Etsy sellers are furious over new mandatory ad fees(mashable.com)
mashable.com
Etsy sellers are furious over new mandatory ad fees
https://mashable.com/article/etsy-offsite-ads-program-sellers-backlash/
180 comments
Does any one know roughly what percentile of active and/or previously active sellers have done $10K in lifetime sales? By active I’m not including people who sold 0-2 things ever as that seems fair to cut off.
I’ll bet they’ll also be targeting very specific “Jane Doe’s Etsy store” style keywords where the top organic result was already the right one and there’s no competition for clicks.
Pay a few pennies, make 12% of the sale.
Pay a few pennies, make 12% of the sale.
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.
Yes, fifty percent.
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 predatory.
When I clicked through to read their announcement I assumed they’d address some of these concerns, but nope. So, if I run a low margin shop and make 10% on each sale, I’m now underwater by being Etsy.
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 predatory.
When I clicked through to read their announcement I assumed they’d address some of these concerns, but nope. So, if I run a low margin shop and make 10% on each sale, I’m now underwater by being Etsy.
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.
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.
Especially given that Etsy is supposed to be primarily for hand-made goods. Their top sellers are very likely already selling items at the speed they can make them, why would someone want Etsy to take a cut of their sales for advertising when they can't actually sell more?
That was the original model but that doesn’t really scale. It’s primarily another channel for mass manufactured stuff that your can find on aliexpress.
Is there a competitor that still is mostly handmade?
I got into it with their support over this. They still claim they don't allow those items but when you report it to them they shrug it off.
I've written them off completely now. All of these aliexpress, etc dropshippers are ruining all of the retail sites.
I've written them off completely now. All of these aliexpress, etc dropshippers are ruining all of the retail sites.
example of an item that smells like aliexpress to me:
2'x4' painting for $160, ships from china, comes in 6 different sizes
https://www.etsy.com/listing/637298037/original-sea-waves-oi...
2'x4' painting for $160, ships from china, comes in 6 different sizes
https://www.etsy.com/listing/637298037/original-sea-waves-oi...
I'd put that right in the middle of the 'hotel art' category. They should also advertise it as being stain resistant.
supposed to be but probably isn't https://www.dailydot.com/irl/etsy-reselling/
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 1/10th of our price. But you can't buy this olive oil"
I used to deal in high-end organic foodstuffs, and we sold nothing below 50% margin. "Sure, you can by other olive oil for 1/10th of our price. But you can't buy this olive oil"
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.
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.
> if that program leads to one sale more it only cost $500 - that's a pretty good ROI
Not if you don’t have time to make another table...
Not if you don’t have time to make another table...
Then reduce available inventory. No one is forcing you to sell things you don't want. This is a fake argument.
I think it’s an argument you don’t understand. Also, just because you sell tables for $5k doesn’t mean you would want to “buy” another sale for $500.
Just because the margin of sale price over COGS is high doesn’t mean that — after factoring in the cost of labor — it’s a high-margin endeavor.
Edit: typo fixed
Just because the margin of sale price over COGS is high doesn’t mean that — after factoring in the cost of labor — it’s a high-margin endeavor.
Edit: typo fixed
> I think it’s an argument you don’t understand
I've sold hundreds of millions of merchandise over the last decade. Think I understand just fine, thanks.
> doesn’t mean you would want to “buy” another sale for $500.
Of course you do, this is why it's called business. No one is on Etsy because they don't want to make money, and most people I know have excess labour and are willing to trade that for money.
> after factoring in the cost of labor
This isn't how cash flow works. You cannot get fixated on the margin of a single order, but on the blended margin across all orders.
I've sold hundreds of millions of merchandise over the last decade. Think I understand just fine, thanks.
> doesn’t mean you would want to “buy” another sale for $500.
Of course you do, this is why it's called business. No one is on Etsy because they don't want to make money, and most people I know have excess labour and are willing to trade that for money.
> after factoring in the cost of labor
This isn't how cash flow works. You cannot get fixated on the margin of a single order, but on the blended margin across all orders.
The fact that you’ve sold things doesn’t mean you understand my argument. You’re sure good at convincing yourself though — good day!
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The value in that case might be the teaching moment when they realise they should have raised prices a long, long time ago.
Spoken like somebody who has no idea how that particular market works.
Let's take handmade jewelry for an example, because I happen to know that somewhat. Unless you want to do luxury goods, you're talking mostly beading & wire wrapping. There's a very clear ceiling on the price by mass-manufactured goods from mostly Mexico.
People still want to buy handmade in the US, because they can talk to the seller, because they can influence the design somewhat, because it has a feelgood factor. That gives you room to charge a small premium. That premium, however, is limited. Demand for jewelry is fairly price sensitive, especially given that there's a fallback good that's almost as nice at a lower price.
And so there is both an upper limit to the price you can charge, and an upper limit to what you can produce. (You could manufacture, but it's fairly easy to tell, and so you lose the "handcrafted" clientele)
Yes, in a rational market, you'd fold up and move to higher margins. We know for a while now that markets aren't rational. And the craft market especially is deeply suffused with all kinds of emotions. So, no, that's not going to happen either, because people like making stuff with their hands, and this particular market allows them to finance that.
Maybe save the glib advice next time and ask some questions first?
Let's take handmade jewelry for an example, because I happen to know that somewhat. Unless you want to do luxury goods, you're talking mostly beading & wire wrapping. There's a very clear ceiling on the price by mass-manufactured goods from mostly Mexico.
People still want to buy handmade in the US, because they can talk to the seller, because they can influence the design somewhat, because it has a feelgood factor. That gives you room to charge a small premium. That premium, however, is limited. Demand for jewelry is fairly price sensitive, especially given that there's a fallback good that's almost as nice at a lower price.
And so there is both an upper limit to the price you can charge, and an upper limit to what you can produce. (You could manufacture, but it's fairly easy to tell, and so you lose the "handcrafted" clientele)
Yes, in a rational market, you'd fold up and move to higher margins. We know for a while now that markets aren't rational. And the craft market especially is deeply suffused with all kinds of emotions. So, no, that's not going to happen either, because people like making stuff with their hands, and this particular market allows them to finance that.
Maybe save the glib advice next time and ask some questions first?
None of this is true if you have the skills to chase whatever trend is ruling the market.
For eg custom keycaps - what should they cost? i've seen anything from 60USD for brass moulded ones to 200USD for resin ones with miniature landscapes in them(that sell out literally within 1 minute of listing)
For eg custom keycaps - what should they cost? i've seen anything from 60USD for brass moulded ones to 200USD for resin ones with miniature landscapes in them(that sell out literally within 1 minute of listing)
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.
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.
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.
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.
To what end? They're still at capacity, Etsy take a bigger cut, and they might not be particularly interested in making more money. Some sellers (I suspect especially on a marketplace like Etsy) might be happier making a product _everyone_ can afford to buy.
Well it's a good strategy to nudge mass produced high-volume low-margin goods off your marketplace. And the mom-n-pop ones can always opt out.
The system has no opt-out if you've ever gone above $10K in rolling 12 month sales.
How many sellers are doing more business than that though? I figure Etsy has better numbers on that than we can speculate.
My mom started selling hand-made jewelry locally, and then started an Etsy account. She started doing them for fun, and then realized she can make a little money at it.
