Etsy may be considering a shipping program similar to Amazon Prime. An Etsy seller reported last month that Etsy sent a survey to customers asking if they would pay a yearly subscription fee in order to get free shipping on their orders.
We haven't confirmed the existence of such a survey, and we've only seen one seller write about it. But it's easy to believe Etsy might want to see what kind of response buyers would have to such a program, whether or not it was under serious consideration at this point.
Many of the sellers responding to the original poster expressed concern about Etsy's push for them to offer free shipping, and some sellers said they wanted to understand why. Etsy CEO Josh Silverman provided an answer to that question when talking to Wall Street analysts earlier this month.
He said less than 20% of listings on Etsy offered free shipping in the third quarter (July, August, September) - but "buyers perceive about half of the items in our marketplace as having high shipping prices."
Silverman said Etsy's first step was to educate sellers about the impact of high shipping prices - he wants sellers to think of shipping as part of their cost of goods sold.
And he said Etsy is now tweaking its search algorithms to more prominently promote items that buyers perceive as having "competitively priced" shipping.
"Sellers pay a lot of attention to where they rank in the search algorithms," he said.
Etsy has also begun notifying sellers if it thinks their shipping costs are too high.
And Etsy launched a Holiday Sweepstakes for sellers who offer free shipping.
But it's a hard sell for sellers who say costs vary depending on the weight of the package and the location of the buyer.
Silverman also mentioned during the third-quarter earnings call that many of Etsy's items are not sitting in a warehouse, and he called that a strength because those items have the opportunity to be personalized or customized, made-to-order for the customer.
If Etsy doesn't follow Amazon's logistics model by building warehouses, how would it be able to offer a Prime-like program? For ideas, look at eBay in Australia and Germany where it offers eBay Plus.
As we wrote in this Newsflash article
in June, eBay Plus costs buyers $49/year. Shoppers who subscribe to the program get free shipping and free returns on certain items: "Just look out for the eBay Plus logo on the listing page and in search results. You can also use the eBay Plus filter in search results."
Members of eBay Plus receive "free delivery and free returns on all eBay Plus listings, plus bonus flybuys points, exclusive deals and offers, as well as premium customer service." Note that eBay Plus has some notable differences when compared to Amazon Prime: free delivery on eBay Plus items only applies to the standard postage service.
Etsy hasn't given any indication it is considering a similar program, nor for that matter has eBay indicated it will expand eBay Plus to the US. But what do you think the chances are of either or both companies offering such a program?