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Etsy sellers band together to ‘strike’ against company’s fee hike

By MixDex Article may include affiliate links

Thousands of sellers on handmade marketplace Etsy have temporarily shuttered their stores on the platform to protest the company’s previously announced higher fee structure.

The new fee structure, which effectively results in a 30% hike, took effect April 11, 2022, the same day many of the stores closed their virtual doors and most of the sellers say they’ll keep their stores closed for a week.

By shutting down their stores, the sellers are hoping to send Etsy a clear message: You need the revenue our stores generate, even at a lower rate.

The movement, dubbed the Etsy Strike, is a collective effort coordinated by merchants but isn’t what is normally considered a “strike” in terms of labor law — mainly because, as independent merchants (not to mention non-union), the sellers aren’t entitled to strike in the way unionize employees of a company would.

In that sense, the move is more of a reverse boycott of sorts.

Etsy had been taking 5% of sales made on its platform but that jumped to 6.5% on April 11. The site also charges a 3% plus 25 cent payment processing fee on top of the transaction fee and that practice will continue at the same rates. Sellers also pay a 20 cent listing fee per item that’s good for four months or until the item sells out.

That brings the total amount a sale is reduced by due to fees to about 9.5%, not including the listing and base transaction processing fee, which would be an additional 45 cents per listing (though the per item cost decreases slightly for merchants who use the same listing to sell multiple quantities of the same item).

Etsy has been defending the increase since it was announced, saying that it plans to reinvest a “considerable portion” of funds generated by the rate hike in marketing, customer service and developing new features and services.

It did not designate how much will go toward those initiatives and how much the company will simply pocket.

“After giving Etsy two years of record profits under the most difficult circumstances imaginable, we’re tired, frustrated and ready to fight for our seat at the table,” the organizers of the strike wrote in an open letter sent to CEO Josh Silverman.

In a previous statement, Etsy emphasized that one of its goals is to increase lifetime value of customers for its sellers and it hopes that will help offset the price increase.

Etsy already provides customer support for certain issues not handled by the seller directly but it’s likely it’s seen hikes in labor costs for the team that handles those.

While the announcement triggered some seller complaints, threats to move to another platform or outright defections, Etsy also has the advantage of being able to deliver significant traffic to its sellers given its role as a global marketplace. Its basic fee structures are also more of a “pay as you go” model, which generally ties costs to sales.

Many merchants, however, see the increases as encroaching on their margins and profits. Many of the sellers on Etsy are small, independent businesses with relatively low volume, though there are some merchants who have made millions off goods they sell.