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Mon Oct 22 2018 23:57:07

Etsy Sellers Describe Bumpy Ride with New Billing

By: Ina Steiner

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Etsy sellers are confused as the marketplace rolls out changes to the way it bills sellers. In April, Etsy announced major changes that would be coming in June, spinning it as a "simpler" system. On June 28, Etsy announced it was delaying deployment. 

It said at the time, "Since our announcement, a lot of you have shared your feedback and we're listening. We're hard at work making the redesigned payment account the best it can be for you and your shop, and to help make that happen, the new experience will now be released later this year."

On September 24, Etsy announced it would begin rolling out the new system in the coming weeks. And last week, reports of confusion started rolling in on the Etsy boards.

As we reported in April, sellers objected to the overall concept of deducting fees as orders are placed, and EcommerceBytes readers reacted with their own comments.

In this thread on the Etsy boards started in April, Etsy explained sellers would not be able to opt out. Among the FAQs published was the following:

Q: I want control of my funds. I like to pay my bill with a credit card and then use my sale funds to pay to make and ship my items. I don't want you to net the fees out of my payments. Can I opt out of this?

A: With the redesigned payment account, your fees will be automatically deducted from your balance as you go. Unfortunately, it's not possible to opt out of the consolidated statement. If you have an amount due, you can make a payment with your credit card or PayPal at any time by going to www.etsy.com/your/bill/payments. If you have funds available for deposit, you can schedule an earlier deposit or change your deposit frequency.

The thread garnered 159 posts (and counting).

In its September 24th announcement, Etsy included a link to a video with more information:

Coming soon: Your redesigned payment account
Managing your shop's finances is getting even easier: we're combining your payment account and bill and changing how you're billed on Etsy. You'll start to see the new payment account in Shop Manager in the coming weeks. (This is the update we announced in April - we're excited to share more details with you.)

Watch this video to get familiar with the redesigned payment account: youtu.be/KlyCaZhVAGE

We'll update you when the new experience is available for all sellers in Shop Manager.

As the new system deployed this month, there was some angst - see the discussion in this thread, for example. 

One reader told us that while eBay's new 'integrated payments' seems aimed at limiting buyers' use of PayPal, Etsy's new finance system seems aimed at limiting sellers' use of PayPal. "I know it's all about the money - Etsy wants their fees from your payment account because they themselves don't pay fees on that, they do if the seller uses their PayPal account to pay their fees," the seller said. "For me, for now, it just pushed me to work harder on my own site, and take all my shipping ($200-$400 monthly) elsewhere."

Some other sellers on the boards said they were looking for third-party shipping solutions to avoid Etsy's new billing system for their shipping expenses.

Let us know if Etsy has placed your account into the new billing system and how you like it.



Comments (29) | Permalink

Readers Comments

Perminate Link for Etsy Sellers Describe Bumpy Ride with New Billing   Etsy Sellers Describe Bumpy Ride with New Billing

This user has validated their user name. by: Marie

Tue Oct 23 02:00:54 2018

I hasn't affected my account yet.  And I don't look forward to when it does.  I much prefer making my payment monthly.  I do understand that Etsy makes more money this way, but I would prefer they weren't doing this.

Perminate Link for Etsy Sellers Describe Bumpy Ride with New Billing   Etsy Sellers Describe Bumpy Ride with New Billing

This user has validated their user name. by: Rexford

Tue Oct 23 06:05:10 2018

"a lot of you have shared your feedback and we're listening"

Ha! What a classic line used by these "venues". Sellers share feedback and they do the opposite of what sellers request.

Honestly, I could care less how they bill me as long as they bill me accurately.  What I do care about is there new algorithms which have already hurt my sales.

Etsy has come down with a case of eBay-itus.  

Perminate Link for Etsy Sellers Describe Bumpy Ride with New Billing   Etsy Sellers Describe Bumpy Ride with New Billing

by: maxmad This user has validated their user name.

