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Sun May 8 2022 09:48:58

Etsy Briefs Wall Street on Recent Seller Protest

By: Ina Steiner

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Etsy told Wall Street analysts on Wednesday that the recent seller strike did not have a material impact on sales. Etsy's Chief Financial Officer (CFO) Rachel Glaser said that when the fee change went into effect last month, fewer than 1% of sellers went into "temporary vacation mode," which was sellers' way of protesting not only the fee hike from 5% to 6.5%, but other policies as well, including the mandatory provision of the Offsite Ad Program.

Glaser said active listings dipped less than 1% during the week of the "strike" - a term she studiously avoided - and returned to the prior level when the week was over. 

"Based on past experience and significant research leading up to the change, this was all within our expectations," she said. 

"The overall impact to our GMS for the week was not material, and seller churn remains at normal levels."

In February, Etsy announced a fee increase and outlined how it would use the revenue increase to improve conditions for sellers.

Many sellers reacted by signing a petition calling on Etsy to take the following five actions:

1) Cancel the fee increase
2) Crack down on Resellers
3) "Golden" Support Tickets
4) End the Star Seller program
5) Let All sellers opt out of Offsite Ads

Glaser framed the issue as a fee protest, despite the other actions sellers were calling for. 

In her remarks, Glaser said Etsy needed to grow the number of buyers - "with more sellers on the platform than ever, we need to continue to grow the size of the pie." 

But she made it clear the increase in marketing costs was coming from sellers' pocketbook.

In March, Etsy increased its marketing activities in anticipation of the fee increase going into effect on April 11, according to the CFO. "And now that the price increase has been effectuated, we're able to spend more on the performance marketing," she said.

Glaser also revealed that sellers subsidize 40% of everything Etsy spends on marketing directly through its controversial Offsite Ad program. She characterized the program not as a higher "take rate," but as a "success-based model." 

"So the sellers only pay that additional fee if they've had a successful sale. That subsidy we get is not seen in the marketing expense line, it's seen obviously in the revenue line. So that is another factor that sort of offsets our marketing spend and allows us to spend robustly where we go."

Sellers explained their objections to Offsite Ads in their petition:

"Offsite Ads pushes Etsy's advertising costs onto their sellers, by charging us an additional 12-15% fee for each item sold through the Offsite Ads program. A 15% fee is charged to sellers who have never earned more than $10,000 in a year, and these sellers are allowed to opt out of the program. Other sellers pay 12%, and are never allowed to opt out.

"Thanks to Offsite Ads, Etsy fees are an unpredictable expense that can take more than 20% of each transaction. We have no control over how these ads are administered, or how much of our money is spent."

It's worth noting that sellers pay higher fees to Etsy every time shipping costs rise, since it calculates transaction and ad fees on the total sale price including shipping.

You can watch the presentation by Etsy CEO Josh Silverman and CFO Rachel Glaser by visiting the Etsy Investor Relations page and clicking on Webcast for latest quarterly results.

The April "strike" by Etsy sellers was remarkable in how much media attention it garnered and in getting executives to address the protest, even if Etsy framed it as a protest of higher fees alone and not addressing sellers' protests of structural issues as well.

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Readers Comments

Perminate Link for Etsy Briefs Wall Street on Recent Seller Protest   Etsy Briefs Wall Street on Recent Seller Protest

by: LDWCallsOut This user has validated their user name.

Sun May 8 11:21:56 2022

Ms. Glaser is correct to avoid the use of the word ''strike'' to describe the boycott.  Shop owners are Etsy's customers, not their employees.  

Likewise, Ms. Glaser is correct that the boycott was the result of the fee increase.  There were no boycotts when reselling was allowed in Summer 2015, when Etsy's poor customer service had an impact on shop owners doing business, or when the Off-site Ad money-making gimmick went into effect.

The Star Seller program serves the same purpose as giving an infant or a pet something to chew on to keep them quiet.  Almost daily I see new topics in the Forums started by some silly Etsygirl stressing about her Star Seller status.  While shop owners are concerned about being a Star Seller they won't ask questions about what Etsy plans to do to address the gross imbalance between the number of active shops versus the number of buyers, for example.

Much more interesting (to me, at any rate) were Silverman's comments on Wednesday about Etsy turning its attention to attracting male shoppers through gender-neutral ads and ad placement during sports programming.  That is a HUGE change.  The question I have is how many men will be interested in over-paying for cheapie consumer goods from Asian factories (pretending on Etsy to be unique and handmade) that are also listed on Amazon, eBay, Wal-Mart, and other sites for a lower price?

Perminate Link for Etsy Briefs Wall Street on Recent Seller Protest   Etsy Briefs Wall Street on Recent Seller Protest

This user has validated their user name. by: Ina

Sun May 8 14:47:46 2022

Silly "girls" are worried about their stars - which impacts the visibility of their listings. "Men" are too smart to buy items they could find cheaper on other sites. LOL

Perminate Link for Etsy Briefs Wall Street on Recent Seller Protest   Etsy Briefs Wall Street on Recent Seller Protest

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

Sun May 8 16:50:49 2022

Uh Huh........
Etsy stock WAY over priced.....
Bleeding red on the graph.....
WRECKING BALL ! ! !

