Online marketplaces continue to pressure sellers to offer free shipping, with Etsy the latest to launch a new initiative. We surveyed sellers about major changes coming to the Etsy marketplace, and eBay sellers should pay close attention – they could be next. eBay has already begun following in Etsy’s footsteps by rolling out its own managed payments, and once it has finished, it’s likely to impose some of the same policies Etsy has instituted.
Last week’s survey asked Etsy sellers what they thought of the changes announced on Tuesday, and if they planned to make any changes to their selling strategy. The following excerpt from a letter to sellers from Etsy CEO Josh Silverman explains in a nutshell what’s coming – you can read the full letter on the Etsy website:
“Starting on July 30, 2019, we’ll give priority placement in US search results to items that ship free and to shops that guarantee free shipping to US buyers on orders of $35 or more. This means that shoppers in the US will primarily see items that ship free and shops that guarantee free shipping on orders of $35 or more in the top and most visible rows of search. We’ll also begin to prioritize these items wherever Etsy advertises in the US—in email marketing, social media, and television ads.”
Silverman said shoppers on Etsy are 20% more likely to complete their purchase when the item is marked as shipping for free, and he recommended sellers build shipping cost into the price of their products so they don’t have to absorb the full cost of shipping:
“Offering free shipping doesn’t mean you have to pay for it yourself. No delivery service will ship a package for free, but, just like the cost of your materials and other business expenses, it’s a cost you need to consider when setting the price of your item. Our data also shows that Etsy buyers will spend more to have their order shipped free. So, offering a free shipping guarantee could mean you’ll make more per sale, helping to offset your shipping costs.”
However, numerous sellers responding to the survey said it was deceitful and unfair to buyers to build shipping into the price of the product in order to offer “free” shipping.
Etsy will suppress listings that don’t offer its suggested free shipping options, and many sellers said they felt coerced as a result. Sellers used words like extortion and blackmail, and one said it seemed like a “hostage situation.” Some said it was illegal or unethical.
And some readers pointed out that sellers located on the East and West Coasts will be hit hard by the changes due to zone-based pricing, along with international sellers.
One seller said they felt betrayed: “I am completely disgusted. I participated in “Etsy Goes to Washington” in April. There we met members of Congress and lobbied them, educated them on the needs of the microbusiness, and what Congress could do to help. I feel this move is a complete betrayal of the microbusiness model. I feel like after 6 years, I have to start all over again.”
Etsy is making the changes to search at the end of July (and in August outside the US), and in September, it will begin “spreading the word to US buyers that it’s easier than ever to find things that ship free on Etsy.”
It was interesting to see the breakdown of sellers who offered free shipping at the time of the announcement: only one quarter of respondents currently offered free shipping on their Etsy listings, while 75% did not offer free shipping. We asked sellers to tell us why they did or did not offer free shipping on their Etsy listings.
Sellers Who Offer Free Shipping (25% of respondents)
Many sellers who offer free shipping said they did so because they felt coerced by Etsy, which had already been factoring free shipping into search – “I felt I had to after their big push! I need to be seen on the marketplace,” wrote one seller.
“Almost all my items are under 4 oz. so I added $3 to the price to cover postage. Got tired of Etsy nagging about it,” wrote another seller.
Far fewer said they decided to offer free shipping because buyers wanted it. One seller who did wrote, “Buyers have been conditioned there is free shipping, so I include shipping in my pricing.” Another seller wrote, “Always seemed “free shipping” always got better search results. Buyers do not like hunting for total price in body of listing.”
The survey found that many of the sellers who do offer free shipping do so on only a subset of their listings.
Some respondents said offering free shipping helped sales, such as the seller who wrote, “I offer free shipping on all products over $25. I find it has increased my sales. However, my “Free Shipping” cost me $4500 in 2018, which is a significant amount of my profits. I’m lucky that most of my shipments fit in a small padded envelope or small flat rate priority box.”
Other sellers said offering free shipping had had no impact on their sales. “Most of our items are 3-4 oz. so I thought I’d try it out. I know I try to get free shipping if available. I have not found that it has helped sales in any way, however.”
Some representative comments follow:
I offer free shipping on my more expensive items.
I offer free domestic shipping on fine jewelry and some items that weigh under 1lb and are over a certain value because the cost of the items is high enough to absorb the cost. I do not offer it on items where the profit margin is low or the package weighs more than 1lb.
I offer free shipping on some items not all. I find that customers like to see how much the shipping cost is. With free shipping it’s hidden in the cost of the item and the buyer has no idea whether he is overpaying or not.