Tue Oct 23 06:07:18 2018

We don't have any issues paying one large sum at the end of the month, but I can see some sellers not paying their bills or delaying at the end of the month, more then likely etsy is doing this because of the few that have issues paying in one large sum, shipping costs can add up when purchasing thru etsy, which etsy is probably paying for, then waiting for the money from sellers, in the 10's of millions for sure,

etsy won't back down from this, it's going to be the norm,


Perminate Link for Etsy Sellers Describe Bumpy Ride with New Billing   Etsy Sellers Describe Bumpy Ride with New Billing

by: HappyOne This user has validated their user name.

Tue Oct 23 06:40:55 2018

This is a mistake by Etsy. I know a few hobby crafters that brag about making $200 - 300 a month. They see this amount without consideration of the fees and shipping that is now deducted from a registered credit card. They are “hobby” sellers not businesses. When the Etsy net payments of $80 to $120 start there maybe less interest. Etsy has said 80% of their sellers are female. I suspect many are crafters working on the kitchen table. My Etsy sales are down since the fee increase and “highly suggested” free shipping. I have raised my prices accordingly. Etsy has touted adding a large number of India  (low paid workshops?) crafters to the site I doubt there will be few buyers from India; just sellers. Wall Street is demanding a large increase in growth.    

Perminate Link for Etsy Sellers Describe Bumpy Ride with New Billing   Etsy Sellers Describe Bumpy Ride with New Billing

This user has validated their user name. by: Rexford

Tue Oct 23 10:53:47 2018

"Etsy has touted adding a large number of India  (low paid workshops?) crafters"

again, eBay-itus.  It will be cheap manufactured garbage.

Perminate Link for Etsy Sellers Describe Bumpy Ride with New Billing   Etsy Sellers Describe Bumpy Ride with New Billing

This user has validated their user name. by: Marie

Tue Oct 23 13:17:24 2018

@maxmad

Etsy is in the perfect position to force a seller to pay their fees within a reasonable amount of time, IF that seller wants to continue selling.  Same as Ebay does.  You get a certain amount of grace period and then if you haven't paid, your selling account is on hold until you do.  Pretty good incentive to get them paid I'd say.

Perminate Link for Etsy Sellers Describe Bumpy Ride with New Billing   Etsy Sellers Describe Bumpy Ride with New Billing

This user has validated their user name. by: Marie

Tue Oct 23 13:23:22 2018

@happyone

They may be hobby crafters, but make no mistake, they are running a little business.  The Etsy fees you estimate above on those sales is far higher than Etsy actually charges.

I'm sorry to hear your sales have slowed down.  That however wouldn't have anything to do with Etsy raising the rates on sellers because the buyers don't see that.  Well except when we have to raise pricing to cover those increases.  So the increase in the price of what you are selling is likely what buyers aren't liking..

Unfortunately it is what we all have to do when the cost of doing business goes up.  Hopefully it will pick up for you very soon.

Perminate Link for Etsy Sellers Describe Bumpy Ride with New Billing   Etsy Sellers Describe Bumpy Ride with New Billing

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

Tue Oct 23 19:20:11 2018

Etsy's takes out a (1) "fee per item sale" right when the transaction happens.
Then they charge even (2) MORE per transaction plus (3) "shipping transaction fees" and bill for all of that at the 1st of every month.
So Etsy is TRIPLE DIPPING.
I'm getting SCREWED.

Perminate Link for Etsy Sellers Describe Bumpy Ride with New Billing   Etsy Sellers Describe Bumpy Ride with New Billing

This user has validated their user name. by: Marie

Tue Oct 23 19:44:31 2018

@theend

I think you misunderstand the process as it is before they implement what this article is about.

They aren't "triple dipping".  Under what they have been doing, they take their money processing fee from the money received.  But the various FVFs due on the transaction are added to your monthly bill, that is paid monthly.

Now the fees they charge might be confusing as there are 2 different FVFs and a relist fee.  