A few years later, and I think she just barely qualified for that $10k this last year. So she went from pure hobby to being classed as one of the "biggest sellers" in just a few years.
I don't know how many people get to that point, but what she's doing isn't particularly unique. Literally anyone could do it if they have enough control of their hands and enough free time.
A few years later, and I think she just barely qualified for that $10k this last year. So she went from pure hobby to being classed as one of the "biggest sellers" in just a few years.
I don't know how many people get to that point, but what she's doing isn't particularly unique. Literally anyone could do it if they have enough control of their hands and enough free time.
I'm not sure but the point is that it's WELL within the threshold of "mom n pop".
If you make 10% on each Etsy sale, you need to find a new business. 10% works for large volume retailers or very expensive products, neither of which are really Etsy's forte. Even people selling print-on-demand tshirts have much higher margins than that.
TL;DR: The 10%-margin shop doesn't exist; they already went out of business.
TL;DR: The 10%-margin shop doesn't exist; they already went out of business.
> The 10%-margin shop doesn't exist; they already went out of business.
Exactly, just comes off as crocodile tears to me. This is a red herring and distracts from the real issue of not being able to opt-out of Outside Ads.
I'm willing to wager that not allowing opt-out is the only way they can reach a saturated-enough product catalog to make advertising profitable.
Exactly, just comes off as crocodile tears to me. This is a red herring and distracts from the real issue of not being able to opt-out of Outside Ads.
I'm willing to wager that not allowing opt-out is the only way they can reach a saturated-enough product catalog to make advertising profitable.
> If a shopper clicks on an Etsy-funded ad featuring one of your listings on Google, Facebook, Instagram, Pinterest, and Bing and makes one or more purchases from your shop within 30 days, those sales will be attributed to Etsy’s advertising and you’ll be charged an advertising fee on the total value of that order.
This kind of stuff is why tracking is so pervasive. Etsy is relying on being able to uniquely track a shopper for at least 30 days to make this work.
This kind of stuff is why tracking is so pervasive. Etsy is relying on being able to uniquely track a shopper for at least 30 days to make this work.
I used to think etsy was cute and fun, but if their tracking is that intense, and they treat their sellers like that... the warm and fuzzy feeling doesn't really stick around
> I used to think etsy was cute and fun
to the tune of ~$100M?
https://www.crunchbase.com/organization/etsy
to the tune of ~$100M?
https://www.crunchbase.com/organization/etsy
Correction since I can’t edit the post from 1-2 days ago. Etsy shot back up and closing in on $7B market cap.
Etsy’s low was in early 2018. At under a $1B market cap.
It’s isn’t aimed as a response to OP. Just my own posting numbers.
Etsy’s low was in early 2018. At under a $1B market cap.
It’s isn’t aimed as a response to OP. Just my own posting numbers.
Etsy is a $6B public company now
my point is, they were never "cute", except maybe when it was just an idea in someone's garage and had near 0 brand recognition.
Ah okay. I didn’t understand the point initially. Etsy raised high funds quickly, but until you raise many millions, I’d think you can still be considered cute. Etsy though raised $20M+ in a Series D 2.5 years after the initial seed round.
Well it seems Etsy will determine if a sale "will be attributed to Etsy’s advertising" so this tracking could be very basic and inaccurate, as long as it only generates false positive matches between a sale and an ad click-though.
In this case though, it is to Etsy's advantage if the tracking is inaccurate, and generates a high false positive rate.
I wonder what the data on incorrect tracking is (i.e. Does it lead to more false positives, or false negatives)?
I wonder what the data on incorrect tracking is (i.e. Does it lead to more false positives, or false negatives)?
I imagine it will be pretty accurate, because if the user was using adblockers/tracking protection etc. they would likely not see the ad in the first place.
I'm in the digital media space. I'd really want to know more here about how Etsy is doing their media buying here.
As an advertiser, in general you need to watch out for things like cookie bombing where a network carpet bombs a large number of people as cheaply as possible in hopes of tagging your customers who would have bought any way and inflating their performance.
The other concern is retargeting. As an advertiser, I'm incentivized to run incrementality tests on things like retargeting that tends to cannibalize attribution of conversions. This helps ensure I'm not wasting impressions on people who would have purchased anyway.
From what you posted, it sounds like Etsy may actually have an incentive to explore these tactics because they control all the data, transparency on targeting and tracking, and what products they feature.
So in a hypothetical (not saying this is happening), if they need to dial up revenue, they could filter for high priced items that sell well on their own (regardless of the margins of the seller), retarget anyone they can who visited the seller's page before, and claim credit for people who may have bought without it.
All of that said, the percentage they are taking from this alone is not much and may not actually offset the media cost in all cases to deliver a positive ROAS. But I would be surprised if they haven't already tested this and run those numbers.
As an advertiser, in general you need to watch out for things like cookie bombing where a network carpet bombs a large number of people as cheaply as possible in hopes of tagging your customers who would have bought any way and inflating their performance.
The other concern is retargeting. As an advertiser, I'm incentivized to run incrementality tests on things like retargeting that tends to cannibalize attribution of conversions. This helps ensure I'm not wasting impressions on people who would have purchased anyway.
From what you posted, it sounds like Etsy may actually have an incentive to explore these tactics because they control all the data, transparency on targeting and tracking, and what products they feature.
So in a hypothetical (not saying this is happening), if they need to dial up revenue, they could filter for high priced items that sell well on their own (regardless of the margins of the seller), retarget anyone they can who visited the seller's page before, and claim credit for people who may have bought without it.
All of that said, the percentage they are taking from this alone is not much and may not actually offset the media cost in all cases to deliver a positive ROAS. But I would be surprised if they haven't already tested this and run those numbers.
"If you’ve made more than 10,000 USD (approximately 7,800 GBP) in sales on Etsy in a 12-month period you’ll benefit most from offsite advertising. So, you’ll be required to participate for the lifetime of your shop and you’ll get a discounted advertising fee."
It sounds like the sort of thing a 1930's Chicago gangster would think up.
It's like when Mikey No Thumbs shows up once a month to pick up a fat wad of cash in a plain brown envelope. And you'd better not be light this month. We know how much you sell.
It sounds like the sort of thing a 1930's Chicago gangster would think up.
It's like when Mikey No Thumbs shows up once a month to pick up a fat wad of cash in a plain brown envelope. And you'd better not be light this month. We know how much you sell.
I've got no horse in this race, but this really seems like an egregious abuse of etsy's monopsonist position and is, like, just incredibly slimy. ("How can we raise our fees dramatically? Hmm, how about forcing everyone into paying for 'marketing,' without any connection to our cost of providing that marketing?") Or is the team at etsy so delusional as to believe customers will welcome this mandatory charge for etsy's autonomous advertising service?
[deleted]
The really bizarre thing to me is the idea of forcing it on the biggest sellers. First because those sellers are obviously doing fine without this "feature" and second because if they are making hand-made items then they may already be selling at or near their capacity.
Well the easy, non-controversial way to do this is to just introduce it as an easy and awesome new product, that stands on its own and let people opt-in at their own discretion.
By auto-enrolling everybody and requiring them to opt-out, that’s creating a huge controversy just asking for backlash. And then forcing anyone who makes over $10k to now be required - that’s a strong hand they’re playing.
Can only point to some desperate times? Seems to be a sure way to alienate your most successful sellers.
