Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Etsy sellers are furious over new mandatory ad fees

mashable.com

Post reply on HN
Print view View original

81–90 of 181 posts

Re: Etsy sellers are furious over new mandatory ad fees

#81

Post by hoorayimhelping »

wjossey wrote: post #10

On the one hand, this would be great if it was all opt-in. On the other hand, this is nutty for any business running on low margins or with limited supply (and a sufficient customer base that they don’t need advertising to sell out). A lot of small business owners aren’t great at marketing, and having a push button solution is great. Forcing your larger sellers into something that might not even need is borderline pr…

I left Etsy as a member of the relatively new ads team in mid 2015. We generated a lot of revenue for the company in a very short period of time, but we made sure to make the whole thing feel like Etsy - homegrown, ethical, thoughtful, etc.

We made the tools mentioned in this article - the ads console and search ads. It was basically first party promoted listings where you could bid on keywords in the internal site search. We also let sellers opt into ad campaigns run through google and facebook that we helped manage through a console. It was all optional, and it was a decent equalizer for smaller shops, although it was mostly used by large shops iirc.

I have no idea what the hell they're thinking with this. This is downright hostile to sellers. I spoke to a nonzero amount of sellers who were against advertising as a concept - they didn't want to be part of that machine (I think quite a few of us here can relate). Now they have no choice but to pay Etsy for this. It's a huge middle finger to the sellers and that made Etsy rich and who Etsy continually takes advantage of. This is mafia-esque style extortion where they say they're doing this for you as they take your money.

Re: Etsy sellers are furious over new mandatory ad fees

#82

Post by stordoff »

tomnipotent wrote: post #73
stordoff wrote: post #63

Earlier quoted context omitted.

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 wha…

It's unlikely the Etsy ads will be targeting stores names, but generic terms they can match to their market place in real time. It's far more likely in this scenario, there will be little confusion between the generic text ad and the first organic link that clearly has the seller's name in it.

I don't see why they _couldn't_ - they specifically say "All of your listings or shops may be promoted".

Even if they don't, it still falls into a similar trap. A few weeks prior (when I was still looking for cheaper alternatives), I mentioned off-hand that I've found one option, and it's on Etsy. Did she Google "[generic term] + Etsy" (I only found one seller, so it's tantamount to searching the seller's name)? I've no idea, but if she did, they're probably taking 12%.

Re: Etsy sellers are furious over new mandatory ad fees

#83

Post by tomnipotent »

mreome wrote: post #25
IAmEveryone wrote: post #20

Earlier quoted context omitted.

Etsy shops don't strike me as low-margin. Unless it has drastically changed since I last used it? At least back then, it was for "self-made" and/or creative works. Such products are typically under less competitive pressure because there's no competition for "Aunt Jill's Organic Cotton Socks". I used to deal in high-end organic foodstuffs, and we sold nothing below 50% margin. "Sure, you can by other olive oil for 1/…

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?

> who is already selling at the rate they can produce goods?

This is a pretty good question. If you sell handcrafted hard maple tables that go for $5k, it only takes two orders and you're suddenly coerced into a program.

However, if that program leads to one sale more it only cost $500 - that's a pretty good ROI. The problem will be if Etsy is transparent and can demonstrate the incremental value of this service, and that it's just not cannibalizing existing sales.

Re: Etsy sellers are furious over new mandatory ad fees

#84

Post by chipotle_coyote »

faintrain wrote: post #50
IAmEveryone wrote: post #26

Earlier quoted context omitted.

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?

The same people complaining fail to advocate for change. You don’t like Etsy policies go elsewhere. This is not rocket science. You don’t like the fact that big companies abuse consumers, small businesses, and their employees, you can vote or collectively organize for change. The HN community rails against unionization and collective bargaining often but loves to complain when a policy change like this occurs. Make i…

While you're not wrong on a meta level, complaining about policy changes like this sometimes balloons into massive PR hits, which can in turn lead to reversals. So it's not entirely true that complaining is doing nothing.

> You don't like Etsy policies go elsewhere.

But "if you don't like [company X's] policies go elsewhere" isn't always viable from a business standpoint, right? I don't know how close Etsy gets to monopoly in their niches, but there's probably a measurable advantage to being there -- customers who, when they're thinking of buying some (theoretically) handmade arts and crafts-ish knickknack, go straight to Etsy and browse specific categories and keywords.

