A Perspective on Etsy Changes and Mandates; Taking a Step Back
Let's see if I can give you a perspective on some of the Etsy changes that have caused such a recent stir. Etsy recently started an off-site all-inclusive advertising project where an additional 15% charge kicks in only when there is a sale. At the same time Etsy allowed many, BUT NOT ALL, shops to opt out; the project is mandatory for high earners. Mandatory sounds a lot like a TAX. This has caused well publicized resentment among high earners, who pay a smaller 12% additional fee, but who don't need or want the service. (Edit 3-10-20; That last sentence should say: This has caused well publicized resentment among high earners, who pay a smaller 12% additional fee, but who don't want to pay for the service they have already been getting for FREE.)
I am the first to say there are many things I DO NOT like about Etsy. That being said, Etsy has been advertising off-site, free, on behalf of vendors for some time. How long, I don't know, but before I ever paid for advertising, I could search my items and find them listed off-site as Etsy ads. And after I stopped paying for additional advertising, I could still find the ads. I do not begrudge them wanting to recoup that business expense.
So, what's the up side? Enter usual and customary. Last year I asked my accountant about usual and customary sales commissions and heard the astounding reply of 40% of the sale. This was a big reality check. So take a deep breathe and compare the usual and customary 40% sales commission fee to the Etsy total of 20-25%. Hmmm.
When entering into a business deal, it is best if all cards are on the table up front. Most on-line venues and social platforms DO THAT using contracts that convey that the online company has all the rights and vendors are free to to use the platform or not. We ignore the loss of standing because we want to use the site; we get hooked by free. Who doesn't like free, right?
Here's the rub. Any service or asset offered for free can be revoked at anytime. Take an ice cream cone away from a toddler sometime and watch the effect. Not pretty. And being handed fee mandates is basically a tax. So our options are to stay on the channel, or not. We are living transformation via contracts, carrots and mandates. LEARN.
For now, from a strictly business perspective, Etsy's new charges are inline with Amazon Handmade, as well as less than the usual and customary 40% sales commission. So we will continue to use the platform, for now. Because of ever rising costs on online sales channels, last year a concerted effort began, shifting our business focus to local sales and our own website. One day soon we will probably say b'bye to Etsy; but not today.
In the Matrix, we adapt, or die.
- Catherine Schmid Murphy