By auto-enrolling everybody and requiring them to opt-out, that’s creating a huge controversy just asking for backlash. And then forcing anyone who makes over $10k to now be required - that’s a strong hand they’re playing.
Can only point to some desperate times? Seems to be a sure way to alienate your most successful sellers.
Indeed. If the ads were effective and appealing, sellers would trip over themselves to sign up.
If they're not, the only way to enroll would be this approach.
Their strategy doesn't preclude the possibility of the former, but it sure signals the latter.
If they're not, the only way to enroll would be this approach.
Their strategy doesn't preclude the possibility of the former, but it sure signals the latter.
Exactly - they’re showing that Etsy is getting the upper hand here in an ad fee arbitrage play.
> By auto-enrolling everybody and requiring them to opt-out, that’s creating a huge controversy just asking for backlash. And then forcing anyone who makes over $10k to now be required - that’s a strong hand they’re playing.
I assume the logistical reason they're doing it is because they need ad volume for negotiations.
That doesn't make it "right" or even good corporate strategy (although I suppose it might be), but I can see why they'd do such a thing.
I assume the logistical reason they're doing it is because they need ad volume for negotiations.
That doesn't make it "right" or even good corporate strategy (although I suppose it might be), but I can see why they'd do such a thing.
I can't image they're going to negotiate on a per-seller basis though. They're going to negotiate as Etsy, and simply rotate their advertisements through items sold by their sellers. The only realistic reason to force the largest sellers into the program is that those are the sellers already moving a lot of volume, thus they must present the most popular goods which would lead to the greatest profits for Etsy.
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 relationship with sellers inevitably turns adversarial.
I feel like we need some form of regulation to limit how marketplaces like Etsy can dictate how their sellers conduct business. Amazon has a program that allows "business" customers to place an order and pay the invoice 30 days later. Since Amazon only pays out every 2 weeks, this means I can be made to wait up to 6 weeks to be paid for an order. There is no way to opt out of this and I would be penalized if I refused to ship these orders.
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 relationship with sellers inevitably turns adversarial.
I feel like we need some form of regulation to limit how marketplaces like Etsy can dictate how their sellers conduct business. Amazon has a program that allows "business" customers to place an order and pay the invoice 30 days later. Since Amazon only pays out every 2 weeks, this means I can be made to wait up to 6 weeks to be paid for an order. There is no way to opt out of this and I would be penalized if I refused to ship these orders.
becomes more established it's relationship with sellers inevitably turns adversarial.
It is not just the market places though, isn't it? Twitter used developers to grow (generous API limits) then cut them off, tumblr used erotica to grow then started restricting, google allowed certain ads at the beginning then added restrictions... and so on.
How much regulation can you put in place for such behavior? Also regulation is expensive, selective and can be rolled back when the next gov comes along.
Would be nice to have some kind of decentralized solution for this...
It is not just the market places though, isn't it? Twitter used developers to grow (generous API limits) then cut them off, tumblr used erotica to grow then started restricting, google allowed certain ads at the beginning then added restrictions... and so on.
How much regulation can you put in place for such behavior? Also regulation is expensive, selective and can be rolled back when the next gov comes along.
Would be nice to have some kind of decentralized solution for this...
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.
I can see why people would be frustrated, but you're getting a whole lot for using their service.
I do host my own website and manage all of those things, but it's not a question of the cost it's the fact that I can't opt out. It impairs my ability to predict & control my expenses, and it forces me to subsidize Etsy's ad campaigns that compete directly with my own website.
You can opt out: don’t sell on Etsy.
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.
> I feel like we need some form of regulation to limit how marketplaces like Etsy can dictate how their sellers conduct business.
I halfway agree, and halfway feel the opposite: We need to restore teeth to our existing regulatory bodies, and we need more competition. We need to reduce barriers to entry, and stop the anti-competitive behavior behemoths like Amazon have been exerting for years now.
I halfway agree, and halfway feel the opposite: We need to restore teeth to our existing regulatory bodies, and we need more competition. We need to reduce barriers to entry, and stop the anti-competitive behavior behemoths like Amazon have been exerting for years now.
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.
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.
We are working with them to build an Airbnb alternative but all sorts of marketplaces can be built.
OpenBazaar (https://openbazaar.org/) is the pioneer decentralized marketplace, it has been working for years. They recently launched their mobile app, Haven, which makes it very easy to use. From what I read they are gaining traction, and hopefully moves like Etsy's will incentivize people to explore these solutions to censorship and centralized control.
Cool, decentralized lawbreaking as a business. This is better than a centralized criminal syndicate because ????
They are not a surprise, no. I have wondered before what marketplace sellers could do in the way or organizing/unionizing.
A coordinated day where they all pause sales listings, say during an earnings call, might get attention. Especially if you get some financial reporters advance notice. Even if participation is low, some analyst is likely to ask about it in the earnings call.
> I feel like we need some form of regulation
That's crazy. Etsy is not the market, it is a market. If you don't like it, you move somewhere else.
We already have too much regulation that for some fields it's impossible to start a business without jumping through many hoops. Last thing we need is to start regulating on a per-business basis.
This is really a case of giving up your store brand/independence for convenience. Starting an online store is not hard these days, everybody should host their own if they are serious about their business.
That's crazy. Etsy is not the market, it is a market. If you don't like it, you move somewhere else.
We already have too much regulation that for some fields it's impossible to start a business without jumping through many hoops. Last thing we need is to start regulating on a per-business basis.
This is really a case of giving up your store brand/independence for convenience. Starting an online store is not hard these days, everybody should host their own if they are serious about their business.
Always had the feeling this is a consequence of business and legislative culture. The US seems to favor large near a monopolists (Amazon, Walmart, two or three network operators, Facebook) and consequently people regard those places as semi-public fixtures of the environment which one cannot do without. Whereas in Europe still markets are much more plural and its easier and thus more common to move your business. When people say Europe does not produce behemoths, I see that as markets operating better than in the US and generally being a good thing.
> When people say Europe does not produce behemoths
Volkswagon, El Corte Englais, Credit Swiss, Ubisoft ... there's at least a few in each member EU state, just like the United States
Volkswagon, El Corte Englais, Credit Swiss, Ubisoft ... there's at least a few in each member EU state, just like the United States
> We already have too much regulation that for some fields it's impossible to start a business without jumping through many hoops.
> If you don't like it, you move somewhere else
These two statements contradict each other. You're asking stakeholders to change their operating model in order to avoid Etsy having to do the same. This non-existing regulation potential impacting the practice of "starting a business" isn't a necessary argument. Stakeholders are resisting decisions that are negatively impacting their business--financial and tech firms do it all the time.
> If you don't like it, you move somewhere else
These two statements contradict each other. You're asking stakeholders to change their operating model in order to avoid Etsy having to do the same. This non-existing regulation potential impacting the practice of "starting a business" isn't a necessary argument. Stakeholders are resisting decisions that are negatively impacting their business--financial and tech firms do it all the time.
Here's an alternative to regulation: use some of the tax money gained from Etsy and other companies to subsidize the creation of a competitor. One of the known inefficiencies in the free market is how long it takes to set up a viable competitor and how expensive it is, so if the government puts its finger on the scale here, you get closer to the ideals behind the free market.
> That's crazy. Etsy is not the market, it is a market. If you don't like it, you move somewhere else.
