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Added Feb 13, 2013 at 05:20PM EST by Brad.

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Etsy is an online shopping website know best for primarily selling handmade items and having low fees for sellers.


Etsy went public in 2015 and performed poorly that year.[1] Due to anger from shareholders of the continued poor performance in the stock market, the CEO was replace with Josh Silverman in 2017.[2]

Increase in fees

In 2018, fees were increased from 3.5% to 5% and would in addition begin to apply to shipping costs.[3] The addition of the shipping fee meant some sellers would pay more than twice the amount of fees in situations where shipping costs are more than the item cost.

In 2020 Etsy announced a new advertising program in which shop owners making under $10k in annual sales can opt out, but those making more can not. Those making less than $10k annually will be charged an additional fee of 15% per ad click that results in a sale. A 12% fee for those making over $10k in annual sales. A sale that results from an ad click would come to 23% in fees (5% etsy fee, 3% credit card transaction fee, 15% ad fee) for those making under $10k annually, or 20% for those making over $10k annually. The lack of ability to opt out for certain shop owners and uncertainty of random sales getting an additional 12 to 15% fee have lead to a lot of anger in the etsy community.[4]

Banking Error Controversy

On February 15th, 2019, Etsy accidentally withdrew hundreds or thousands of dollars from random shop owners' bank accounts, leaving many of them with overdraft fees and without any money in their bank accounts. Instead of canceling the transaction, Etsy attempted to solve the problem by refunding everyone affected. The problem that arose from that is it happened on a friday, with monday being a national holiday, so the people affected wouldn't actually get the money back into their bank accounts until tuesday. Another problem is the refund would show up as income on their 1099 tax form, meaning they would have to pay taxes on the money that Etsy accidentally withdrew from them.[5]

Free Shipping Controversy

In 2019, Etsy announced plans to limit the visibility of items from shops that do not offer free shipping.[6] Items without free shipping were initially blocked from the first page of search results, which Etsy claims is where 83% of sales come from. This lead to outrage from shop owners, specifically from those who sold large or heavy items that were very expensive to ship. A few weeks after the implementation, Etsy quietly rolled back some of the changes to the search algorithm and now allow items without free shipping to appear on the first page of search results. Etsy stills say items that ship for free "will be prioritized" in search, but doesn't make clear to what extent[7]

Search Interest

External References

[1] Etsy stock

[2] Stockholders

[3] Fee increase

[4] Ads

[5] Banking

[6] Free shipping

[7] Etsy shipping policy

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