Etsy’s new advertising policies aren’t sitting well with sellers

By Matt Collins Article may include affiliate links

Etsy users are lashing out at the website’s new advertising rules that will add significant fees on select sales.

The issues revolve around the site’s advertising tools it offers sellers.

Etsy is removing the ability to advertise with Google Shopping through its own Etsy Ads service, instead shifting the service’s focus to paid listings on Etsy’s site.

Meanwhile, in what Etsy is billing as a “risk free” option for sellers, the company will offer what it’s calling Offsite Ads.

Under this service, Etsy will advertise sellers’ products on Google, Bing, Pinterest, Instagram and Facebook.

Sellers won’t pay upfront, but if a user clicks an ad for a sellers’ product and buys within 30 days, Etsy will pass along that cost in the form of an “advertising fee.”

While this may, especially with how Etsy is spinning the move, sound look a good idea, digging into the details shows why sellers aren’t happy.

Under the old system, sellers could set budgets for their ad campaigns, but now all sales acquired via Offsite Ads will be subject to a 15% advertising fee up to $100 per order — including repeat orders from the same ad in the 30 day period.

Etsy is also making the new program mandatory for any seller who sells more than $10,000 in a 12 month cycle and once a store reaches this threshold they can’t opt out, even if their sales dip below $10,000. Etsy does cut the fee down to 12% in those cases.

In addition, Etsy is automatically enrolling everyone into the new Offsite Ads program.

Sellers who do less than $10,000 in business in 12 months can opt out but it does require action on their part.

These fees also don’t account for the 5% shipping and transaction fees the platform takes plus the 3 to 4% Etsy Payments fee sellers are charged, which Etsy requires sellers based in certain countries, including the U.S., to use for all payments on the site.

Sellers are also charged small listing fees, but, depending on price points and margins, these can quickly eat into profits.

Not counting these listing costs, sellers could lose almost 25% of their sale price to sales acquired via Offsite Ads.

New and established Etsy sellers alike are blasting the new scheme as “predatory” — among other terms.

Many are threatening to close up their Etsy shops and move to standalone ecommerce platforms that could become beneficial to services such as Shopify, BigCommerce, Squarespace and Square.