The relist fee is 20 cents each and every time you sell an item.  Even if you have a variation listing and you sell several items from that one listing.  Etsy charges 20 cents for each sale.  This is by line item in the listing.  For example you have something that comes in Sm, Med & large.  You sell one of the Sm & Med, then 2 of the large.  You will be charged three 20 cent relisting fees.  Fair, no, not at all, but it is what they do.

Then you have the FVF on the S&H charged and the FVF on the product sale amount.

Those are probably the charges you are seeing and it can be confusing.  I hope this helps.

Perminate Link for Etsy Sellers Describe Bumpy Ride with New Billing   Etsy Sellers Describe Bumpy Ride with New Billing

by: HappyOne This user has validated their user name.

Tue Oct 23 20:01:24 2018

@ Marie
My examples show before gross sales (already reduced by Etsy Pay fees) which was the previous disbursements vs. the “new” disbursements that will be net Etsy listing and final value fees and cost of shipping labels. The major part of the difference is the shipping cost. When every expense is netted out many crafters will see directly how much they are making without regard to materials and their time. Some crafters only pay the minimum on their charge and have no real bookkeeping system.  

Perminate Link for Etsy Sellers Describe Bumpy Ride with New Billing   Etsy Sellers Describe Bumpy Ride with New Billing

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

Tue Oct 23 23:18:43 2018

Thang giew Marie  :o)

Perminate Link for Etsy Sellers Describe Bumpy Ride with New Billing   Etsy Sellers Describe Bumpy Ride with New Billing

by: wilburnet This user has validated their user name.

Wed Oct 24 04:28:28 2018

@Marie  thanks for explaining the various fee's and how they are deducted. I have been affected by the payments system on Etsy yet.  

Perminate Link for Etsy Sellers Describe Bumpy Ride with New Billing   Etsy Sellers Describe Bumpy Ride with New Billing

This user has validated their user name. by: Marie

Wed Oct 24 13:32:35 2018

@HappyOne

Etsy has been charging a FVF on Shipping for awhile now.  It is NOT new to this new way of collecting their fees.

"When every expense is netted out many crafters will see directly how much they are making without regard to materials and their time."  YES, absolutely.  That would be because it is NOT Etsy's responsibility to keep your business records for expenses.  They don't have access to all your costs nor should they.  It is the individual crafter that is responsible for keeping ALL their business records so that they can properly file their taxes due to their particular state and the federal government.

Those that don't have a bookkeeping system have a problem, as they should have this in place.  It isn't Etsy's responsibility to provide them with one.  Any and all sellers that do this on any site, do it at their own risk.  They are ALL responsible for properly reporting their income to their State and to the Federal Government.  They may not want to or feel they need to, but that does not change a thing.  They are SUPPOSE to.  Tax evasion is a federal offense.

Perminate Link for Etsy Sellers Describe Bumpy Ride with New Billing   Etsy Sellers Describe Bumpy Ride with New Billing

by: HappyOne This user has validated their user name.

Wed Oct 24 16:49:11 2018

@ Marie
Please do not misunderstand me. I am not knocking Etsy; this will actually make profits a little more transparent for the “casual crafter”. What I am saying Etsy is helping some “casual crafters” realize that their efforts maybe better spent elsewhere.
Your must read the Etsy Discussion boards too; sometimes the questions, replies and advice make me wonder how little common business sense some people have. Some really do think gross sales equals profit. I have met some casual crafters at my Post Office that I know that have professionals jobs that talk/think this way too.
I wish you many profitable sales on Etsy too.    

Perminate Link for Etsy Sellers Describe Bumpy Ride with New Billing   Etsy Sellers Describe Bumpy Ride with New Billing

This user has validated their user name. by: Marie

Wed Oct 24 17:49:49 2018

@happyone

And those that don't understand the difference between gross and net sales are probably those that are NOT claiming their sales on their taxes, which is all kinds of wrong.

I personally have no need or desire to help them defraud the government.  Not my fault they can't understand the basics of running a little business.  That may sound harsh, but it just isn't that hard of a subject to wrap your head around.  If these sellers don't understand that they have to pay fees to whatever site they chose to sell on, that isn't my issue, that is theirs.