Re: Etsy sellers are furious over new mandatory ad fees

#85

Post by tomnipotent »

mandelbrotwurst wrote: post #46
IAmEveryone wrote: post #27

Earlier quoted context omitted.

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

Says who? It's possible that the sellers have goals other than profit maximization. Maybe they're happier simply providing as much supply as they are able at a price that feels fair.

The market?

Every other marketplace charges 10-15% - Etsy has been a bargain for years. Even eBay will cost a seller more than Etsy, and no one's complaining about that.

Re: Etsy sellers are furious over new mandatory ad fees

#86

Post by tomnipotent »

stordoff wrote: post #76
tomnipotent wrote: post #61

Earlier quoted context omitted.

> 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: $1…

That's one scenario. I can very easily gin up some numbers where it doesn't make sense: - Organic Orders: 500 - AOV: 20 - Gross: 10000 - Margin: 15% - Net: 1500 A nice little side business. Nothing amazing, but a little extra income. - Extra Orders: 100 - Gross: 12000 - Net: 1560 ([Orders * AOV * Margin] + [Extra * AOV * (Margin - Esty Ad Cut)]) Hang on - why am I doing 20% extra work for 60 quid? If Etsy takes some…

> I'm doing 20% more work, and making _less_ money.

That's not how it works. Overall you're making less per hour, but making more overall money. Maybe you were at $20/hr, and now you're at $19.50. This is not a bad trade-off, as otherwise you wouldn't have made that money but you still would have had those hours of productivity available.

Where do these exaggerated 10-15% gross margin numbers come from? These stores do not exist, or do not exist long. And I can't imagine any product at 10-15% that isn't being sold everywhere else because it's mass-produced.

How much of every seller's business comes from free Etsy traffic? Should Etsy charge more for orders they can validate came from them, which the seller otherwise wouldn't see?

Re: Etsy sellers are furious over new mandatory ad fees

#87

Post by tomnipotent »

stordoff wrote: post #82
tomnipotent wrote: post #73

Earlier quoted context omitted.

It's unlikely the Etsy ads will be targeting stores names, but generic terms they can match to their market place in real time. It's far more likely in this scenario, there will be little confusion between the generic text ad and the first organic link that clearly has the seller's name in it.

I don't see why they _couldn't_ - they specifically say "All of your listings or shops may be promoted". Even if they don't, it still falls into a similar trap. A few weeks prior (when I was still looking for cheaper alternatives), I mentioned off-hand that I've found one option, and it's on Etsy. Did she Google "[generic term] + Etsy" (I only found one seller, so it's tantamount to searching the seller's name)? I've…

> I don't see why they _couldn't_

It's not easy to automate, or to build a model that demonstrates that targeting this low-level will have a positive ROI. Advertising is a fickle game, and I don't see this being successful without building it on a broad program that allocates spend by some segmentation of their sales (e.g. product category).

Re: Etsy sellers are furious over new mandatory ad fees

#88

Post by Glyptodon »

benignslime wrote: post #53
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…

Have you compared the price to say, hosting your own website, finding your own marketing platform, finding a payment provider, and managing logistical challenges, all for 12% of the gross income of your product? I can see why people would be frustrated, but you're getting a whole lot for using their service.

The sad thing is that many successful Etsy sellers do have their own websites and also sell through other platforms besides Etsy. So they have the costs you mention + Etsy costs.

Re: Etsy sellers are furious over new mandatory ad fees

#89

Post by jacknews »

100-xyz wrote: post #41

I think Etsy is advertising itself and passing the buck to the sellers on its platform. The ad will mention the seller's products but also say Etsy. So free advertisement for Etsy. Very underhanded!

Exactly, these product-spotlight ads are always designed to pull people into the site, not just sell individual products.

Quite cheeky, considering Etsy itself is really made by it's sellers - what is it otherwise, than just an e-commerce enabler like shopify etc.

Re: Etsy sellers are furious over new mandatory ad fees

#90

Post by Lucadg »

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.

Maybe decentralized marketplaces could offer a solution in the long term. This one surely is a serious attempt: https://www.originprotocol.com/

We are working with them to build an Airbnb alternative but all sorts of marketplaces can be built.

Post reply on HN