Josh Silverman: Please stop Etsy fees to enable small businesses to thrive not struggle

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On the 14th June 2018 the sellers of Etsy received an email explaining that new changes are going to be put into place. To make Etsy the best place to run a creative business, sellers are being told that Etsy have listened to what sellers want and new tools will be available to build their business.

Nothing comes for free though does it?

The transaction fee you pay when you make a sale is increasing from 3.5% to 5%.

Perhaps 5% doesn't sound much to many people, but take into consideration this marketplace is a place for handmade goods, one-man bands not for factories churning out thousands of items a day. Take into account the time taken to make each handmade item will be hours ... days or weeks. On top of this consider the materials which are a lot more expensive to buy for small businesses because they don't need to purchase bulk materials at wholesale price and of course the initial monthly listing fee for every item. 

Sellers are told that in exchange for this new fee, Etsy are planning on building new tools for sellers. The email explaining this reads: Now, we’re planning to invest even more in bringing buyers to Etsy, building seller tools, and improving your seller experience. To help make this happen, we’re updating our fees, and we’re adding some new features. 

So this means the fee will allow all sellers to have access to these new tools right?... Wrong. Do some more research and sellers will actually have to join a monthly subscription to gain access to these on top of the new fees. Sellers still have the option of using the old tools, but they will still be paying the new fees rates.

Etsy email: Get access to advanced tools with two new packages
We’re introducing optional monthly packages that give you access to a suite of new tools designed for shops at different stages of growth. You can still access all the tools you know and love without paying for a monthly subscription and you can switch at any time.

This will not help the small and start up businesses who are unable to afford to pay the new package prices, the cheapest of the two will be an additional £15.10 a month as of January 2019 (The premium price is yet to be revealed!) 

It doesn't stop there I am afraid. Where else can Etsy gain from their sellers? Etsy have revealed they will be applying the 5% fee to sellers shipping costs too. 

Etsy says "It’s common in ecommerce to apply the transaction fees to shipping costs. It promotes fairness and transparency in the marketplace by removing the incentive for a seller to "hide" part of their pricing with a low price and high shipping costs."

Tarnishing everyone with this brush is unfair, many sellers pay the brunt of shipping costs themselves, so for everyone to pay the consequences of unfair high shipping costs is unjust. Perhaps a cap should have been applied to shipping costs instead, as the only people here gaining from this fee is Etsy.

So the sellers using high shipping costs will raise their prices further, consequently the people losing out are the sellers who don't overcharge and keep their fair shipping costs and the customers of Etsy who will be paying for the heightened shipping prices.

The hardworking Etsy community ask these fees could be reconsidered, or if nothing else lose the inequitable 5% fee of the shipping costs. 

When a company increased its 2018 forecast, raising revenue to as much as $543 million, It's hard to understand why they would be asking the small businesses they claim to care about to pay for their new changes.

Not everyone is angry though, As The Wall Street Journal have reported:  'Etsy Raises Fees, Angering Sellers but Sending Stock Soaring'

... Cha-ching.