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Apr 14, 2022
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Winner Take All

Co-author of the best-seller Modern Monopolies. Platforms like Facebook and Google are 21st...

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Over 14,000 sellers on the publicly traded marketplace Etsy have gone on strike, demanding that Etsy cancel an announced hike to the platform's take rate that took effect April 11th. This move comes after Etsy raised fees from 3.5% to 5% in 2019. Sellers are also subject to a $0.20 listing fee, 3% + $0.25 fee for payment processing, and a 12% or 15% offside ads fee when an item is sold via Etsy's marketing ad spend.

Thousands of sellers enacted this strike by putting their shops in vacation mode, effectively suspending all business. In this video I look at why Etsy claims they need to raise fees and wonder where competing platforms like eBay are in trying to attract these disgruntled sellers onto their own marketplace.

We've been bullish on Etsy's aggressive M&A strategy as a mid-market tech player and I think much of the backlash here is based on the fact that Etsy is raising fees while not really giving anything back to the sellers. This is a classic example of how platforms tend to squeeze producers (in this case, sellers) as they grow and move towards monopoly status. I'm not sure if Etsy will backtrack on its rate hike but I think sellers may get some of what they want here if they can hold out for a bit.

00:00 - Etsy sellers on strike 00:20 - Etsy is raising fees for sellers 00:58 - Etsy's strong platform growth 01:53 - How does Etsy increase profits? 03:55 - How many sellers are on strike? 04:22 - Is this justified? 05:41 - Sellers don't have an app?! 06:23 - What Etsy is missing 07:43 - Etsy and competition

#Etsy #EtsyStrike #Strike β€”

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  • There's an easier solution: Pass the expense on to your consumers that insist on purchasing on the Etsy platform, and continue to sell on other platforms at lower prices. The whole problem is that Etsy has market leverage, and the best way to erode that leverage is to get consumers to find you on other platforms that are cheaper and easier to use. If consumers find Etsy to be easy to use and are willing to pay the premium, then everyone's happy.

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  • Oh, the horror stories I could tell you about Etsy! They killed my business. Did it on the sly, and then delivered a bit whammy as the coup de grace. And while I know that makes me biased.... there used to be entire forums filled with vendors who were miffed, to say the least!

    What you have to understand is that Etsy is notorious for changing things up. When I first started about 6 years ago, back during the "glory days" of only a 3.5% take-rate, it was halfway decent and took me only a few months to figure things out. Then they made a small change. As soon as you got used to that.... they'd make another small change. Soon, it was a change every quarter, and sometimes more often. They always sold the changes to the vendors by claiming it was to make Etsy more user-friendly and get customers in the door. This was a lie, obviously, because the changes happened so fast in succession that you simply couldn't get enough data to see if it was working. They'd make a change, then two months later make another change that made the first change completely useless.

    For the vendors, though, it made it impossible to keep up with. As soon as we got used to how the site worked, and what worked for us in terms of marketing, they'd change things up and we'd have to start all over again. The constant changes made any of the analytic tools they offered completely useless because there was no way to tie what the analytics showed to anything we were doing, or Etsy was doing. How can you know what works or doesn't work if you never give anything time to develop?

    As for the assertion that Etsy will use the cost increase to help fund measures to remove certain sellers on the platform -- you completely missed the truth of that. No, they are not going to get rid of the "fake" sellers. Etsy makes huge amounts of money off those fake sellers. This is exactly why they allowed mass-producers to sell on Etsy in the first place. The two biggest revenue streams for Etsy are jewelry and jewelry supplies. Guess which two revenue streams are also almost 100% mass-producers from China? Yep.

    And you can believe that Etsy made a big deal about how great it would be for the vendors who sell jewelry because now they could buy the materials they needed right on etsy. In truth, Etsy was just looking to make a buck. The down side to that little tidbit is that it killed the sense that Etsy was a place for the hand-made and more-cultured products a real craftsman can produce. That one move made Etsy look like nothing more than a lower-tier version of Ebay.

    What they really mean by the "remove sellers who violate our policies" is that they are going after anyone who doesn't openly toe the party line. The "conservatives of Etsy" forum group used to be chock full of vendor who had been banned from the main Etsy forum for the most trivial of reasons. I remember when they instantly removed any listings that had Washington Redskins apparel and merchandise. One day it was perfectly "legal" and the next day thousands of vendors had their listings deleted and not a single penny was ever repaid to them. And, yes, you do have to pay to list things on Etsy.

    When they talk about removing vendors who violate rules, this is what they are talking about. Etsy is a devoutly leftist company with a history of spending small fortunes to support democrat candidates and policies.

    It was that leftism which put me on their radar. The shadow-banning was something I missed entirely until someone mentioned it. Then I could see how it made sense because I was selling only one type of forged hook for the longest time. Then all of a sudden, orders for those died off and only another type of wall hook would get orders. My pendants stopped selling entirely even though they had always been good sellers. My European customers absolutely vanished. Over the last two years, after I openly ran into trouble with a moderator on the main forums who made a false claim against me... my numbers continued to decline even though I was doing everything they said I should be doing.

    I added new products. I increased the number of listings several fold. I changed up the "keywords" and edited my listings regularly.

    For the first two years, I had seen stellar growth and thought I was really on to something. The next three years, though, it was all down hill no matter what I tried. I couldn't explain it, either. I worked hard to make sure I was doing everything right because I really really wanted this to work! I didn't even mind when they went to 5% because I thought that was more than fair.

    The downhill slide, though, was a problem. When revenue is dropping right along with views, visits, and purchases.... what's a guy supposed to do? I'd made an enemy at Etsy, but there wasn't anything I could do about it. When they finally screwed me over, ruining my shop, I can't say I was surprised. In a way, I'm kind of glad to be done with them. I haven't found a better place to do online business, and rebuilding after this nightmare experience hasn't been easy. But in the end I'm glad to be done with Etsy. They are truly horrible people. They remind me of the Commissars of the USSR. They were living large at their NYC headquarters, ordering outlandish meals and everything else you could imagine, all the while refusing to listen to anything the vendors had to say.

    You'll never hear me say a good word about Etsy. They are as close to evil as you can imagine, and I don't say that lightly.

  • Etsy sells stuff that makes jokes about Pizzagate type behavior as well as way too many shops with crazy gender fluid identity stuff. At one point, they sold merchandise that said "good nigh white pride" that showed a white man getting kicked to the ground. It is Jew owned.

  • Etsy is not a fulfillment model like Amazon... it is up to each producer to fulfill all sales on their own. So with fees applying to the transaction total (with shipping) it doesn't pay to list anything sizable or heavy. Etsy does have a Seller app. There are two apps for smarts, the buying and the selling app. Plus, why does Etsy have to be compensated to remove sellers who blatantly violate the premise of listing on Etsy? It is LOADED with Taiwan and Hong Kong crap. Etsy is now wanting to justify fee increases to enforce this! Screw them.

  • I left Etsy for good when this happened. Previously, Etsy all but forced vendors to provide free shipping. Shadow banning vendors that couldn't afford to take that hit to their bottom line. Get this, Etsy's fees were based on item cost INCLUDING SHIPPING. You lost money on the item for providing free shipping, which Etsy charged you for. I don't need them. This was a fee too far.

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