I don't and am not likely to like this change by Etsy.  I don't support it because there are some that don't understand what a cost of doing business is.  I don't support it because I don't like it.  I will deal with it as there does not appear to be an option.  But that does not mean I like it.

Perminate Link for Etsy Sellers Describe Bumpy Ride with New Billing   Etsy Sellers Describe Bumpy Ride with New Billing

by: HappyOne This user has validated their user name.

Wed Oct 24 21:09:20 2018

@Marie
More than likely these casual sellers have no taxable income but a loss when legitimate expenses are considered. As a hobby this loss it is not deductible. Run Etsy as a business these losses are deductible against other income with with certain time limits and restrictions. I think for income fraud penalties to be assessed under reporting income has to exceed 25% (or more) of the total taxes due. Additional taxes due of less than $5,000 per year are rarely found by IRS unless there is an unreported W2, 1099 or information provided by an ex spouse, employee or neighbor. Most of these casual sellers have little to fear from IRS.    

Perminate Link for Etsy Sellers Describe Bumpy Ride with New Billing   Etsy Sellers Describe Bumpy Ride with New Billing

This user has validated their user name. by: Marie

Thu Oct 25 01:59:59 2018

@HappyOne

Maybe yes, maybe no.  But if they don't know what their expenses are as you said, it isn't likely that they even know what taxable income is.  

I can't agree with you nor would I suggest that anyone try to see if they can get away with not paying their taxes.  That can be a huge risk.  Especially for people as you describe that aren't sure what their expenses are.  If they don't know what they are, then it is likely they are not tracking them.  If they aren't tracking the expenses then they can not prove them, if IRS came knocking their income will be off and their so called hobby sales would be much higher than they think it is.

And BTW there is more at risk than money penalties too for not paying taxes.  

Perminate Link for Etsy Sellers Describe Bumpy Ride with New Billing   Etsy Sellers Describe Bumpy Ride with New Billing

by: wilburnet This user has validated their user name.

Thu Oct 25 04:59:31 2018

There are major issues with the new payments system - I just hope i dont get any refunds running up to the Christmas season. Also, The new Simplified Finances page does not have a button to make a manual payment. The button will apparently magically appear on the 1st when bills come out. So if you get switched over mid month to the Simplified Finance set up, and end up with a negative balance there is no way to pay it down at all other than etsy just taking all revenue from all sales until it's no longer in the negative. This means that if you start the new finances with any sort of bill for the month so far you will start new finances in the negative and will not get any deposits until that is paid. Be prepared people.  

Perminate Link for Etsy Sellers Describe Bumpy Ride with New Billing   Etsy Sellers Describe Bumpy Ride with New Billing

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

Thu Oct 25 08:54:22 2018

Etsy is saving money without sharing the cost savings. They charge the seller for funds processing and then take their fees after that. Basically, they are charging the seller to collect Etsy fees for them.

Previously they would have had to pay processing charges on the fees they collect from the sellers, for example the cost of charging the seller's credit card for the fees they collect.  

Perminate Link for Etsy Sellers Describe Bumpy Ride with New Billing   Etsy Sellers Describe Bumpy Ride with New Billing

by: MissEnchanted This user has validated their user name.

Thu Oct 25 09:00:11 2018

One of my Etsy accounts was switched to the new system mid-month, and it was very disheartening.

Etsy backs up the accounting to the beginning of the month, so any shipping labels, commissions, and listing fees previously incurred show as a negative balance. My sales between now and the end of the month go toward paying down that balance -- so you send out your merchandise (the shipping label further increases what you owe) and have nothing to deposit until you pay off the balance.

There is nowhere for me to pay the current amount due, despite what Etsy said, until the first of the month.

I think the system will have unintended consequences for casual sellers -- it exposes how much Etsy takes, and there's a negative psychological impact of seeing  deposits diminished.

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