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