A few days ago Etsy announced a change to its pricing structure. It will now charge 5% commission instead of 3.5% on items sold, and unlike before, that 5% will also be applied to shipping costs. Applying the commission fees to shipping has a lot of sellers crying foul.
In order to make this easier to swallow, they also announced the release of a new suite of tools that can be had for the monthly price of $10 – until January when the price goes up to $20 per month. Most of my fellow Etsy Sellers were not impressed.
Previously, new handmade sellers have gravitated to Etsy, because Etsy seemed to understand we were interested in our craft first and foremost, and selling second. We didn’t have to be perfect entrepreneurs right out of the gate. The changes make it imperative that a shop make money right off the bat and consistently just to afford the changes. It’s rare that a shop from an inexperienced seller is going to thrive so quickly.
I really do not have a huge issue with Etsy raising their commission fees. When I make money, I am glad to share with the venue hosting my products. (Although, I disagree vehemently with the commission being applied to shipping costs.) As a new Etsy seller (I had the shop a year) my issue is with the expense of their suite of new tools.
So let’s look at the big picture. All sellers want to know what it’s going to take to get on the front page of an Etsy search. A little research shows that front page shops all have had shops for quite some time (years]; they have had a lot of sales; and they have a lot of items in their shop – often hundreds. So a long established presence with a significant inventory.
What can a newbie do to compete? Length of time? Nothing to do, but stick around. Sales? Learn to drive traffic to your shop yourself. Etsy does offer you the option to pay to promote your items. I did not try that, so I don’t know what the cost is or if it is effective. That leaves inventory. You can increase it. How quickly depends on the nature of your items (for me, it is handmade jewelry) and how much time you can devote to it.
You will pay 80 cents per year to keep that item on Etsy. If you have 100 items (for the handmade jewelry category, I estimate this is the least you should have to have a chance of getting recognized by Etsy’s algorithm), that’s $80 per year. Next, in order to have access to this suite of tools that is supposed to aid in your success as an Etsy Seller will cost $240 per year. So I need to make $320 per year to afford to sell on Etsy. I made a total of $345 in my first year. So that leaves $25 to cover my costs. Laughable.
An argument can be made that I wouldn’t necessarily have to pay for the suite of tools. True. So how would this disadvantage me? First it gives me little opportunity to compete with those sellers that have a long established presence who can afford to fork out the extra $240 per year. Next, and although Etsy says that sellers who choose not to subscribe to their suite of tools will not be disadvantaged, I find this disingenuous at best.
So Etsy and I have had a parting of the ways. I am now using Storenvy’s platform and my own domain name: bijoubeadboutique.com. There are no fees for uploading items. Storenvy makes money when I do. I do pay $5 per month to use my own domain name – but that is a choice, not a prerequisite for doing business.
I’m excited to see how this goes!