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Thu Nov 8 2018 23:22:29

Etsy Move to New Billing Proves Painful for Sellers

By: Ina Steiner

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Etsy transitioned another batch of sellers to its new billing system on November 8th, and it's still proving painful for sellers. The changes impact sellers' cash flow in a big way and many say they don't understand how Etsy is billing, withdrawing funds, and determining when balances are "past due." They're also concerned about reconciling their accounts for tax purposes under the new system.

Despite the fact many of the sellers who were moved to the system last month didn't understand the new system, as we documented at the time, Etsy transitioned another batch of sellers to the system on Thursday resulting in the same confusion.

Etsy made an announcement in the forums today announcing it would hold a session to answer seller questions - an excerpt of the announcement follows:

>>>
As you may know, we redesigned your shop finances so you can manage your finances in one place. We combined your Etsy bill and Payment account and will automatically deduct your fees from your Etsy Payment sales. This new experience will be available to all sellers soon!

You can read more about the updates here: help.etsy.com/hc/articles/360002065387

Additionally, the team who worked on this redesign will be here next week to answer some of your questions.

Post your questions here in this thread and/or vote for the questions you'd like to see answered. 
<<<

Etsy will answer the questions next week (Thursday, November 15) - a long time for those suffering the consequences of the change.

In the help file Etsy pointed to in today's announcement is a FAQ that includes an example that I think will *explain* the biggest concern sellers have, though not necessarily *lessen* seller concerns:

>>>
Why do past deposits decrease my Current balance?
In the past, the sales funds you could deposit were your total funds from a sale minus payment processing fees. Other fees and taxes, such as transaction fees or listing fees, were not deducted directly from these sales.

In the new payment account, all fees, including transaction fees, listing fees, and shipping labels, are deducted directly from your sales funds. Since these fees weren't deducted from your past deposits, the fees that would have been deducted from your sales in the past month are now counted against your current balance.

For example: You made $30 in sales in October, minus payment processing fees. You also accrued $40 of fees in October.

In the old payment account, you could deposit all $30 of your Etsy Payments sales. You would also owe $40 on your Etsy bill.

In the new Payment account, the $40 in fees will appear as deducted from your $30 in sales. This results in a -$10 line item for fees and your deposit line item deducts $30 from the balance leaving a Current balance of -$40, or the previous Etsy bill balance.
<<<

(Sellers impacted today probably need to substitute "November" for "October" in that example.)

While that may sound perfectly reasonable to all the employees at Etsy who receive a steady paycheck and benefits, the change can be devastating to self-employed micro sellers who do not, and who must pay for supplies and inventory upfront before making sales. $30 cash in hand now and owing $40 next week is a lot different than Zero in hand now and owing $10 now.

(Scratch that - according to the example above, the seller would owe $40 now; we don't even understand how that's so.)

An excerpt from a post by a seller impacted by today's changes may help explain the dilemma some are facing: 

"Since "Due By November 15th" still shows in my Payment account, I took that to mean, due by ... So I had time to make my payments whilst still being paid for the orders placed. 

"Imagine how I felt knowing I had approx $78 in new earnings, money I needed, absorbed in one fierce snatch to pay towards my bill by Etsy without so much as a heads up so I could prepare, plan and shuffle. Every order since, fees amounting, no earnings, all going towards my balance.

"True I owe Etsy that I'm not denying - however, as said "due by" in my understanding of English, does not define as "I'm taking your money now and will continue to do so" leaving you w/o a penny. There is no other money but what I earn here. So every new order, I am w/o earnings, and fees keep adding to the bill and the wheel goes around and around and around."

Ironically, Etsy CEO Josh Silverman posted the results of a study the company commissioned to measure the economic impact of Etsy sellers, which found that "income from creative microbusinesses can have a significant impact on individuals and families."

One would hope Etsy would start answering sellers' questions on Friday and continue straight through the weekend rather than leaving sellers hanging for an entire week.

Comments (44) | Leave Comment | Permalink
Readers Comments

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This user has validated their user name. by: The End

Fri Nov 9 02:50:21 2018

It's just HORRIBLE.
I used to be able to see my separate expenses on my charge card statement.
Now it's buried.
I probably shouldn't stay on Etsy.
I have my own website that's doing pretty good.
Plus, if I close my Etsy store, the search engine will drive traffic directly to my store so I'll do even better....

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This user has validated their user name. by: Rexford

Fri Nov 9 06:10:09 2018

I may leave Etsy as well.  They screwed up things just like eBay has.  Sales have plummeted and did so almost overnight.  My guess is that it is related to an algorithm tjat they manipulated.  I have no time for that.  I have no time for "hide the listings" algorithms.  I will only sell on sites where search is not manipulated.  Buyers need to find what they are looking for.

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by: Snapped This user has validated their user name.