Sufficiently big _a_ thing becomes _the_ thing because of economies of scale, network effects and "the software is eating the world" effects.
See Google, Paypal, Microsoft, Facebook, Twitter, and so on.
Sufficiently big _a_ thing becomes _the_ thing because of economies of scale, network effects and "the software is eating the world" effects.
See Google, Paypal, Microsoft, Facebook, Twitter, and so on.
All those companies are well aware that the worse they treat their companies, the more likely competitors will appear.
It happens all the time. Big, unstoppable companies become sloppy and complacent, and suddenly find themselves in free fall.
It happens all the time. Big, unstoppable companies become sloppy and complacent, and suddenly find themselves in free fall.
If by "all the time" you mean "once every couple of decades, often after antitrust intervention", then possibly.
Sears, Kodak, GE, etc.
Heck, even eBay. In the small-business-to-consumer market, it’s a shadow now compared to Amazon. Ok, at least Amazon does fulfillment so it’s not exactly comparable to ebay. But Etsy? There’s no reason eBay couldn’t be dominating that category. Didn’t take a couple of decades or antitrust intervention to destroy ebay.
These were because technology changed, not because of better competitors doing the same thinig
They did the same thing as far as the customer was concerned, only better, thereby offering a better deal to customers, who switched.
but it negates your point that lazy incumbents will get disrupted by nimbler competitors.
That mostly happens when the 'nimbler competitors' are in fact armed with a completely new technology, business model, etc.
ie, innovation is the key to change, not just decay of the old making way for more of the same, but more vigorous.
That mostly happens when the 'nimbler competitors' are in fact armed with a completely new technology, business model, etc.
ie, innovation is the key to change, not just decay of the old making way for more of the same, but more vigorous.
Then another huge company grows out of the competitors and begins doing the same thing. Just because the company on top switches out occasionally (and during the transition there is a viable option which isn't abusive), doesn't mean the system is working.
People switching to another company means it works.
Just because the abuser eventually gets replaced, doesn't mean the abuse stops (as mentioned, the replacement then settles into the same behaviour until another competitor comes along). If there's a non-abusive option 20% of the time, and 80% of the time there's only an abusive option, that doesn't strike me as 'working'. I would say the ratio would need to be 90% to 10% (i.e. any company starting to abuse its position loses it very very quickly, and the replacement does not engage in such behaviour for a while), in order for such a system to be anywhere near acceptable.
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I don't want to be condescending here, but I know it'll sound like it.
Etsy is small potatoes compared to those companies. It's the most easily avoidable of the bunch. If Etsy makes a truly stupid decision and sellers revolt, they'll be on life support before the year is over.
Etsy is small potatoes compared to those companies. It's the most easily avoidable of the bunch. If Etsy makes a truly stupid decision and sellers revolt, they'll be on life support before the year is over.
Probably could have been said better, and there's also probably no need for regulation but at least people should be fighting back.
But ultimately the suggestion to build your own is definitely the best move you can make. Etsy will always focus on their own SEO before anyone else's.
But ultimately the suggestion to build your own is definitely the best move you can make. Etsy will always focus on their own SEO before anyone else's.
> there's also probably no need for regulation but at least people should be fighting back.
They can fight back by
> But ultimately the suggestion to build your own is definitely the best move you can make.
They can fight back by
> But ultimately the suggestion to build your own is definitely the best move you can make.
> If you don't like it, you move somewhere else.
Yes, and if you don't like existing regulations you can just move to another country with different laws. No big deal, right?
I do operate my own site in addition to selling on multiple marketplaces, but even with my efforts to diversify I am dependent, in part, on the sales I get from Etsy. I would be in a lot of financial pain if I lost that revenue stream, so "just move somewhere else" is not really an option.
Sometimes regulations are necessary to keep big companies (Amazon, Ebay, Etsy) from abusing their customers (including small time sellers like myself). Regulations may not be the answer in this case, but it's at least worth discussing.
Yes, and if you don't like existing regulations you can just move to another country with different laws. No big deal, right?
I do operate my own site in addition to selling on multiple marketplaces, but even with my efforts to diversify I am dependent, in part, on the sales I get from Etsy. I would be in a lot of financial pain if I lost that revenue stream, so "just move somewhere else" is not really an option.
Sometimes regulations are necessary to keep big companies (Amazon, Ebay, Etsy) from abusing their customers (including small time sellers like myself). Regulations may not be the answer in this case, but it's at least worth discussing.
Whenever you think about creating a new “regulation”, by which I assume you mean a new law, try to think of what the phrasing for that law would be and then think about the enforcement mechanism, the implications of the law as written, and the possible, even probable complications from the enforcement mechanism.
If you come up with something that isn’t going to unfairly penalize startups and small businesses, you might even have something there, but if you find the exercise difficult, there’s a decent chance all of Congress or your State’s legislature or your country’s Parliament and all of their aides are also going to have trouble coming up with a well written law, let alone one that will survive the political process, and the most likely result is something that entrenches existing businesses, ultimately reducing your possible future choices. Actually the most likely result is a law not even passing, and if it does, getting distorted along the way into something that will likely reduce your possible future choices.
It’s not that lawmakers should never pass laws, a new law should be judicious and necessary, something that can’t be handled by the Courts from the existing body of law, and something that ought to be handled by law rather than some other civic institution. There’s a lot of ideas for laws out there that doesn’t meet any of this criteria, but we still hold onto this idea that “regulations” are magic and will almost always have their intended effects rather than almost never.
If you come up with something that isn’t going to unfairly penalize startups and small businesses, you might even have something there, but if you find the exercise difficult, there’s a decent chance all of Congress or your State’s legislature or your country’s Parliament and all of their aides are also going to have trouble coming up with a well written law, let alone one that will survive the political process, and the most likely result is something that entrenches existing businesses, ultimately reducing your possible future choices. Actually the most likely result is a law not even passing, and if it does, getting distorted along the way into something that will likely reduce your possible future choices.
It’s not that lawmakers should never pass laws, a new law should be judicious and necessary, something that can’t be handled by the Courts from the existing body of law, and something that ought to be handled by law rather than some other civic institution. There’s a lot of ideas for laws out there that doesn’t meet any of this criteria, but we still hold onto this idea that “regulations” are magic and will almost always have their intended effects rather than almost never.
All of this may be true, and yet, it’s not a very strong argument against regulation. I’m glad that we have safety regulations, despite objections such as yours, because they have demonstrably saved lives.
Lawmaking is an important part of a nation of laws, but that does not mean the body of law should have needless additions. This is why the process of selecting lawmakers is generally tied to a political process so that new laws are brokered and argued both for and against and modified.
The first test however for any new bill that would be law is, do we need this law? I think in cases where disputes are contractual or market-oriented, it is okay to rely on the resources of the State (the Courts specifically), especially if no other form of arbitration will resolve the dispute, but passing a new law should be a last resort and only after a case for it has been properly made, and a coalition around the new law formed.
The first test however for any new bill that would be law is, do we need this law? I think in cases where disputes are contractual or market-oriented, it is okay to rely on the resources of the State (the Courts specifically), especially if no other form of arbitration will resolve the dispute, but passing a new law should be a last resort and only after a case for it has been properly made, and a coalition around the new law formed.
