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Etsy sellers are furious over new mandatory ad fees

mashable.com

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Re: Etsy sellers are furious over new mandatory ad fees

#61

Post by tomnipotent »

eropple wrote: post #36
tomnipotent wrote: post #21

Etsy is buying advertising on other sites, to the benefit of their customers. In the event that traffic converts, they take another 12/15% on top of the existing 3-4%. This sounds like business the stores wouldn't be getting otherwise (so it's incremental), and all at the cost of what you'd be to an affiliate network anyway. Forced participation if you do more than $10,000 is ridiculous, but I otherwise fail to see w…

> This sounds like business the stores wouldn't be getting otherwise (so it's incremental) Have you ever run a business where the margins don't even reach fifteen percent? Because that is a lot of small businesses. More sales at unsustainable margins are not better than fewer sales. Software people forgetting that COGS exists is common enough in the VC space but most of the world has an acute understanding of the cos…

> Have you ever run a business where the margins don't even reach fifteen percent?

I'm willing to wager the average margin for an Etsy seller is much better than that, but it makes for a dramatic example to try and prove a point.

> More sales at unsustainable margins are not better than fewer sales.

That's not how margins work.

Scenario 1 - No Participation

- Orders: 1,000

- AOV: $30

- Gross Sales: $30,000

- Cost: $15,000 COGs

- GM $: $15,000

- GM %: 50%

Scenario 2 - Participation

- Orders: 1,000 + 100 Outside Ad Orders

- AOV: $30

- Gross Sales: $33,000

- Cost: $16,500 COGs + $450 = $16,950

- GM $: $16,050

- GM % 48.6%

This is before you factor in other costs, or your time.

Re: Etsy sellers are furious over new mandatory ad fees

#62

Post by i_am_nomad »

tomnipotent wrote: post #24
mreome wrote: post #2

The users who can't opt out are subject to a 12% fee, but this is on top of the the existing 3%-4% transaction and payment processing fees.

Only on orders where the traffic is from this advertising service. Dishonest to make it sound like all orders are being dinged.

But how much current, organic traffic would this be hijacking?

Re: Etsy sellers are furious over new mandatory ad fees

#63

Post by stordoff »

tomnipotent wrote: post #24
mreome wrote: post #2

The users who can't opt out are subject to a 12% fee, but this is on top of the the existing 3%-4% transaction and payment processing fees.

Only on orders where the traffic is from this advertising service. Dishonest to make it sound like all orders are being dinged.

On any sales within 30 days of an ad click. Genuine scenario from a few months ago: I'm looking at some shelving on Etsy, I mention it to my mother (using a specific seller's name) to double check it's right for what we need. She clicks the first Google result (which in this scenario could very easily be an Esty ad), and now Etsy are taking £12 extra from a £100 order without the seller being able to opt-out. For what? They haven't driven any traffic.

Re: Etsy sellers are furious over new mandatory ad fees

#64

Post by mc3 »

IAmEveryone wrote: post #26
faintrain wrote: post #13

[flagged]

I see you rely on electricity, internet, Windows (booh!), 435 different NPM modules (counting transitivity), and the continuing existence of humanity. You should really try to reduce dependencies. Have a look into passive computing and selling to higher animals, maybe?

It's about risk assessment. No electricity / no internet means you have bigger problems. 435 npm modules is risky - so that needs to be managed but that's not necessarily meaning ditch NPM.

And for Etsy - well the usual play with these sorts of things is you use them for marketing then get the customer after they make a purchase to start using your real shop running on your own domain.

Re: Etsy sellers are furious over new mandatory ad fees

#65

Post by farhanpatel »

It seems like they're trying to replicate the Wish advertising strategy.

Show you ads with relevant products on Instagram/Facebook that all link to different products on Etsy. They probably need more sellers in order to fill the ads with relevant enough products.

Re: Etsy sellers are furious over new mandatory ad fees

#66

Post by _jal »

IAmEveryone wrote: post #27
mreome wrote: post #25

Earlier quoted context omitted.

Margins aside, anyone selling hand-made goods has a very limited stock and can't really scale up production. What is the value of this advertising to a seller who is already selling at the rate they can produce goods?

The value in that case might be the teaching moment when they realise they should have raised prices a long, long time ago.

Individual maker-types are all over the map, in every way. Making blanket MBAish statements about what's good for them is (a) a fool's errand[1], and (b) rather arrogant in assuming you even know what's good for them.

And even if price optimization is what's good for what ails everyone and we just didn't know we all need to pay 12% more, the result of this lesson underwrites Etsy while complicating everyone else's life. Um, thanks?

[1] Just one of many points one can make here - a large number of crafty folks are very much not profit-maximizers. I know this is true for me (I don't sell on Etsy) - running my hobby like a business would be stupid, because not only will my day job will always pay better, but more importantly, chasing fashions, accounting and caring about competition would suck all the fun out of it.

Re: Etsy sellers are furious over new mandatory ad fees

#67

Post by MicahKV »

faintrain wrote: post #56
MicahKV wrote: post #43

I'm one of those sellers who is being forced into Etsy's new ad program. It is frustrating and obnoxious, but I can't say it is surprising given the policy changes they've been rolling out the past few months. It seems to me that online marketplaces like Etsy find their early success by bringing buyers and sellers together and just letting them do their thing, but as the marketplace becomes more established it's rela…

What are your options? 1. Build your own. 2. Collectively organize with other Etsy shop owners to advocate with Etsy leadership. These type of policy changes aren’t a surprise anymore, no? We’ve seen them from Apple, Facebook, Shopify, Twitter, Amazon, EBay, etc for more than a decade now.

They are not a surprise, no. I have wondered before what marketplace sellers could do in the way or organizing/unionizing.

Re: Etsy sellers are furious over new mandatory ad fees

#68

Post by tomnipotent »

whatshisface wrote: post #19
faintrain wrote: post #13

[flagged]

This comment sounds similar to, "I shed no tears for people involved in car wrecks, which are a known risk of driving." Yes everyone knows that it's dangerous for your vendors to be bigger than you, but it's still bad when we're reminded.

No, it's more akin to "I shed no tears for people that built their business on the back of the Facebook Platform or Pinterest".

Re: Etsy sellers are furious over new mandatory ad fees

#69

Post by masonic »

stordoff wrote: post #49

> If you’ve made more than 10,000 USD (approximately 7,800 GBP) in sales on Etsy in a 12-month period [...] you’ll be required to participate for the lifetime of your shop That's not exactly what I think when I read "biggest sellers". That seems like a remarkably low cutoff. Also, if you don't need/want to grow and/or you have low margins, this could wipe you out. 12% revenue of _any_ orders within a 30 day period of…

It's reminiscent of what StubHub did last year when, just a few weeks before baseball season began, they increased their commission on MLB tickets by 50%.

Yes, fifty percent.

Re: Etsy sellers are furious over new mandatory ad fees

#70

Post by mreome »

dang wrote: post #60

We changed the URL from https://www.etsy.com/seller-handbook/article/introducing-ets... to a third-party article, which hopefully provides a clearer picture than a corporate press release.

Thanks. I actually came across the issue in a (different) third-party article, but I submitted the Etsy link based on "If a post reports on something found on another site, submit the latter." from the Hacker News Guidelines. I agree the third-party articles provide more context; I was just trying to stick to the Guidelines. =)
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