Fri Nov 9 07:34:34 2018

One might conclude ETSY has no comprehension of the concept of cashflow management.  Then again, it would only be their cashflow they'd be concerned about.

eBay is certain to be watching incidentally.  Hope any of the poor souls still trying to eek a living from that swamp can prepare.  

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This user has validated their user name. by: Rexford

Fri Nov 9 10:14:58 2018

"Then again, it would only be their cashflow they'd be concerned about."

Bingo.  Yet another ecommerce web site that doesn't listen to their customers.

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This user has validated their user name. by: iheartjacksparrow

Fri Nov 9 13:22:02 2018

I'm so glad I didn't sell on Etsy for very long. Make that list on Etsy for very long as I didn't sell a thing there. Reading over that explanation above makes my head hurt. I admit I'm not a math wiz, but how do you have $40 in fees, sell $30 of merchandise, and owe $40? I can see why Etsy sellers are confused about what's going on.

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by: maxmad This user has validated their user name.

Fri Nov 9 13:57:48 2018


looks more like we will also have no choice to terminate etsy,

a few weeks ago we had a crazy potential buyer ask questions about an item, things like your prices are too high, i want them for half off, what makes your item so special, etc,

if it were ebay this guy would be blocked instantly , but no block on etsy

Sure enough,the guy buys the items weeks later, not remembering the crazy email user id, we ship.

Like clockwork, we get a one star negative review, and about a page long description of how shit we are and our crappy expensive items are

I have asked etsy to remove it, no response yet

Now with this new insane accounting , I think i'm finished with etsy, no big deal, was only a couple of thousand in sales a month,

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by: maxmad This user has validated their user name.

Fri Nov 9 14:26:47 2018

also, 90% of the etsy traffic we get is all coming from google, so it's very simple to get rid of etsy, and simply run more google product ads ourselves,

The lights are very dim in our last remaining etsy shop, soon be turned off forever

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by: Flying Childers This user has validated their user name.

Fri Nov 9 18:03:28 2018

With Etsy it's always one step forward and three steps back.  The only good thing they've done in recent days is their new advertising campaign.  However, any hope that I have that it will help turn things around has already been dashed by subsequent developments, especially the new payment system.   The search and algorithms are still so FU that nobody can find my items anyway.  No matter how much I pay for their promoted listings and other marketing offers.  Nothing seems to work.   Now am seriously looking to add another platform.  No way can I keep all my eggs in this one basket.

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by: maxmad This user has validated their user name.

Fri Nov 9 18:30:52 2018

Etsy Grows GMS 20% in Third Quarter 2018


.........by charging a fee for sellers shipping cost

FAKE FRAUDULENT INCREASE IN REVENUE, STOLEN FROM SELLERS NOTHING MORE

Perminate Link for Etsy Move to New Billing Proves Painful for Sellers   Etsy Move to New Billing Proves Painful for Sellers

by: NT This user has validated their user name.

Sat Nov 10 01:31:27 2018

Sellers like me who have made to order items should just pack up and move on. I am purchasing labels now for orders placed 2-4 weeks prior, so this is what I am asking on the Etsy forum:

Question: I make 6 labels for my orders, each around $50. I see -$300. in my payment account. I get a sale for $300. After fees, I see -$30. in my payment account. When do I get to buy my supplies, pay my rent, or feed my kids?

This set up means I won't do anything but pay Etsy, doesn't it? We don't need folks to come to this site to explain how self-serving billing practices work, because I get the feeling every shop owner impacted already knows.

I will "experience" this every time I print a label, as many of my labels can be upwards of $70. each. So how is this some great thing that you rolled out to make selling on Etsy easier? I had 2 sales in 2 days totalling over $700. and my deposit was $102.44 yesterday. I created a label today and I'm back to -$48. I have to print 3 more labels this weekend, so guess what happens when I get another sale? "Sorry kids, looks like the folks at Etsy are eating your dinner."

Is that what this system was designed to do?

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by: wilburnet This user has validated their user name.

Sat Nov 10 03:36:06 2018

I haven't moved over yet but will soon and even though the above scenario is confusing I do understand the method.
I'm paying my balance day to day so when I do changeover it won't be as bad.

Perminate Link for Etsy Move to New Billing Proves Painful for Sellers   Etsy Move to New Billing Proves Painful for Sellers

by: maxmad This user has validated their user name.

Sat Nov 10 04:17:30 2018

This is an example of how STUPID this company is,,,,,,,,,,,,,,,,


We ended all our listings yesterday and decided to close our shop at etsy, we still ow them money in fees, etsy will not allow anyone to close shop until all is paid, sure makes perfect sense, the problem is now with this backwards accounting there is ABSOLUTELY NO WAY to pay the final bill without a new sale.