I offer free shipping because I feel that etsy has coerced me into it.
Free shipping on items under 16 Oz is reasonable. Free on heavy items is not since shipping varies so much depending on destination.
I offer Free Shipping on a $200 (minimum) sale in my supply shop. It’s hard financially to do so, but I do it hoping to stay in a OK place in Etsy search. I lose money doing so, and it does not help that much. I can not mark up my items and stay competitive. I have had to mark many items lower than they should be over the last few yrs – too many large and/ Chinese sellers to compete with.
Was forced to by Etsy to gain notice for shoppers. Would rather not since it cuts into small profits and is not “Free”.
I offer free shipping on small items that when packaged have a total weight of 13 ounces or less and can be mailed via USPS first class. I do not offer free shipping on larger parcels. Slightly over half of what I sell is sent out in small first class packaging with free shipping.
Sellers Who Do NOT Offer Free Shipping (75% of respondents)
Many of the sellers who said they didn’t offer free shipping cited the difference in shipping cost to send packages locally versus far away due to zone-based pricing, saying it wasn’t fair to charge the same price to all customers.
“My local customers should not have to pay higher prices when their shipping costs would be less than those that live farther away,” one seller explained. Another explained the impact on international orders: “To add it into the price shipping Canada to the US would make my price too high to be competitive.”
A lot of sellers felt it was dishonest or deceitful to hike the price of their products and advertise free shipping. “There is no such thing as “FREE” shipping and I don’t believe lying to my customers is moral,” wrote one seller.
Many sellers said their items were very large and expensive to ship – especially now with USPS DIM Weight price changes that took effect last month. “I sell vintage. Shipping can be very costly on larger items, especially with the new dimensional shipping calculations. I can’t eat or imbed that much freight in my items and still hope to sell them.”
Some sellers pointed out that customers who purchased multiple items in a single order would pay more if the shipping was built into the price. One seller wrote, “As a shopper I tend to buy multiple items from dealers who offer a combined shipping discount as opposed to free shipping. And raising my prices to cover the free shipping would cause my prices to be too high.”
Product returns are also a concern, since the seller would have to refund the full price to buyers – including the portion they had allocated to their shipping costs. “I do offer free shipping on most items that will qualify for first class shipping, but heavier items are really difficult to sell when you add shipping to the price. If they want to return an item…I end up having to pay return shipping out of my own pocket plus refunding the initial selling price which had shipping included. Smaller/lighter weight items aren’t as big a concern, so offering free shipping on them is fine.”
One seller summed up some of the concerns with the following:
“There is no thing as “free” shipping. I am not willing to jack up my prices so that they get that illusion. My local customers should not have to pay higher prices when their shipping costs would be less than those that live farther away. My customers who purchases multiple items should not have to pay more because they bought several items with the increased pricing due to trying to recoup “free” shipping costs built in my pricing. I pay shipping fees all the time when I shop online. This is MY business and I feel Etsy has no good reason to dictate how I choose to run it. I have serious doubt that my items will fall very low in the search rankings as my items are unique. Additionally, I drive a lot of my own traffic through social media.”
One seller said they had tried offering free shipping in the past, and “sales went DOWN.”
Some representative comments follow:
I’ve never seen the need to. My default shipping fee is a flat $5, which seems reasonable enough.
My items can be quite large and expensive to ship. It would be impossible to add shipping in as it would make items too expensive and I could potentially charge UK buyers the same as US buyers which would be dishonest.
I sell vintage, all sizes and weights. Since I cannot do all free ship, I do none.
I live in Florida and sell vintage. I have all different sized items which means it’s extremely difficult to estimate shipping costs. Adding the new higher costs the USPS recently instituted would make a good portion of what I sell too expensive even with free shipping. Plus, it’s dishonest. It’s not really free shipping. We are very small business people and can’t compete with Amazon and other free shipping retailers.
My collectible items over 2 pounds can cost from $10 to $50 depending on whether the buyer lives in New York City or LA. Just too difficult to include the high end of the shipping cost into the purchase price.
I sell vintage items (not tiny trinkets that ship for a couple bucks). I only charge pure/actual shipping costs using Etsy shipping calculator. My items are either too bulky or too heavy to ship for free and my customers know that. If postage is added to price; that ALSO means someone living in my same state will pay the same shipping cost as someone clear across the country – and that’s not FAIR to MY customers.
I can’t afford it. I would have to raise my prices and then items would be over-priced and not sell. Customers want cheap prices, period. If they want it, they will pay shipping.