Perminate Link for Etsy Briefs Wall Street on Recent Seller Protest   Etsy Briefs Wall Street on Recent Seller Protest

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

Sun May 8 17:03:24 2022

Etsy.
A textbook example of venue mission creep.
Penalize Etsy with a Hefty Hefty Fine.
Setup perpetuitous guidelines drastically reducing the economic damage being done to artists by Etsy.

Perminate Link for Etsy Briefs Wall Street on Recent Seller Protest   Etsy Briefs Wall Street on Recent Seller Protest

by: GetAGrip This user has validated their user name.

Mon May 9 08:26:00 2022

Etsy thinks and rightly so it was all noise.  Nothing has nor will it change  1 percent is nothing.

Perminate Link for Etsy Briefs Wall Street on Recent Seller Protest   Etsy Briefs Wall Street on Recent Seller Protest

by: LDWCallsOut This user has validated their user name.

Mon May 9 09:28:14 2022

@Ina -- Star Seller status doesn't give that shop's items priority in search results. If it did, the first pages of items in results by relevancy would be (except for ads) solid with Star icons under the thumbnails.  This is definitely NOT the case!  If you mean by "visibility of listings" that those little yellow stars draw the shopper's eye to them, and away from the photo thumbnails, I don't think that's true.  I don't even see the stars unless I am looking at the shop's name under the photo.  The Star Seller program is, at most, misdirection.  Like putting a bunch of silly EtsyGIRLs in a virtual round room and telling them they will earn special status by sitting in the corner.

Not all women are dumb enough to pay the Reseller Stupid Tax on Etsy but the women who are that stoopid are Etsy's target market.  (Which is NOT the same market targeted by any individual seller on the site.)  I honestly do not know what percentage of men who visit Etsy would happily pay, say, $80 for an item that sells for $10 on Amazon, $5 on eBay, and < $1 on AliExpress.  I have seen reviews from Etsy buyers with male names (which doesn't prove gender, maybe) who got ripped off by resellers and left a one star.  If the shop sold more than one unit of the same item (which resellers typically do), other reviews left by buyers of the same item with female names left glowing five stars.  

What I've seen doesn't show me that all men are comparison shoppers, and all women are not.  But it looks like reseller shops on Etsy attract buyers who don't comparison shop, and almost of those buyers are female.

How well Etsy does marketing to men remains to be seen.  What Silverman said about it on Wednesday:

“We recently conducted research to better understand men’s shopping attitudes and behaviors, and learned that those who identify as men are as likely as women to be intentional shoppers, valuing handcrafted items, supporting small businesses, wanting to make a positive impact with their purchases or buying items that reflect their personality."

Whether the research results mean that Etsy will start marketing to silly EtsyBOYS now is still an unknown.

Perminate Link for Etsy Briefs Wall Street on Recent Seller Protest   Etsy Briefs Wall Street on Recent Seller Protest

by: Snapped This user has validated their user name.

Mon May 9 09:30:22 2022

1%.  Meh.  But is it really?

It was ‘significant’ enough to address it’s ‘insignificance’.  The fact it “want back to normal” is significant too.  It was not only noticed, it was acknowledged and measurable.  Media ‘attention’ given.  Where has that happened before?

It wasn’t a ‘strike’.  But it was ‘organized’, no matter how ‘significantly’ that might be argued in a ‘traditional’ sense.  So that shows that IF sellers could organize ‘more’, and act a bit ‘more’ in unison to create similar ‘notice’, perhaps those attendant messages will get a bit more respect.

And even diminished at “only 1%”, how much ‘addressable loss” would the boardroom, and those stockholders, endure before blinking?  That’s always the question, isn’t it?

Pablum for the masses (both sexes 😬).  Frog pot fee stoking.  Wall St. spin doctoring.  Arrogance, hypocrisy, opacity and disrespect.  American Business, 21c. style.  There’s your ‘meh’.

Perminate Link for Etsy Briefs Wall Street on Recent Seller Protest   Etsy Briefs Wall Street on Recent Seller Protest

by: Stone Cutter This user has validated their user name.

Mon May 9 09:44:34 2022

***Depop in UK***

And yet, Etsy didn’t need to purchase two more companies, one of which being Depop. Etsy could have made/paid for more investments into Etsy.com. Sellers criticize Etsy for poor or non-existent customer service and it seems to me that Etsy is on its way to running Depop the same. Here is an excerp I found on Depop, on Wikipedia.

“Currently Depop have disabled their customer support email function and replaced it with automated bots set up to direct app users in circles with automated messaging.”

I recently learned on CNBC, that during Covid, it was the small “mom&pop” investors who sat at home and ran up stock prices for e-commerce stocks. Now that those small investors have left Wall Street, it sent Etsy’s stock from 296 down to 84. Etsy’s fate will be in larger institutional investors who may now look at Etsy in a different light....as more of a scam company than a well operated business.

I appreciate the effort of this “strike”. It’s the messaging into Wall Street that is golden.  

