforts
to remove listing that don't meet their policies
and resolve issues with buyers.
I think that is so important,
not just because Etsy is turning into a platform
that is not what it was initially.
And that hurts a lot of you guys
who are selling genuinely handmade products
and competing with people
who are absolutely not making handmade products,
but I think it's also hurting their brand, honestly,
and that the less they care about this,
the more their brand image is going to turn into,
Etsy becomes eBay, which is not what they want,
now, what they want might not be what you want though,
and there is a big difference
between completely 100 genuinely handmade,
and the definition that Etsy has about handmade, vintage,
special items, unique and creative goods.
So it doesn't mean that everything is going to go back
like what it was in 2005 when they first launched.
But if they are really making an effort in this area,
I'd be personally really happy about that.
So, I understand that fees increasing
is extremely frustrating because it affects directly
how you're generating income.
And for some of you, how you're making a living,
yet, it does feel that you do not have control over it
because the truth is, you do not have control over it.
But if you want my opinion,
it's the same opinion that it was four years ago
when they increased, sorry, the fees from 3.5 to 5%,
the price increase is neither a surprise
nor the last time this is going to be happening on Etsy
or anywhere else online.
The fees will go up again in the future.
I can warranty that.
So I don't know how long,
is it gonna be another four years, two years?
I don't know, but it will definitely go up again.
So it doesn't surprise me.
And this is not the last time this is going to be happening.
Etsy is not the business that it was back
almost 20 years ago when they first opened,
I think was 2005, and when they got started.
We're talking about a business that's making billions,
that's hiring thousands of employees,
that's got 90 millions active buyers
on the platform each month.
They grew this business by making more investments
and they will continue to do so.
So this fee increase is really just a reality of it
and what it looks like
for them to keep doing those investment
and to keep growing the platform.
Now they are definitely a jump that's for sure,
but it's still a lot cheaper.
It was the case in 2018, still is now,
it's still a cheaper than most other platforms
that you could be selling on.
And even though there is a lot to say
about how they could improve their support to you guys,
the sellers, they still also do a lot more
than other platforms like eBay or Amazon
to educate and to support their sellers.
My personal opinion,
and please feel free to disagree with me,
but respectfully in the comments fellow,
is that when you're in business, you have to be flexible.
Things like that are going to happen again and again,
and again and again on Etsy and outside of Etsy.
You just get used to it.
And honestly, the sellers
that are going to be the least affected by these changes
in the terms of service of Etsy.
And in this case, in the fees increase,
are the ones that are gonna spend five seconds
thinking about how annoying this is,
'cause you know you've gotta give yourself that,
but then they're gonna move straight away onto,
okay, how am I going to deal with this
and start thinking like a business owner?
What does it mean for me?
What are my choices and my options?
And how do I adapt to this new situation?
So I honestly think we need to reframe this conversation
and to decide for yourself
whether you should leave the platform or not.
I'm going to encourage you to ask yourself three questions.
The first one is, well, I first tell you what it's not,
it's not about answering,
can I afford the extra fees?
That's not the question, it's about wondering,
am I happy to be on a platform
that makes those types of decision for me?
Am I happy to roll with the changes as they show up
and to commit to this long term?
That's a very important question to ask yourself,
because you're all gonna have a different opinion on that.
If you want to stay on the Etsy platform,
this is going to mean adjusting to those changes
when they arise, because there'll be more changes.
I can promise you that.
If you want to get some more freedom,
then it's time to focus more on your website
or start one if you don't have one,
but you've been thinking about it.
But if you weren't about to shut down your shop
like before this announcement was made,
I don't think that this announcement on its own
should be what pushes you to do so,
and to actually go, I'm gonna leave Etsy.
On the other end,
if you've been thinking about it for a long time,
because there's all the reasons for you
that this agreement that you have with Etsy
doesn't quite work.
And this was just like the little extra push
that you needed to get out, then maybe for you,
yes, it is time to get out.
But I don't think that this fee increase
should be the one reason why.
The other question, number two,
that I think it's important to ask yourself is,
am I happy with what the platform stands for
and where it is going?
Do you want to be on a platform
that sells exclusively handmade product?
And what is your definition of handmade?
Because again, we will all have different definitions.
So what is yours?
And are you happy with what Etsy is doing
in that regard or not?
Would you prefer to be on a platform
that sell only exclusively handmade product?
Because if so,
that's simply not Etsy anymore, (chuckles)
and it's neither like a good or bad thing,
it's just a neutral fact.
It is just not what it sees anymore.
We can spend all the time we want,
reminiscing about the good old days of Etsy.
It's not going to change this reality,
even with more investments to shut down shops and listings
that don't comply with their terms,
which they said they were gonna do with this fee increase
in the investment that they will be able to make in that,
you'll still have items on that platform
that are not 100% handmade.
If we can, again, even agree on what handmade really means.
So again, this is not what it was in 2005.
The definition of handmade is broad.
They actually are living the door wide open.
As I mentioned earlier in this video,
when they're saying the global marketplace for unique
and creative goods, very broad,
and the destination for handmade, vintage,
and special items, special items, unique, creative goals,
that's really open to interpretation.
And so you have to be okay with that
if you wanna keep moving forward with Etsy.
Finally, question three to ask yourself is,
is my business on Etsy or am I an Etsy business?
You do not want to be an Etsy business.
Etsy is a platform you use inside your business
to make sales.
So it's a sales or revenue channel.
It is not your business.
You're not an Etsy business or an Etsy shop.
You're an e-commerce business
that happens to sell its products on Etsy.
I know this is a very subtle language difference,
but it's a massive shift
in how you approach your business decisions.
The moment you think it of yourself as an Etsy seller,
rather than as a business owner selling on Etsy,
you attach a little bit of your identity to the platform.
You're essentially saying I am an Etsy seller
like I could say, I am a woman.
It's very different from saying, I sell on Etsy.
I am an Etsy seller,
identity crisis when this thing happened,
I sell on Etsy, it's much more detached,
much more independent, and you have much more control.
And I think this is a very important mindset shift
that you have to make
because when you consider yourself an Etsy seller
and you wrap up your identity as a business
inside of this platform, rather than detaching yourself
by saying something more like I sell on Etsy,
it hurts more when things change and it's always gonna hurt
because Etsy is always gonna change.
And it's really feel like Etsy should always get it
or owes you something,
and I'm sorry if this is a bit of a brutal reality check,
but they do not, they do not owe us anything.
They owe their investors some money back on the investment,
and this is going to be their north star forever
when they make decisions.
So most of those decisions that they're gonna make,
you may be okay with, then that's fine.
You keep your agreement with them
and you keep selling under their new terms.
Some decisions though that they're gonna make,
and this might be one of those for you.
You might find do not turn out to be a win-win anymore
and not beneficial enough for your business anymore.
Then you get to break out of that agreement
that you have with them to leave the platform.
So whatever you do,
make sure that you don't put all of your eggs in one basket
and also, and very, very importantly, stop, if you are,
stop thinking of yourself as an Etsy seller
like detach yourself from the platform,
your business is its own entity.
You're not an Etsy seller,
you're so much more than that.
Etsy might be a platform that you sell on.
It's okay if it has to stop
because it's not a win-win anymore.
And it's also important
that you start diversifying your sources of revenue
and off traffic so that if this fee increase
is not what's breaking the deal for you,
the next one is, you are ready to move onto another platform
or to let go of Etsy.
(speaks foreign language), my friend,
that abouts wrap up my thoughts on this topic.
So I'll talk to you in my next video.
And until then, (speaks foreign language)