I read their argument as against over-regulation, regulatory capture, and regulation moats like the ones Facebook is advocating for. An easier thing to imagine is if you got the regulations you wanted in place but at the end of the day they’re just preventing a thing you don’t like because it’s “new to you” and your business. Now if a startup wanted to come along and use what Etsy is doing _up front_ as part of its business mode it can’t, even if people don’t mind because they knew what they were getting.
It's not crazy. Being "a market" for a certain good is a natural monopoly -- there are economies of scale so that one market will inevitably drive out the others. I don't know if Etsy has reached that point, but it could someday.
There’s extremely limited evidence that natural monopolies even exist. The economic definition is when the efficient number of sellers in a market is one. That may be the case for airframes, see the endless subsidies for Boeing and Airbus to avoid that happening. But even a market like microchips where a fab costs tens of billions of dollars supports multiple sellers.
Etsy is an example of a two-sided market (https://en.wikipedia.org/wiki/Two-sided_market) which can be natural monopolies.
Most of the time when two sided markets gain market power through a dominant position, they still aren't a monopoly. They are an oligopoly employing game theoric positions that are worse than perfect competition but far from a natural monopoly.
For example, even with Amazon there is Target and Walmart selling online and doing much more similar delivery times these days.
The network effect of a two sided market definitely is a barrier to entry, but there is so much capital out there that other large firms or firms with access to insane amounts of capital will also build a 2 sided market and create a network effect. It's why there is Shopify, eBay, Etsy, etc. All more like an oligopoly than a monopoly.
In contrast, true natural monopolies need barriers to entry that are so high that it just doesn't make sense or isn't even possible for another company to do it even if they have insane capital. The electricity grid prior to "deregulation" and the forcing of a more competitive market was a prime example and the grid being governed/run by an independent service operator.
For example, even with Amazon there is Target and Walmart selling online and doing much more similar delivery times these days.
The network effect of a two sided market definitely is a barrier to entry, but there is so much capital out there that other large firms or firms with access to insane amounts of capital will also build a 2 sided market and create a network effect. It's why there is Shopify, eBay, Etsy, etc. All more like an oligopoly than a monopoly.
In contrast, true natural monopolies need barriers to entry that are so high that it just doesn't make sense or isn't even possible for another company to do it even if they have insane capital. The electricity grid prior to "deregulation" and the forcing of a more competitive market was a prime example and the grid being governed/run by an independent service operator.
Exactly! If the threat of competition holds prices below the profit maximizing levels for a monopolist you may have a local monopoly but it’s not a natural monopoly.
A pure monopoly is a textbook notion, like a frictionless plane. In practice, there's more or less market power, and thus more or less of a role for government intervention to correct it.
Extremely limited evidence?
How about water or electricity grids? Railroads? (City) Streets?
How about water or electricity grids? Railroads? (City) Streets?
There are examples of enduring competition of all of those bar city streets within a single city, never mind nationally. Even streets aren’t a natural monopoly. If they were you wouldn’t have patchwork metro areas divided up between different municipalities. The benefits of consolidated ownership would be so great that the Bay area would have unified like New York’s boroughs did to form the city of New York. Private towns and streets work fine. For very large examples see Davis in California or Gurgaon in India. The below quoted text is about utilities like water or electricity grids. The US does not have one freight railroad operator even now. If rail was a natural monopoly that would be unavoidable. NYC’s subway system was built by five or six companies. Local monopolies occur in lots of places but they can’t charge profit maximizing prices because of the threat of entry from other firms. The powerlessness of that threat is a necessary part of the definition of natural monopoly. If it doesn’t hold; if the threat of potential entrance of competitors holds down prices you don’t have a natural monopoly.
> The Myth of Natural Monopoly
> In his 1986 book, Direct Utility Competition: The Natural Monopoly Myth, he concludes that in those cities where there is direct competition in the electric utility industries:
> Direct rivalry between two competing firms has existed for very long periods of time — for over 80 years in some cities; The rival electric utilities compete vigorously through prices and services; Customers have gained substantial benefits from the competition, compared to cities were there are electric utility monopolies; Contrary to natural-monopoly theory, costs are actually lower where there are two firms operating; Contrary to natural-monopoly theory, there is no more excess capacity under competition than under monopoly in the electric utility industry; The theory of natural monopoly fails on every count: competition exists, price wars are not "serious," there is better consumer service and lower prices with competition, competition persists for very long periods of time, and consumers themselves prefer competition to regulated monopoly; and Any consumer satisfaction problems caused by dual power lines are considered by consumers to be less significant than the benefits from competition.
https://mises.org/library/myth-natural-monopoly
> The Myth of Natural Monopoly
> In his 1986 book, Direct Utility Competition: The Natural Monopoly Myth, he concludes that in those cities where there is direct competition in the electric utility industries:
> Direct rivalry between two competing firms has existed for very long periods of time — for over 80 years in some cities; The rival electric utilities compete vigorously through prices and services; Customers have gained substantial benefits from the competition, compared to cities were there are electric utility monopolies; Contrary to natural-monopoly theory, costs are actually lower where there are two firms operating; Contrary to natural-monopoly theory, there is no more excess capacity under competition than under monopoly in the electric utility industry; The theory of natural monopoly fails on every count: competition exists, price wars are not "serious," there is better consumer service and lower prices with competition, competition persists for very long periods of time, and consumers themselves prefer competition to regulated monopoly; and Any consumer satisfaction problems caused by dual power lines are considered by consumers to be less significant than the benefits from competition.
https://mises.org/library/myth-natural-monopoly
I'd add that the FDA observed that market forces bring prices down basically in a very straight-forward linear way: https://www.fda.gov/about-fda/center-drug-evaluation-and-res...
We also know that as Google Fiber entered any city the incumbent ISP immediately decreased its price.
Natural monopoly is a strange concept. Its formal definition by Baumol: "[a]n industry in which multi-firm production is more costly than production by a monopoly". ( https://en.wikipedia.org/wiki/Natural_monopoly#/media/File:N... )
It sounds like it's almost true in every case where you are forced to duplicate components/processes/efforts/structures, plus even with diminishing returns economies of scale helps the big companies.
Of course why the big incumbents get complacent/inefficient, why they turn to regulatory capture instead of R&D, is a different question.
We also know that as Google Fiber entered any city the incumbent ISP immediately decreased its price.
Natural monopoly is a strange concept. Its formal definition by Baumol: "[a]n industry in which multi-firm production is more costly than production by a monopoly". ( https://en.wikipedia.org/wiki/Natural_monopoly#/media/File:N... )
It sounds like it's almost true in every case where you are forced to duplicate components/processes/efforts/structures, plus even with diminishing returns economies of scale helps the big companies.
Of course why the big incumbents get complacent/inefficient, why they turn to regulatory capture instead of R&D, is a different question.
> That's crazy. Etsy is not the market, it is a market. If you don't like it, you move somewhere else.
Easier said than done due to network effect. That's what they went for. Its also how Amazon and Facebook got so big. Heck, its even why Microsoft Windows got big. Become the cheapest, get volume, then abuse your market domination.
Easier said than done due to network effect. That's what they went for. Its also how Amazon and Facebook got so big. Heck, its even why Microsoft Windows got big. Become the cheapest, get volume, then abuse your market domination.
And we keep subjecting ourselves to that.
It seems to me that the most logical response is for merchants on Etsy to get together and launch their own platform, collectively owned by the merchants. It puts them in control and not at the mercy of some company wielding power over them, while they keep the advantage of having a single platform with a lot of merchants.
