Etsy, the e-commerce shop for crafters and artists, faces backlash from its sellers for implementing an increase in seller fees.
According to NPR, sellers are on strike against Etsy this week after the company released that it would increase transaction fees from 5% to 6.5%. The increase was set to take effect on April 11th. CEO Josh Silverman said the increase is to ramp up marketing, improve seller tools, and other needed adjustments.
In response to the increase, Etsy sellers formed together to show their disdain towards the company’s decision. Sellers launched a campaign listing their demands and urged one another to stop sales for a week in protest. Of the company’s 5.3 million sellers, 20,000 have petitioned the company, and roughly 5,000 have agreed to halt sales in support of the strike.
A letter was sent to Silverman on behalf of Etsy sellers that stated, “Etsy has become a downright hostile place for authentic small businesses to operate. For both full-time and part-time sellers alike, the changes on Etsy have brought many of us to the brink of financial ruin.”
They continued their exasperated sentiment by including that the sellers of Etsy give the company its high-profit margin, and they continued to produce even under the challenging circumstances of the COVID pandemic.
Due to the nature of Etsy, the strike against the company is not one of the traditional types. Etsy hosts independent sellers on their site, so those on strike do not work for Etsy and thus are not covered by the National Labor Relations Act.
According to the WSJ, after two years of exceptional growth, Etsy is looking to evolve into a significant contender in the e-commerce sector.
Throughout the pandemic, Etsy was one company that reaped the benefits from online shoppers. Shares in Etsy’s stock increased ninefold from March 2020 to November 2021.
Overall merchandise sales from Etsy sellers totaled $12.2 billion in 2021, compared to just $5 billion in 2019.
Consumers are returning to stores causing e-commerce to slow. However, Silverman looks at this as an opportunity to capitalize on the potential Etsy has to offer. Silverman said, “We must and are competing against the biggest names in e-commerce and all of retail…but we believe we have a real opportunity to win.”
Kristi Cassidy, a seller on Etsy, said that Etsy’s goals are incompatible with artisans who made the company what it is. Sellers like herself who make homemade items are limited in how much they can produce and how quickly they can get the product sent out.
An increase in marketing and advertising ventures is not conducive to these sellers as they cannot increase production and are likely not to experience an increase in revenue.
In a quote obtained by the WSJ, Cassidy said, “It’s like they’re trying to be Amazon, and there’s a reason why I don’t sell my products on Amazon.”
Etsy launched in 2005 and offered specialty or niche-based items. Last year Etsy boasted 90 million active buyers.
Some sellers are participating in the strike to protest the increase in transaction fees, while others are fed up with the company’s general practices and standards toward sellers.
WSJ gained feedback from sellers like Bella Stander, who said the company forces sellers who make above $10,000 a year to take on off-site advertising fees, and shipping costs and penalize a seller for not responding to a buyer within a prescribed time frame.