AuctionBytes Blog
Covering auctions, collectibles and marketplace selling.

AuctionBytes Blog The AuctionBytes Blog has been giving a voice to online merchants since its launch in 2005. Named one of the world's top 30 blogs in 2008 by "Blogging Heroes." Weigh in with your thoughts on the joys and pitfalls of selling online.
Thu Nov 8 2018 23:22:29

Etsy Move to New Billing Proves Painful for Sellers

By: Ina Steiner

Sponsored Link

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.

Update: An Etsy spokesperson explained to EcommerceBytes, "When a seller transitions to the new Payment account, we combine their outstanding bill balance with the balance they had available for deposit (earned from their sales). If a seller makes a deposit to their bank account before their transition to the new Payment account, the deposit amount is also deducted from the balance." Etsy updated the article to make the example clearer.

Comments (52) | Leave Comment | Permalink
Readers Comments

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

by: joker13 This user has validated their user name.

Mon Nov 12 07:13:53 2018

I jumped off the Etsy train at the end of May'17 when they forced Etsy payments on everyone. That was the enlightenment for me when I saw this coming. When the greed takes over better run for the exit

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

by: calamtykel This user has validated their user name.

Mon Nov 12 09:27:03 2018

The whole system is sloppy.  What I really hate is that you can no longer even see how much is in your shop payment account.  You can only see what is available for deposit.  So there is no longer a separate number at the top for your total amount.  It seems like a ton of smoke and mirrors and confusion.
I'm okay with change and I can roll with change.  We got forced into Etsy payments.  I had to go open a bank account for that.  Fine.  I dealt with it.  Now we are forced into paying everything up front.  I really don't mind that too much IF we had the option to pay in advance or pay another way!  What happened to being able to use Paypal or a credit card?  I always used Etsy shipping labels but I Think I'm going to look elsewhere for shipping now.   It is unreal that they rolled this out right at high holiday shopping season.  Small sellers have families to buy gifts for - making all our funds due and sucking them out of every sale is ridiculous- it's taken me 10 new sales just to get to zero balance!  Now today when I go to print my labels, there goes the new balance I have.   I understand that I owe it, but does Etsy understand that they changed the rules of the game without warning?    

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

by: AuntyQ This user has validated their user name.

Mon Nov 12 09:33:01 2018

Not at all happy about the changes.  I did not receive any type of notification from Etsy, and wondered where my Monday deposit was.  Surprise!  It went to pay Etsy fees.

I have always kept a separate card JUST to pay fees and business expenses at Etsy and eBay ... I would like to have the option to continue with this, as we can at eBay.

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

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

Mon Nov 12 11:46:45 2018

JUST NOW : Etsy has taken a FULL 8% from my grand total sale.
This is UNaccceptable.

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

by: JoeysZoo This user has validated their user name.

Mon Nov 12 11:46:57 2018

Well lucky for me, I guess, that I paid my fees weekly out of my funds before the deposit.  I didn't see much impact.  I must be the only one that actually LIKES having my fees and label cost deducted from the sales.  Just deposit my net and I don't have to worry about making a manual payment every week.  

It sounds like some are confused by Etsy's example--The seller started out owing $40, then there was some math, and the seller ended up owing $40.  No sleight of hand by Etsy.  Although I do agree it was very shitty to take away the grace period with no notice.  If I was not up to date on my fees already, this would have really hurt and it's a bad time of year for that.  

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

by: treasurehunter777 This user has validated their user name.

Mon Nov 12 12:03:59 2018

My sales have plummeted. Worst sales ever. I also will be looking into other venues.  

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

by: RealHandmadeGal This user has validated their user name.

Mon Nov 12 12:08:43 2018

Non-US shops are being overcharged on their fees and their VAT amounts are incorrect. To make matters worse, Etsy has for some unknown reason changed bookkeeping information in seller’s accounts, altering figures back several months. Taxes are often paid throughout the year, not all at year’s end and changing information that has already been reported by a business owner is insane. Some EU/British sellers have reported Etsy to the appropriate gov’t departments.

https://www.etsy.com/teams/7722/discussions/discus
s/18878567/page/13

Some
U.S. sellers are also reporting to the New York Attorney Generals’ office. Etsy Admin deleted a post where a member shared contact information for this AG office. Totally unnecessary to remove that post as the information is readily available online. https://www.etsy.com/teams/7722/discussions/discuss/18877493/page/54R>
In
a “look at this don’t look at that,” move Etsy just released a couple of TV spots, an advertising move that should have been done years ago when the site had less mass-produced factory garbage. These ads would have excited me about three years ago, but are meaningless now.