In fact, I've also been thinking taxi drivers should do something like that to fight back against Uber. Cut out these artificial middlemen and deal directly with your customer through collective tools that give you the same advantage as the big companies.
It seems to me that the most logical response is for merchants on Etsy to get together and launch their own platform, collectively owned by the merchants. It puts them in control and not at the mercy of some company wielding power over them, while they keep the advantage of having a single platform with a lot of merchants.
In fact, I've also been thinking taxi drivers should do something like that to fight back against Uber. Cut out these artificial middlemen and deal directly with your customer through collective tools that give you the same advantage as the big companies.
Cutting out middlemen is what the Internet has allowed in multiple ways. Its one of the reasons brick and mortar stores are in decline. Yet we also see an increase in middlemen, in the form of dropshipping.
We're also subjecting ourselves to scammers on market platforms and "crowdfunding". I fell for one on Kickstarter, which is also available on IndieGoGo. IndieGoGo acted (by disabling it), Kickstarter has not. In fact, Kickstarter remove any personal information shared by backers about the scammers. Who's side are they on, I wonder? Not the backer's side, it seems.
I assumed these middlemen platforms (Etsy, Kickstarter, etc) are there to please both parties equally. I suppose the keyword in both these stories is service. If they don't provide good enough service, people will eventually work against the network effect to create something better.
We're also subjecting ourselves to scammers on market platforms and "crowdfunding". I fell for one on Kickstarter, which is also available on IndieGoGo. IndieGoGo acted (by disabling it), Kickstarter has not. In fact, Kickstarter remove any personal information shared by backers about the scammers. Who's side are they on, I wonder? Not the backer's side, it seems.
I assumed these middlemen platforms (Etsy, Kickstarter, etc) are there to please both parties equally. I suppose the keyword in both these stories is service. If they don't provide good enough service, people will eventually work against the network effect to create something better.
And different to past history is that network effect is now largely worldwide and not just local to a city or even country.
> I'm one of those sellers who is being forced into Etsy's new ad program.
How are you being forced?
How are you being forced?
They'll be charged 12-15% of the purchase value if Etsy thinks that their buyer clicked on an Etsy-related ad somewhere in the last 30 days.
They mean forced if they want to continue using Etsy, right? Or did I misunderstand the intent of your comment.
That means there is choice, which does not qualify as "forced".
Isn’t that being pedantic? Would any one think a pretty minor private company is forcing some one to do something by setting out rules beforehand?
No company forces bad work conditions on their employees either any more. Since you’re always free to leave. I’d think you can use force in cases like that though (IE at least previously some of Amazon warehouse worker issues)
No company forces bad work conditions on their employees either any more. Since you’re always free to leave. I’d think you can use force in cases like that though (IE at least previously some of Amazon warehouse worker issues)
In South America we have a similar situation with Mercado Libre (ironically called Free Market in spanish). For example, they started charging 1.5% commission, and by the time they had no competition, they have raised it to 11% or more, which is crazy. They force you to ship things (I only want to sell in person because people then dispute things and keep the orders and the money), etc. But at this point it has gotten so big that it is almost impossible to not be there. You just hope that the next purchase will be not through they.
Two things: other platforms and your own store.
There's a lot of other sizable platforms these days. AliExpress, Jet, eBay, Banggood, Wish, Rakuten and more.
And, can you sell a selection of products on those various platforms as teasers to lure customers to more products on your own e-comm? This way, you capture more of the value than give it away to them. You would have to find a way to run your own site/app and do shipping, but that's the trade-offs.
There's a lot of other sizable platforms these days. AliExpress, Jet, eBay, Banggood, Wish, Rakuten and more.
And, can you sell a selection of products on those various platforms as teasers to lure customers to more products on your own e-comm? This way, you capture more of the value than give it away to them. You would have to find a way to run your own site/app and do shipping, but that's the trade-offs.
So I have to ask, why not move to ebay? Is their fee schedule worse than Etsy? I only buy from ebay and from the buyer perspective I enjoy the protections offered.
if Etsy wants to damage their brand than so be it. However there are multiple market places out there and this move by Etsy may be the push people need to look into them or start one.
edit: Found a comparison [0] spreadsheet for fees/etc, no comment from me on accuracy but it does show ebay as higher
[0] https://docs.google.com/spreadsheets/d/1z9PZDYLzlJe4fRgS85UX...
if Etsy wants to damage their brand than so be it. However there are multiple market places out there and this move by Etsy may be the push people need to look into them or start one.
edit: Found a comparison [0] spreadsheet for fees/etc, no comment from me on accuracy but it does show ebay as higher
[0] https://docs.google.com/spreadsheets/d/1z9PZDYLzlJe4fRgS85UX...
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>Amazon has a program that allows "business" customers to place an order and pay the invoice 30 days later.
That is how it works "in real life" everywhere in the world, so i don't see why Amazon should be any different.
That is how it works "in real life" everywhere in the world, so i don't see why Amazon should be any different.
Great idea to drive away the sellers who need you the least, who most have an established consumer base and the means to set up their own storefronts.
OTOH, maybe they feel larger sellers undermine the "handmade" spirit, and don't particularly mind some of them leaving?
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.
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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.
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.
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%.
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%.
> 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).
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).
Dynamic creative from a product feed setup to serve to a retargeting audience of people who visited those pages is not a terribly difficult ad task and certainly something Etsy is capable of doing from an engineering standpoint.
I'm not quite sure why you feel it isn't but I'd like to better understand your perspective.
I'm not quite sure why you feel it isn't but I'd like to better understand your perspective.
And how do they get the traffic to retarget in the first place?
Why wouldn’t Etsy target popular individual store names? It’s a guaranteed financial win for them.
But how much current, organic traffic would this be hijacking?
How much traffic are seller's getting from Etsy itself? Should Etsy charge more for the traffic that they send to sellers that they wouldn't otherwise have?
Everyone wants to pretend that seller's are victims, but let's not pretend that any of them are any more loyal to Etsy than Etsy is to them. How many seller's are in multiple marketplaces? All of which charge much more than what Etsy has been charging for the amount of free traffic they're providing.
The marketplace market has evolved. You can sell your products on Amazon, Etsy, Walmart, NewEgg, Rakuten, and eBay at the same time. An entire industry of SaaS tools has evolved to manage this. Etsy has been way behind the in what they're charging sellers, and none of the seller's benefit if Etsy goes under.
This is what other marketplaces charge, for ALL orders. Providing the same service as Etsy.
Amazon: 6-20% (15% average)
NewEgg: 8-15%
Walmart: 6-15%
eBay: 10%+
Everyone wants to pretend that seller's are victims, but let's not pretend that any of them are any more loyal to Etsy than Etsy is to them. How many seller's are in multiple marketplaces? All of which charge much more than what Etsy has been charging for the amount of free traffic they're providing.
The marketplace market has evolved. You can sell your products on Amazon, Etsy, Walmart, NewEgg, Rakuten, and eBay at the same time. An entire industry of SaaS tools has evolved to manage this. Etsy has been way behind the in what they're charging sellers, and none of the seller's benefit if Etsy goes under.
This is what other marketplaces charge, for ALL orders. Providing the same service as Etsy.
Amazon: 6-20% (15% average)
NewEgg: 8-15%
Walmart: 6-15%
eBay: 10%+
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I know this sounds crazy, but for E-Commerce, you never go with all these third party "platforms" as your sole business strategy.