Shipping isn’t ‘free’, and I find the concept to be deceitful. I live on the east coast and sell some larger and heavier items that require a 24x18x18″ box. To ship to a state next to me, it is around $25. To ship to California, it is $102. I find it dishonest to overcharge the person who would get a lesser rate, and it’s bad business for me to eat the cost. This is probably why some retail sites are moving away from always offering ‘free shipping’. West Elm and Chicos come to mind. I offer it on jewelry, since the cost is so minimal, and it is easy to hide. But, I probably wouldn’t offer it on these items either, if Etsy didn’t push it.
Because I like to offer my customers combined shipping if they buy more than one item and there is no such thing as ‘free’ shipping.
The shipping cost variance is too high between say Zone 3 and Zone 8. I would have to increase my prices to cover the costs of a shipment to a high-numbered Zone.
Sellers Weigh in on Etsy’s New Free-Shipping Tool
We asked sellers how they felt about Etsy’s policy to introduce tools that let sellers offer free shipping on orders of $35 or more. A majority (80%) said “bad.” 1.5% said “good,” 13.5% said “neutral,” and 5% said “don’t know.”
Clearly there’s something going on – why would most sellers think the introduction of a tool that gives them greater flexibility if they chose to use it was bad? Sellers said it was because it came with conditions – unless sellers use the tool to offer free shipping on transactions that total a minimum of $35 (or offer free shipping unconditionally), then Etsy will suppress their listings in search results.
It was clear from the comments that many sellers bristled at what they called coercion: “Offering the tools is good. Prioritizing (in search rankings) because you use the tools is not. The good & bad cancel each other out.”
“”Let’s” is not the correct word. Coerce is more appropriate,” wrote another.
But it wasn’t just a matter of principle – many sellers truly believe they are unable to make free shipping work for them financially. “How about Etsy pays for the Free Shipping and you can go Bankrupt instead of me,” wrote one seller. “I feel that Etsy is doing zero to support the sellers. We are Etsy’s customers. This free shipping push cost them NOTHING so they’re riding our backs.”
Another seller said the price threshold was too low: “My free shopping tipping point on other sites is $65,” they wrote.
We found at least one seller who said they would keep an open mind: “I might consider this as a possibility to increase sales,” they wrote.
Some representative comments follow:
It’s terrible that they will not give any search to sellers that can’t afford to offer free shipping due to weights and size factors in the products they sell. Please stay out of our business and offer a fair playing field for everyone.
Etsy shouldn’t be telling its sellers how to run their businesses. They aren’t suffering the consequences of this plan. I’m not going to offer free shipping on my items. Because of this I’m going to be penalized in Search. This could possibly ruin my business on Etsy.
I don’t know what these tools are, whether they are useful for the flat rate shipping I use.
Can u get that shipping money back if a customer wants to return an item for something they just decide they don’t want? Shipping rates vary across the country why would I over charge someone? That makes me as a seller look deceptive.
I sell paintings, cabinets, glass, etc. I can’t set a set shipping price on all my items and my items need to be packed carefully…it’s not like I sell tee shirts.
I think it is fine, I’ve done this in the past and don’t think it is a big deal.
Etsy “tools” never work as intended, and more often than not, are glitchy for months after introduction.
For me it makes no difference, because I have very few items that are under $35.
Doesn’t change anything for people like me who often list free shipping. I was under the understanding that when listing free shipping, it increased the visual of my items. Apparently that’s not so.
I really feel like I’m being pressured into this. It’s gross.
We the seller are getting hit by Etsy, why doesn’t Etsy pay for the shipping.
Etsy have not thought it through and will alienate small businesses. I was thinking about selling from my website, I will definitely be doing that now. I feel Etsy is too greedy they want money for nothing, their website is very rudimentary and they have terrible customer service for sellers.
Since the combined weight and size of the package is unknown until the sale, I have no idea how to include shipping on something like this without losing all my profits.
As a Canadian seller I will get hit two ways…first when I purchase supplies for my products I will pay higher item price and still have to pay shipping cost. As a Canadian seller, my ship costs are already higher than my competition so this will make it even harder to be competitive.
The Crux of Sellers’ Dissatisfaction: Search Manipulation
The next question specifically asked sellers about the section of Etsy’s announcement in which it said it would advantage listings in search results depending on whether the seller offered free shipping.
We asked: “Beginning July 30, 2019, Etsy will give priority placement in US search results to items that ship free and to shops that guarantee US buyers free shipping on orders of $35 or more. How do you feel about that new practice?”
The majority of sellers called it a bad move (89%). 4% said it was good, 6% said it was neutral, and 1% said they didn’t know.