To hard-working Etsy sellers of true handmade items, sellers of authentic vintage items and sellers of craft supplies - get your own website. Building a site with one of the many available hosts is easier than ever - just as easy as listing on Etsy. You will have to drive traffic there, but that is also easier than ever with Instagram, Pinterest and other social media outlets. You may think you are getting built-in traffic on Etsy, but you are actually lost in a sea of crap. If you’re paying for Promoted Listings, put that advertising money elsewhere.

Etsy has been a sinking ship for years. Protect yourself, your income and the good name of your business. Put your eggs in more than one basket now.

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

by: JohnGermaine This user has validated their user name.

Mon Nov 12 12:48:12 2018

I am so glad that I print out everything!  Whomever they hired to create this bookkeeping nightmare needs to be fired with EXTREME prejudice!  Geeze Louise!  C'mon.

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

by: SammyCat This user has validated their user name.

Mon Nov 12 16:35:39 2018

Of course, for shops outside of the US its an easy thing to abuse since no one knows what rates Etsy is using to convert from CAD to US and back to CAD.  What I do know is that their rate is higher than xe.com which is what I use to calculate conversion.

I have had to convert to pay my US $ bill to Canadian to deposit to cover my bill.  It was $11.00 more than a trusted site.

They are functioning as a bank without any accountability whatsoever.

I think everyone, every month needs to call them to find out what their rates are to make sure that fees are correct.

Outrageous to be stealing from shipping and now this.

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.

Mon Nov 12 17:50:53 2018

We took down all our listings, no choice, don't have the time to sort out this absolute accounting mess ,

esty has not responded to at least 9 of my requests for answers, they most likely don't care, they take their money, and it's accounted, for, so who cares about you is what they are basically saying,

A big congrats to the assholes, running etsy, you have truly transformed it into a disgraceful piece of shit company in record time,

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

by: mysticmoons This user has validated their user name.
Web Site

Mon Nov 12 18:51:59 2018

First a little background about me and my shop. I have been on Etsy since 2008 had 3 stores and 10 years into it and 65,000 sales (combined shops) I have been really unhappy with etsy for the last year and this new "simplified" billing pushed me over the edge. I could care less about Etsy taking 10% of my sales and I could care less if they take the money up front. My issues are with the way it was handled and how "NOT Simplified" this system is for me personally. It is designed for the weekend seller who maybe makes a few sales a month, doesn't want to do any bookkeeping and trusts Etsy to charge them the proper fees. For the business owner this system is complete crap. It is impossible to balance and keep books on!! On top of that the new system severely restricts the business owners ability to run their business. If the payment has been deposited to your account and you need to write a refund it's an issue. There are several things that create a big mess that should be simple to deal with! I have other venues and I don't have HALF the headaches I have at Etsy and OMG Etsy is a total time suck as it is without adding all they have added in the last couple months!  

Second Sales Tax is an issue. The threshold for most online sellers is 10,000 in most states. If you sell under 10,000 in a state you do NOT have to charge or file sales tax. That right there represents more than half the people on Etsy and they are all having to collect and pay sales tax. We file our own Sales Tax, Etsy putting their two cents into it makes it that much more complicated for myself and my CPA.

Or how about when you have a sale they are deducting their portion from the original price NOT the sale price.

How about the massive discrepancies in their paid for advertising?  

There are more reasons but Etsy keeps doing things that are supposed to make it EASIER for people to run their business there and its doing everything but make it easier!

My final point is the treatment of the sellers. Etsy's communication skills are the worst I have never encountered in a selling venue and that is saying a LOT. No Notice that the roll outs would start, prior to rolling out they should have sent notice of the new fees and what to expect when they switched it over. They didn't do any of that and they haven't addressed the thousands of issues that have been posted in the forums. They have double billed, they aren't correct on sales tax or VAT charges and now I find out that you have to ask them to continue to charge and file sales tax on your behalf, NO NOTIFICATION to any seller on this either! To make matters worse they are not responding to anyone in the forums about these issues, they have not posted anything stating there is an issue with this but we are working on it, nothing! and NOW they are rolling out their BETA Premium Support package that allows customers to actually contact them with their problems for a FEE!

Horrible company, tons of issues and I for one and not playing! Etsy used to be a great place to do business and it isn't anymore and I attribute that solely to Josh Silverman!

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

by: fusgeyer This user has validated their user name.
Web Site

Mon Nov 12 19:10:25 2018

I have been moved over. I think that this new system is going to be an eye opener for a lot of sellers. It works like this. Etsy collects the fee for the sale, for the processing of the payment, for the actual amount of the shipping label, and the relisting fee if the item auto renews. Etsy will also deduct any outstanding fee for new listings and for promotions at each sale. If you have your Etsy payment account separate from PayPal you will see more in your PayPal account because Etsy does not deduct the new fees from that, they cannot.

