The announcment of a substantial Etsy fee increase from 16th July has caused a lot of anger. The fee increases are coupled with the introduction of a range of new premium “packages”. Plus they may be changing how they calculate VAT fees (for EU sellers).
All in all, it adds up to a significant Etsy fee increase for many sellers.
Etsy Fee Increase
Up until now the basic fee when selling an item on Etsy has been 3.5% of the selling price. This will be increasing to 5%. What has angered sellers though, is an additional fee announcement. There will also be 5% fees on the SHIPPING element of each sale. So 5% of a seller’s gross.
Anyone selling large or heavy items, or who sells international, will, therefore, see quite a dramatic increase in their fees. For a while now, Etsy has been pushing sellers to reduce postage fees via pop-ups in our shops. Having to now put them up to cover a fee that only Etsy benefits from is naturally causing a lot of anger.
For EU sellers this Etsy fee increase will be even more substantial. Many EU sellers pay VAT on their seller fees, at whatever their country’s rate is. For a UK seller (like me) that is currently 20%. A seller who is VAT registered does not need to pay these fees directly to Etsy. The majority of UK sellers have no reasons to register for VAT (we have a high threshold for it here), and this is the same for many other Etsy sellers. Keep reading for another VAT sting on the horizon…
The 20c listing fee will not be changing.
New Seller Packages
Etsy will be introducing two new premium (monthly fee) plans for sellers. The Packages are:
Standard – this is the basic Etsy experience as it currently stands, with no additional charge for sellers
Plus – Additional tools. The Plus plan will be $10 for US sellers and £7.50 for UK sellers (I assume other countries have comparable rates). These fees will double to $20 and £15.10 from January 2019. More details below.
Premium – “advanced tools that let you run your business like a boss” and will Etsy will release it in 2019.
So what does one get with a Plus Package?
The information about exactly what the Plus package includes is currently rather sparse.
“Credits you can use to list or renew items 15 per month” ($3 / £2.30 value). I am seeing sellers saying they have been told these will not roll over from one month to the next.
Promoted Listings credit
“Credit you can apply for advertising on Promoted Listings” $5 / £3.80 monthly. Many of us do not use Promoted Listings and have no desire to. Sellers have also raised the good point that this inclusion of promoted listings could significantly increase the overall number of promoted listings in use. This would reduce the effectiveness of each listing.
Advanced shop customization
“Stand out from the crowd with new customizable options for your banner and featured listing area on your shop home”. Some people suspect that this could include the “one very large featured item picture and four small ones” that was temporarily seen in some shops earlier this year.
“Let shoppers who visit sold out listings sign up to be notified when the item is back in stock.” Some sellers will find this a very useful tool. But it will not be of use to many sellers though (most vintage, one of a kind or digital).
Custom packaging and promotional materials
“Get discounts from our partners, just for Etsy Plus and Etsy Premium subscribers.” Again, no additional information. Will this be USA only? How good will these discounts be? Does “custom” mean OUR branding or Etsy’s? Sellers can’t yet tell whether this will be of any use or not.
Custom web address
“Save on a custom URL that redirects to your Etsy shop and gives your business cards a personal touch” There is a little more info for this. The saving is for the first year only. We are assuming it is the same service currently offered to owners of Etsy Pattern shops. If so, there are more economical options available from other domain name sellers – GoDaddy offers the first year for 99c/99p – will Etsy be beating that? There are seller concerns that this could mean that Etsy will be preventing people from using domain names from other suppliers, something that many of us already do.
And the Premium Package?
This will be announced in 2019. So far Etsy has said that it will include everything in the Plus package as well as the following:
Advanced management tools
“Take control with tools built for business owners with employees”. This could possibly mean that we will be able to give an employee limited access to the account (something many shops have wanted for a long time). No further details have been supplied.
“Get a faster response when you need help from our support team”. This has caused quite a bit of upset from sellers. Etsy is pretty notorious for their unpredictable customer support (though I must say that I personally have always had quick and helpful responses when I have contacted them). Many sellers feel that we are all their customers and should have access to first class support.
New advanced tools, Listing Credits and Promoted Listings
No further details for exactly what any of these will include.
There is also no information yet on how much the Premium package will cost per month.
Etsy has said “Etsy Plus and Etsy Premium are completely optional. If you choose not to subscribe to a plan when they become available, you’ll continue to have access to all the tools and services you use today.”
So What Is Etsy going to do with all the extra money they will be getting?
Naturally, many sellers are asking what Etsy intends to do with the money they will raise from the Etsy fee increase and new subscription packages.
Etsy has said “We’re updating our transaction fee to help us invest more in bringing buyers to Etsy, building tools that make it easier for sellers like you to run your shop and providing the support you need to grow. As always, our goal is to make Etsy the best place for running a creative business online, and we think these changes will make Etsy even better.” Exactly what this investment will consist of is not revealed.
Here is a link to the (slightly heated) Q&A thread on the Etsy forums.
Additional VAT costs for EU sellers
Some Etsy sellers have received emails saying that Etsy intends to collect VAT from payment processing fees. A couple of knowledgeable sellers have raised concerns that this is not a normal, or legal, practice for VAT collection. Many of us have not had this email though, including me. When asked about the situation in the forums, Etsy has not yet given an answer. Emails have been sent and hopefully, they will soon clarify this situation.
Coupled with the Etsy fee increase, this additional VAT could have quite an effect on many small EU sellers.
Substantial Etsy Fee Increase and More – Sellers Angry