1. First of all, you can't differentiate much in terms of offering and most of the time, you're put in a position of having to compete by price if there are similar offerings in the same platform.
2. Believe it or not, it's only a matter of time when other sellers (particularly from CN) will replicate your offering if they ever find it to gain traction and will force you to compete by price.
3. Because you're pushed into a red ocean, you barely get to build your brand and curate your own email list.
4. Finally, you can avoid all these random fees by having your own shop. These fees can make or break your business especially if they force you to increase the price of your products.
I've been in the E-Commerce (mostly drop-shipping) business for many years now and I will never recommend anyone to solely rely on Amazon or Etsy or Ebay or even Shopify. Get a domain name, roll out something quick. Use WooCommerce or Magento or whatever it takes. Start off with a simple shared hosting account if you can't afford to pay a lot, use the rest of the money to advertise on Facebook/Instagram and start building your own list. When you grow, move to something like AppEngine on GCP or some managed dockerized hosting on AWS so that you don't need to worry about devOps.
You'd be surprised, how effective this strategy is over the long term, than having to sell your data to all these platforms which you're helping to grow by paying your money to them and as well as data. I know atleast Shopify effectively sucks your analytics from your shop and resells it to you back as a premium offering called "Shopify Analytics" (https://help.shopify.com/en/manual/reports-and-analytics/sho...).
Install Google Analytics and Tag Manager, read some tutorials and setup event tracking. Feel free to ping me if you need help. You'll then start to see how much valuable data you've been giving away to these leeches for free (sometimes even paying a fee to them to steal your data).
With all of the above and the right combination of products, UX, ads, you can easily make much more than relying on these third party platforms.
1. First of all, you can't differentiate much in terms of offering and most of the time, you're put in a position of having to compete by price if there are similar offerings in the same platform.
2. Believe it or not, it's only a matter of time when other sellers (particularly from CN) will replicate your offering if they ever find it to gain traction and will force you to compete by price.
3. Because you're pushed into a red ocean, you barely get to build your brand and curate your own email list.
4. Finally, you can avoid all these random fees by having your own shop. These fees can make or break your business especially if they force you to increase the price of your products.
I've been in the E-Commerce (mostly drop-shipping) business for many years now and I will never recommend anyone to solely rely on Amazon or Etsy or Ebay or even Shopify. Get a domain name, roll out something quick. Use WooCommerce or Magento or whatever it takes. Start off with a simple shared hosting account if you can't afford to pay a lot, use the rest of the money to advertise on Facebook/Instagram and start building your own list. When you grow, move to something like AppEngine on GCP or some managed dockerized hosting on AWS so that you don't need to worry about devOps.
You'd be surprised, how effective this strategy is over the long term, than having to sell your data to all these platforms which you're helping to grow by paying your money to them and as well as data. I know atleast Shopify effectively sucks your analytics from your shop and resells it to you back as a premium offering called "Shopify Analytics" (https://help.shopify.com/en/manual/reports-and-analytics/sho...).
Install Google Analytics and Tag Manager, read some tutorials and setup event tracking. Feel free to ping me if you need help. You'll then start to see how much valuable data you've been giving away to these leeches for free (sometimes even paying a fee to them to steal your data).
With all of the above and the right combination of products, UX, ads, you can easily make much more than relying on these third party platforms.
Curious, what do you think of Sellfy? It gives you email lists, and analytics.
I'm currently building an e-commerce platform like Etsy, and tossing up some ideas of what kind of features to provide for sellers with respect to their brand, email list, and analytics, paywalled content etc.
I'm currently building an e-commerce platform like Etsy, and tossing up some ideas of what kind of features to provide for sellers with respect to their brand, email list, and analytics, paywalled content etc.
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!
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.
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.
Huh!
> If you’ve made more than 10,000 USD (approximately 7,800 GBP) in sales on Etsy in a 12-month period you’ll benefit most from offsite advertising. So, you’ll be required to participate for the lifetime of your shop and you’ll get a discounted advertising fee.
If you make a living off your Etsy shop then surely you will have more than 10K sales a year. Even if not in the USA, I am originally from Hungary and the minimum yearly wage is 6K USD.
Let's run another calculation. If you are selling at an average price of 20 USD (which can be just a t-shirt) then you only need to sell four things every three days. That's... not a lot.
> If you’ve made more than 10,000 USD (approximately 7,800 GBP) in sales on Etsy in a 12-month period you’ll benefit most from offsite advertising. So, you’ll be required to participate for the lifetime of your shop and you’ll get a discounted advertising fee.
If you make a living off your Etsy shop then surely you will have more than 10K sales a year. Even if not in the USA, I am originally from Hungary and the minimum yearly wage is 6K USD.
Let's run another calculation. If you are selling at an average price of 20 USD (which can be just a t-shirt) then you only need to sell four things every three days. That's... not a lot.
I would hazard a guess that 90%+ etsy sellers are hobbiest getting nowhere close to 10k/year
Looking at this from a numbers game, as Etsy is probably doing, this is a guaranteed money source for them. All they have to do is claim they are running internet ads for your product. Whether that ad worked or the sale just happened based on normal Etsy traffic, is probably not disclosed. Hence Etsy has 100% control of the information and therefore can bet, let's say $1M per day towards this, but on the flip side, can guarantee that a 12% fee increase (for the stores that will be required to pay it) will already be $2M per day.
My numbers are fake but you get the gist.
My numbers are fake but you get the gist.
"We've decided to help ourselves to 15% of sales. If you don't like it, get the hell off of our platform."
Are there any platforms / marketplaces that don't treat their vendors like garbage?
Are there any platforms / marketplaces that don't treat their vendors like garbage?
shameless plug but my marketplace farmsbeforepharmacies.com takes 0% but that's because it's in the hemp industry and we cant take payments yet ;-)
Does anybody know what happened to the small businesses that used to use Etsy? Did another service open up for them? I suppose they may have gone to Shopify, but that fragmentation of storefronts reduces discoverability. The ability to search a vast set of niche widgets was probably Etsy's best selling point.
Every small business having its own storefront, and may or may not be doing SEO properly, is likely to mean less aggregate sales for all those businesses.
Every small business having its own storefront, and may or may not be doing SEO properly, is likely to mean less aggregate sales for all those businesses.
Sounds like an opportunity for some of the larger sellers to band together to create larger combined storefronts. Or for someone to open something like a selective/curated version of Etsy for larger sellers and small business.
I should read my Etsy email more often. Now I need to move my little sideline to a different market. Etsy is getting all greedy. Time to make my own website and cut out a middle-bot.
Since most of my sales are from my own word-of-mouth - a google ad is a worthless investment. All that will happen is someone who has a gmail account will purchase from me, google will notice this, present an ad then I'll get charged for the ad on next purchase. Nice little earner for Google and Etsy but useless to me.
Opt out? Sure, but I'm sure there's a stinger somewhere in the terms that will cost me in some obscure way. No thanks. Its actually worth me spending 40 hours figuring out an alternative. Then be done with them completely. More likely I'll replace Etsy with a simple investment of 5 - 8 hours.
For those curious, I sometimes make wooden furniture as a hobby. These are one-offs. Sometimes on commission/custom order but otherwise I usually sell one piece a week. So no, I don't use google ads etc. I'm not a mass-produce kind of operation and my customers know it. Its part of the appeal.