And there will be no new sales, because we have nothing listed anymore

Goodbye etsy, give us a call when you get released from the mental hospital

Perminate Link for Etsy Move to New Billing Proves Painful for Sellers   Etsy Move to New Billing Proves Painful for Sellers

by: Maranta This user has validated their user name.

Sat Nov 10 05:05:21 2018

Non-US sellers are finding small discrepancies in how much they are being charged, often 5.2% on transactions instead of the announced 5%.  Etsy hasn't been very forthcoming about how they intend to fix this, which they admitted was a bug.  They don't seem to respect sellers enough to communicate with them properly.

Etsy always behaves like its sellers are replaceable, so it doesn't care what they think.  How many businesses constantly throw away their own customers?  It can cost 5x more to attract new customers than to keep old ones.  Don't they know that?

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by: BlueDenim This user has validated their user name.

Sat Nov 10 08:37:28 2018

The timing of this release could not be worse.  It is the busiest time of the year and when we really need our funds the most. I should be focusing on stocking, selling and getting orders out the door.  Instead, I spent two days sorting through a cluster-fudge of finances. Realizing it will be a while before I see a deposit.

I did turn off my promoted listings as well to stop occurring more fees.

The hardest part is you can not get through the phones lines to Etsy, this has been going on for over a week now.  If you e-mail them with questions, they will send you an automated response. The bug forums are lit up like a Christmas tree and again, no response.

We have a new payment system we don't understand fully and no help. I've always been a fan of Etsy, but this latest change has really dimmed my Christmas spirit.
 

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by: HappyOne This user has validated their user name.

Sat Nov 10 20:01:54 2018

This “pay as you go” Etsy fee plan may wake some sellers up to how little they are really making after fees and shipping. During my first month on Etsy getting a lump sum payment seemed good until my charge card came in with the FVF and shipping costs. Etsy is doing this to save the Credit Card fees they had to pay on the monthly payments and sellers leaving without paying.

Perminate Link for Etsy Move to New Billing Proves Painful for Sellers   Etsy Move to New Billing Proves Painful for Sellers

by: maxmad This user has validated their user name.

Sat Nov 10 20:45:35 2018

No valid response from etsy all day today, just canned scripted answers, and closing my requests, nothing of any use, they obviously must have made a grave error in rolling this out without thinking it all thru or at all, I guess the greed made them blind

We cannot Close our account , because we ow money and we can't pay our bill because there's now NO Way to pay, unless it comes from a sale, and we have nothing for sale.

oh well screw it, I'm done chasing them for a way to pay my bill, it couldn't get more ridicules,

time to replace all our etsy logo's and text with some of the most vulgar known to mankind, they can close it down for me

Perminate Link for Etsy Move to New Billing Proves Painful for Sellers   Etsy Move to New Billing Proves Painful for Sellers

by: pace306 This user has validated their user name.

Sun Nov 11 14:20:26 2018

Because eBay and Etsy (I dont sell there but my wife does) have run clear out of ideas on how to GROW the business, they resort to tricks to make it LOOK LIKE things are increasing - when they arent.

Etsy must be burning through cash like theres no tomorrow - as is eBay - both trying to keep their crooked platforms afloat.

Esty (but not so much eBay - but you can bet its comming) doesnt want to wait 30 days to get paid  - they  want/need the money NOW - and so thats what they are doing.

Esty (for the most part) is small sellers who work "hand to mouth", they probably DONT get 30 day terms (since they make stuff themselves), they dont have large shipping accounts - their needs are different then mega sellers on Amazon (who can afford to get paid 1x every 30 days.)

Another case of management not understanding/caring about their sellers.

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by: Silver Ice King This user has validated their user name.

Mon Nov 12 01:12:04 2018

This move sounds more and more like a company having cash flow problems that has found a way to try and improve it, at least temporarily.  The next move will either be layoffs or another fee increase as they obviously cannot seem to get their spending under control fast enough and still show the growth that the shareholders are now expecting.  

Before they hired the new CEO critics had raved about how Etsy had avoided all the pitfalls that Ebay continued to have, but after hiring this Ex-Ebay employee as the new CEO they are following right down the same path of alienating their sellers over and over as they suddenly need more and more revenue to survive.  It won't be long until the doors are wide open to sell anything on this site as they become desperate for the growth and will find they have chased off the sellers that made them what they currently are.  Just as Ebay has done, but even faster.

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by: Disgusted This user has validated their user name.

Mon Nov 12 04:44:00 2018

It is all about the money.  The stock prices jumped up last week when they started this.  Wonder what trick they will tell wall street in 6 months.  Come up with another trick? ebay playbook.
I also dropped promoted listings and very careful about new listings. Etsy just lost more than they gained.  BUT they just needed a temp fix.

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by: hawk This user has validated their user name.

Mon Nov 12 06:20:36 2018

when the greed sets in , they all forget who made them in the first place.

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