Some sellers pointed out that they pay the same amount of money as sellers who will receive better exposure for their listings. “Sellers are paying a fee for listing items, so Etsy should not be manipulating visibility,” one seller wrote. “Not fair to those of us who pay the same listing fees as those who offer free shipping,” said another.
Some respondents called the policy “one-size-fits-all” that wouldn’t work for all sellers or all types of items.
A number of sellers used the words “blackmail” or “extortion” to describe Etsy’s new approach to “free shipping.”
One seller said the policy has the potential to increase returns: “I sell items that are nearly all under $35, so this forces buyers to add items to their cart that they might not really want, just to reach the $35 threshold. As a seller, I feel this just invites an increase in remorse returns.”
One seller was prepared to exploit the new policy: “More traffic for me until everybody else does free shipping.” But another said, “We aren’t doing it and the shops that do it in our category will lose their shirts in the process and fade away or reverse course quickly – so hopefully it won’t affect us in the long-term – EXCEPT to really, really motivate us further to get our own website up and running PRONTO.”
While the majority of sellers didn’t like it, one seller said, “I feel it will bring more shoppers to Etsy,” and another wrote, “If they really do this, it might work. Something to think about.”
Some representative comments follow:
This works for me, I really don’t think it will do that much.
It’s paramount to extortion! If they want to dictate to sellers about free shipping, than Etsy needs to pay for it, not tell sellers to (try to) deceive their customers by hiding the shipping costs. Buyers aren’t stupid – but Etsy constantly shows that they (Etsy) thinks they (buyers) are!
And who has to pay the return shipping if the buyer returns the item. If it was sent free shipping then the seller is out of pocket again. Why all the fuss now? Why not just increase placement for sellers who offer free ship now?
This is extortion, this means I will not pay Etsy for Pattern, dropping it and my 2.00 a day cut it no more spending money with Etsy
It is dishonest, some buyers will in effect be charged too much.
This will result in fewer sales for my items.
I am forced to offer free shipping or not be found in searches.
One price / policy cannot fit all scenarios.
If not, my items appear more expensive because of rolling shipping into the price.
Etsy is committing fraud by giving better (or worse) “placement” in search results when all sellers on Etsy pay the same listing price. Etsy cannot legally – as a “venue” – arbitrarily decide whose business they are going to ruin due to what business decisions are made by that business that has an agreement with Etsy to pay them to use their venue upon which to house their personal business. Especially when Etsy stands to profit greatly from having shipping costs (because shipping isn’t “free”) rolled into the cost of an item, thus driving up their “Final Value Fees”. This change has nothing to do with pleasing buyers nor sellers, Etsy doesn’t care about either, it is simply another money grab by Etsy, so they can falsify actual Gross Market Value reports for stock holders. Etsy needs to have charges and/or a lawsuit for fraud brought against them.
It will require sellers to raise their prices to ridiculous amounts in order to be able to ship items from outside the US, and also for US sellers to ship large/heavy items across country. That will penalize many local buyers, and many sellers.
This will really hurt many sellers, it could put many out of business. Etsy needs to stay out of our shops. We pay to sell on Etsy, we are their customers and all deserve a fair place in search. Giving Priority to some who do what Etsy wants them to do, when is impossible for many to do is just out and out wrong. I don’t think this will work well for Etsy. I think for many sellers this will be the straw that breaks the camels back! Many sellers are outraged, myself included.
If I were a seller of smaller and/or lightweight items (e.g., clothing, jewelry), I speculate my perspective might be different. But I’m a seller of vintage items, and as such believe that, once again, Etsy’s corporate, cookie cutter perspective has proven to be short sighted. I’ve long contended that shoppers are not so much expecting “free” shipping, as they by now surely know those costs are largely rolled into the price. I believe what shoppers DO want is the ability to see – up front – what their bottom-line investment most likely will be. Adding a $15 item to their shopping cart, only to then see $12 shipping, $2 tax, and $1.50 handling fee later added on makes for a very different financial commitment. Forcing shop owners to build shipping costs into the item price means a coastal shop owner must over-inflate price in anticipation of a possible coast-to-coast transaction, leaving them looking less competitive to, say, a Midwest competitor. With shipping costs on the rise, and many items larger than a cubic foot once safely packed, Etsy’s hell-bent need for “free shipping,” and the added insult of priority placement, is FAR from understanding or aiding many of its customers – the shop owners, including vintage shop owners like me.
I think you already have to wade through too many irrelevant listings when you search. Then throw in the sponsored ads to make matters worse. This could come back to bite them. Sponsored ads are fine in the relevancy sort, but when I search by price – I expect to see some logical order.