Etsy is only collecting all outstanding fees at each sale if they can. For small sellers who are used to paying the fees at the beginning of each month, this is an adjustment. Many sellers are going to realize that they are not making money. Those listing fees add up quickly if you are renewing, listing and relisting a lot of items each week.

I took a look at my statement. It was actually lower than expected. I looked at all of the Etsy fees. It seemed correct to me. Nothing out of order. It is on the seller to be dilligent as to knowing what the cost of doing business is.

For now, I am staying with Etsy.

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

by: SammyCat This user has validated their user name.

Mon Nov 12 19:15:24 2018

As a Canadian seller, I would like some advice on how to calculate Etsy fees to make sure that I am being charged the correct amount.

We don't know what exchange rate they're using to convert CAD to US and then back to CAD.

Does any have a formula of figuring this out?  

I totally agree with EVERYTHING that @MysticMoons has said.

Its a debacle all around.

FIX THE DAMN SEARCH ... that should be key.

Now lower shipping shows higher ... WHAT ABOUT SHOPS OUTSIDE THE U.S.????

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

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

Mon Nov 12 23:20:27 2018

THEY JUST DID IT AGAIN ! ! !
In the mix with the deductions is a "Shipping Fee".
I NEVER use their labels, so what the HELL are they doing taking MY money for a shipping fee ? ? ?
And they hit me TWICE > A "Sale Fee" and a "Transaction Fee".
WHAT THE HELL ! ! ! !
So they robbed me of DOUBLE DIGITS on ONE sale ! !
I'm gonna shred somebody's junk over this ! !  

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

by: BargainzBabylon This user has validated their user name.

Tue Nov 13 00:33:05 2018

@the end - Etsy levied a 5% FVF on shipping itself, similar to eBay. It has nothing to do with where you ship, it's the shipping you (and me and all of us) charge. This was announced months ago very clearly.  

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

by: Sierra This user has validated their user name.

Tue Nov 13 01:43:13 2018

@MysticMoons - U.S. sellers in states with sales tax need to collect & remit sales tax IN THEIR STATE. Etsy collects & remits sales tax in a handful of states which require marketplaces to do so (they should be doing this for New Jersey as of 11/1/2018 however, as of yesterday, they still weren't doing this). For the other states, that's where economic nexus is the rule; thresholds vary by state, but MOST Etsy sellers won't need to worry about it.

@TheEnd - The "shipping fee" to which you refer has been charged since JULY. That's when Etsy raised their fee to 5% (from 3.5%) AND started charging the 5% on the shipping amount PAID BY THE CUSTOMER. This fee has NOTHING to do with where you buy your postage or shipping label. It's like eBay with a lower rate; Etsy now charges 5% on item price + shipping (on eBay it's 10%). Same thing, lower rate.  

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

by: Sierra This user has validated their user name.

Tue Nov 13 01:46:50 2018

Since Etsy changed my shop over to the new royally messed up payment account system, I've only received ONE deposit. And they screwed that one up equally royally! When Etsy deposited the amount they said they did (verified with my bank), they ALSO added an equal amount to what I *owe* them so they've stolen it back! Several (possibly MANY) other sellers have noticed this too.

Ina, this would be worth investigating!!! I have a screenshot I would be happy to share with you.  

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

by: Sierra This user has validated their user name.

Tue Nov 13 01:47:59 2018

I have turned off Promoted Listings and have started buying my shipping labels on other sites (PayPal or PirateShip) where I can pay for them as I go.  

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

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

Tue Nov 13 02:13:34 2018

Listen : ETSY IS NOT ENTITLED TO ANY PORTION OF THE SHIPPING.
You are all DRONES.
Stop It.

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

by: Sierra This user has validated their user name.

Tue Nov 13 09:36:13 2018

@TheEnd -  I agree. I was just trying to explain what that fee was about.  

Click to view more comments
1 2 3  [Next Page]


Login is required to post comments.
To sign in to leave a comment using your AB Verify User Name, fill in the form below. If you have not yet signed up for AB Verify, or if you'd like more information, go to the Registration Page
.

Login for AB Verify
Be sure and use your email address and password to log in.

 
Email:
Password:
 
 Forgot Your Password?
 Even though you are signed in with the AuctionBytes Blog, you will have to sign in to the EcommerceBytes blog. But you can sign in with your existing AB Verify info.