Since most of my sales are from my own word-of-mouth - a google ad is a worthless investment. All that will happen is someone who has a gmail account will purchase from me, google will notice this, present an ad then I'll get charged for the ad on next purchase. Nice little earner for Google and Etsy but useless to me.
Opt out? Sure, but I'm sure there's a stinger somewhere in the terms that will cost me in some obscure way. No thanks. Its actually worth me spending 40 hours figuring out an alternative. Then be done with them completely. More likely I'll replace Etsy with a simple investment of 5 - 8 hours.
For those curious, I sometimes make wooden furniture as a hobby. These are one-offs. Sometimes on commission/custom order but otherwise I usually sell one piece a week. So no, I don't use google ads etc. I'm not a mass-produce kind of operation and my customers know it. Its part of the appeal.
This strikes me as the day Etsy becomes the MySpace of their world.
They do need to make money. But the marketing hype around this change just seems so dishonest.
They do need to make money. But the marketing hype around this change just seems so dishonest.
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. =)
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.
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.
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Its win win for store fronts.. prices will just go up to compensate.
It's not a win for the stores if they sell less because they had to increase prices.
For some reason you assume that the stores don't already know their customers and haven't already maximized their prices.
For some reason you assume that the stores don't already know their customers and haven't already maximized their prices.
Clearly they were getting free advertising subsidy, so maybe they don't fully know their costs.
Etsy is really not a good platform. There’s gotta be a better way to set up these markets. It is now a little more than trivial to roll out your own web store at zero cost. Why pay these exorbitant fees?
because some people goes directly to etsy and if you are not there you are losing a sales. However, what etsy is doing, is what booking has done to the hospitality sector, it reinvests many of the money it gets from selling your products in getting more people and more sales done, to the point that they are working almost as your digital marketing agency. Probably you would be better investing the dollars that you pay to the marketplace in your own online ads campaign, but if you are small maybe it's not worth the work.
Also, once someone has made his first purchase on the platform (call it etsy, airbnb, amazon, booking, whatever). It's easier to make a second purchase than register in another new site.
Also, once someone has made his first purchase on the platform (call it etsy, airbnb, amazon, booking, whatever). It's easier to make a second purchase than register in another new site.
faintrain(3)
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 what the uproar is about.
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 what the uproar is about.
How does this guarantee it is incremental? What is to stop them from executing an extremely common e-commerce strategy of running a product feed to produce dynamic creative and retarget people who have already visited a store before?
There are other ways as well where it may not be incremental.
But without transparency and control of tracking and segmentation, users can't determine that at all.
There are other ways as well where it may not be incremental.
But without transparency and control of tracking and segmentation, users can't determine that at all.
What's important is how do you drive new business and traffic, which is an entirely different ball game than retargeting traffic you've already acquired.
The title seems fairly accurate, if not poetic, to me.
> 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 costs of their supply chain. "Suddenly, we decide when your margin drops by twelve percent and there is no recourse except to fuck off" is bad.
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 costs of their supply chain. "Suddenly, we decide when your margin drops by twelve percent and there is no recourse except to fuck off" is bad.
> 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.
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.
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 of my organic traffic, I make a _loss_:
- Organic Orders: 450
- Value (AOV): 20
- Margin: 15%
- "Extra" Orders: 150 (100 from above, plus 50 that _would_ have been organic but are now attributed to ads)
- Gross: 12000
- Net: 1440
I'm doing 20% more work, and making _less_ money.
Even if you increase the margin to 25%, you can still be looking at very marginal gains for the additional work if there is a shift from organic to ads (500 sales - net 2500; 450 sales + 150 ad sales - net 2640). As a seller, it's driving my workload up without giving a corresponding return, which might not be wanted. That's why not being able to opt-out is a problem - for some sellers, it could make a lot of sense and drive profits; for others, it could be an unwanted drain.
- 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 of my organic traffic, I make a _loss_:
- Organic Orders: 450
- Value (AOV): 20
- Margin: 15%
- "Extra" Orders: 150 (100 from above, plus 50 that _would_ have been organic but are now attributed to ads)
- Gross: 12000
- Net: 1440
I'm doing 20% more work, and making _less_ money.
Even if you increase the margin to 25%, you can still be looking at very marginal gains for the additional work if there is a shift from organic to ads (500 sales - net 2500; 450 sales + 150 ad sales - net 2640). As a seller, it's driving my workload up without giving a corresponding return, which might not be wanted. That's why not being able to opt-out is a problem - for some sellers, it could make a lot of sense and drive profits; for others, it could be an unwanted drain.
> 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?
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?
"Forced participation if you do more than $10,000 is ridiculous, but I otherwise fail to see what the uproar is about."
Well, the uproar is about the forced participation. If you remove that, then you obviously will fail to see the reason for the uproar.
Well, the uproar is about the forced participation. If you remove that, then you obviously will fail to see the reason for the uproar.
It’s really hard to know whether it’s actually new sales. For example, if my Etsy storefront ranks in the #1 position for “artisanal doorstops”, etsy can buy that keyword, users I would have gotten organically now go through the ad, as it’s a higher position. Now I’m paying for the customer I would have converted organically.
But it gets even more insidious when you think about people who have multiple stores on different platforms. Let’s say you also own artisanaldoorstops.com and it goes to a Shopify site. Sure most of your business comes from Etsy, but you’re working hard to build your own brand and reduce your dependence on Etsy. Now, with this change, any success your standalone storefront has will be undercut by Etsy buying ads against your own store AND TAKING MORE OF A CUT.
Tangentially, this is the same thing opentable does with restaurants, they will sign up a restaurant and then buy AdWords for the name of the restaurant. I’ve seen stats that upwards of 25% of restaurant bookings can be redirected from the restaurant website to opentable simply via a top position ad spot. It’s the same scenario and it hurts restaurants significantly.
But it gets even more insidious when you think about people who have multiple stores on different platforms. Let’s say you also own artisanaldoorstops.com and it goes to a Shopify site. Sure most of your business comes from Etsy, but you’re working hard to build your own brand and reduce your dependence on Etsy. Now, with this change, any success your standalone storefront has will be undercut by Etsy buying ads against your own store AND TAKING MORE OF A CUT.
Tangentially, this is the same thing opentable does with restaurants, they will sign up a restaurant and then buy AdWords for the name of the restaurant. I’ve seen stats that upwards of 25% of restaurant bookings can be redirected from the restaurant website to opentable simply via a top position ad spot. It’s the same scenario and it hurts restaurants significantly.
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 an ad click[1], effectively at Etsy's discretion (how can you challenge that someone clicked, or disagree with how hard they are pushing your products - especially noting that they have a binding arbitration clause[2]), could be a huge percentage[3] of your total sales.
[1] "If such advertising includes your listing, a buyer clicks on it, and then places any orders from your shop within 30 days of that click, you will be charged an advertising fee on these orders" https://www.etsy.com/uk/legal/fees/
[2] s.11 https://www.etsy.com/uk/legal/terms-of-use#etsydisputes
[3] Up to $100/order - "There is no limit to the number of Offsite Ads fees you may be charged on Attributed Orders, but the total Offsite Ads fee you’ll pay on a single Attributed Order will not exceed $100 USD." https://www.etsy.com/uk/legal/fees/