If we all pay the same fees, we should all have equal visibility.
Hiding my listings will only continue the downward spiral of my Etsy sales.
I think if they want to push free shipping, then they should have to pay for these shipping labels! In addition to paying 5% plus their payment transaction fees, I had to now pay $3 for my “free shipping” order to send it to the customer. I cannot afford this!!
So they only want to sell cheap lightweight items?!
It is a form of coercion to make sellers offer free shipping by threatening a lower placement. The listing and transaction fees are the same whether you offer it or not. And buyers won’t always see what they may want by relevance, but rather what Etsy wants them to see.
When I offered free shipping on everything, my sales did not increase, my place in search did not improve.
Etsy is already manipulating search and have been for a few years now. They manipulate it to the advantage of themselves, rather than advantage for the buyers or sellers.
Terrible change and makes me want to leave. I AM NOT offering free shipping and now my listings will not be seen. So why be on Etsy??
I feel that adding the shipping cost to the item price is misleading customers. Shipping is never free! For me it is an ethical dilemma. Feels like I’m lying and being deceitful.
If I am forced to offer free shipping against my will, I will start looking for another place to sell my items. At this point I am satisfied with how much and how I sell. If Etsy wants to penalize me for not offering free shipping, I will leave. I make (product redacted by editor to ensure anonymity), which only one other person does, so I don’t have a problem with advertising or selling all over the world. If Etsy wants my business, then they have to let me run it!!!
So I pay the same fee as everyone else, pay the same commission AND no one sees my listings, sounds like a really bad idea.
This is pure and simple blackmail. There is no such thing as ‘free’ shipping and why should European buyers have to pay higher prices because of hidden postage costs to the USA. The cost of overseas postage is high and if it had to be included in the buying price the items would be priced out of the U.K. market.
Obviously Free Shipping is the most important criteria for the placement. Etsy search is already nearly worthless due to the paucity of listing categories.
I pay the same fees as those who may offer free shipping but I am not getting the same benefits. And it’s a lie to say it’s “free.” I think this falls under consumer fraud.
Add to that the policy changes for the U.S. Postal service and regional costs, and large bulky items, and ETSY is forcing sellers to comply to a disaster.
This is extortion. This should be illegal in the online world of selling via marketplaces who have NOTHING to do with how a business ships its products. Only the buyer is involved in the cost of shipping, along with the seller. Fair shipping is NEVER an issue for any normal buyers who shop in specialty locations like Etsy.
As a result of this action by Etsy I have put my shop on vacation and most likely will not reopen.
Unfair to other countries, ethically wrong to mislead consumers about item pricing, has potential to falsely inflate prices all over due to perception that item price is the standard price.
Where did they come up with $35? If I sign on, everything in my shop will ship free & I have to pay for that.
I’m in France but a large percentage of my customers are in the US, presumably I won’t be offered the option to take part & will lose visibility.
This is not Amazon where people PAY for a prime membership that subsidizes some of the shipping charges. It’s insane, shipping charges are outrageous now & they want great pricing on items plus free shipping. On small things like jewelry, you can raise your price & still make it work but not for anything else. I will probably stop selling on Etsy. Why bother if my items will be buried in search.
Just another maneuver to get sellers to pay for search ads.
I will leave Etsy as a result.
Unfair to sellers AND buyers outside the US, they are paying way more than they should. All sellers pay the same fees and should be treated equal. There is already an option to select free shipping if a buyer so chooses, there is no need to favor sellers who offer free shipping, Etsy could promote that instead of forcing sellers into shipping included.
They are trying to compete with AMAZON (Like everyone else) They should try to be ETSY instead.
Sellers have been “low balling” price and inflating shipping for a while to get better search placement.
I am considering leaving Etsy.
How Sellers Will Adapt to the Changes
We asked sellers, “When this new policy takes effect, you will,…” and asked them to select one of the following options (shown with the results):
Make no changes (36%)
List more on Etsy (2%)
List less on Etsy (25%)
Stop listing on Etsy (13%)
Don’t know (24%)
We also asked sellers, “Etsy will begin actively marketing the free-shipping initiative to buyers in September. Do you agree with Etsy that this will drive more traffic to the Etsy marketplace and sellers’ shops?” 59% said no, 9% said yes, and 32% said “don’t know.”
Finally, we asked sellers, “Do you feel that Etsy’s free-shipping initiative was based on the wants/needs of their sellers?” 1% said yes, 96% said no, and 3% said “don’t know.”
You can comment on the Etsy policy change and the survey results on the AuctionBytes Blog.