Perminate Link for Etsy Briefs Wall Street on Recent Seller Protest   Etsy Briefs Wall Street on Recent Seller Protest

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

Mon May 9 12:36:01 2022

GetAGrip

Perminate Link for Etsy Briefs Wall Street on Recent Seller Protest   Etsy Briefs Wall Street on Recent Seller Protest

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

Mon May 9 12:38:57 2022

Etsy stock hitting 2019 territory......

Perminate Link for Etsy Briefs Wall Street on Recent Seller Protest   Etsy Briefs Wall Street on Recent Seller Protest

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

Mon May 9 12:42:40 2022

Going Down.......
Pretzels, Edsels and lingerie.....

Perminate Link for Etsy Briefs Wall Street on Recent Seller Protest   Etsy Briefs Wall Street on Recent Seller Protest

by: Stone Cutter This user has validated their user name.

Mon May 9 13:48:14 2022

I disagree with this statement....
"Men" are too smart to buy items they could find cheaper on other sites."

If Etsy had a men's jewelry category, Etsy could make good money. The best Artisan Jewelers on Etsy with price points of $250+ continue to have good sales growth despite higher shipping costs and higher Etsy fees. Good artisan jewelers have substantially increased price points and continue to drive good sales.

Cheap jewelry vs. Artisan jewelry...Cheap mass produced will not last long on any site as site fees and shipping costs will destroy their businesses. When I see jewelers sell products for $25.00 with free shipping, I wonder if it's worth it, when net profit is only around $10.00...before taxes.

There is an Artisan Jeweler I follow who periodically makes men's cufflinks for $300 with gorgeous custom cut cabochon stones, wrapped in a gold bezel wire. Most of her men's listings last for no more than 3 days until sold. There is most definitely money in men's artisan jewelry as there is in women's artisan jewelry.  

Perminate Link for Etsy Briefs Wall Street on Recent Seller Protest   Etsy Briefs Wall Street on Recent Seller Protest

This user has validated their user name. by: Ina

Mon May 9 14:03:32 2022

Regarding Star Seller program increasing visibility, see:

- "Etsy Promotes Star Sellers in Email Marketing Campaign" (September 14, 2021)
https://bit.ly/3LXWGBl

- "Etsy CEO Admits New Program May Impact Sellers' Search Exposure" (August 5, 2021) - was under consideration at the time.
https://bit.ly/2WUezfD

The terms silly EtsyGIRLS and silly EtsyBOYS make me cringe, I don't like to see any hardworking seller denigrated (and as you can see, being in the Star Seller program can get you increased visibility).

Perminate Link for Etsy Briefs Wall Street on Recent Seller Protest   Etsy Briefs Wall Street on Recent Seller Protest

by: LDWCallsOut This user has validated their user name.

Tue May 10 14:56:05 2022

Having Star Seller status can get you increased visibility the same way playing a lottery can make you a multi-millionaire.  While it's certainly true that you can't hit the lottery jackpot if you don't play, just buying a ticket (or a few) doesn't mean that you don't need a realistic way of paying your bills.

Etsy has a bunch of search relevance algorithms that aren't predictable by time of day, day of the week, holiday proximity, or anything else obvious.  The relevance of items to the same search terms can change several times during one day or stay the same for most of week.  What's significant for sellers is that none of them are too focused on the search term a shopper enters.  A boost in Etsy search looks like getting your lottery winnings in the form of Monopoly money.  

I don't think I've directed any mockery at ethical professional sellers on Etsy.  Other shop owners (men and women both) step up in the Forums and attempt to bring the Star Seller icon chasers back to reality when they post.  And several shop owners repeatedly post that the Star Seller program seems weighted with resellers.

Perminate Link for Etsy Briefs Wall Street on Recent Seller Protest   Etsy Briefs Wall Street on Recent Seller Protest

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

Thu May 12 10:44:57 2022

Sellers no longer have a "Pocketbook" but now a Tin Cup.
Etsy CEO Josh Silverman is very proud of how he single handedly, irreparably damaged and destroyed Etsy.

Perminate Link for Etsy Briefs Wall Street on Recent Seller Protest   Etsy Briefs Wall Street on Recent Seller Protest

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

Thu May 12 11:41:47 2022

"Glaser also revealed that sellers subsidize 40% of everything Etsy spends on marketing directly through its controversial Offsite Ad program. She characterized the program not as a higher "take rate," but as a "success-based model." "
a) I coined this "Take Rate" phrase now used in the industry.
b) I also coined the phrase "Success Penalty Fee".
I'm VERY tuned in to the pillaging, and pilfering being committed by these venue CEOs.
It will end.  

Perminate Link for Etsy Briefs Wall Street on Recent Seller Protest   Etsy Briefs Wall Street on Recent Seller Protest

by: ShortSeller This user has validated their user name.

Fri May 13 15:18:09 2022

Sellers there deserve the platform they get for remaining on there.

Perminate Link for Etsy Briefs Wall Street on Recent Seller Protest   Etsy Briefs Wall Street on Recent Seller Protest

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

Fri May 13 15:33:44 2022

That's the Most STUPID thing anyone could say.



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