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Tue Apr 17 2018 19:12:02

Sellers Fume over Etsy Billing Changes

By: Ina Steiner

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Some sellers are fuming over changes Etsy will make in how it collects fees. Beginning in June, the online marketplace will start automatically deducting taxes and fees from their Etsy Payment accounts, the company announced this morning. "Starting in June, we'll automatically deduct any taxes or fees you owe from the money you've made from Etsy Payments sales. Way simpler, right?"

Etsy couched the change as a way to make it easier for sellers to view their revenue, fees and taxes all in one place. But sellers pointed out Etsy could improve reports without having to make a change in how it collects their fees. 

Etsy failed to point out that collecting fees on the fly will help its own cash flow, while negatively impacting the cash flow of sellers. As one reader told us, "I don't get 30 days to pay my credit card balance - the Etsy fees are taken directly from my payment account."

The reader also pointed out the move will save Etsy money: "Etsy gets out of paying merchant fees on the credit card payments I make to pay for their bills."

A major concern for many sellers: they will no longer be able to earn cashback on their credit card payments. "How can Etsy decide how we pay our bills? We pay with a credit card that gives a percentage back - that will be gone," one seller wrote.

By promoting the billing change as a benefit to sellers without acknowledging how it helps its own finances, Etsy appears to have lost standing in the eyes of some sellers.

It also failed to anticipate questions the announcement would generate. For example, some sellers were concerned Etsy would reach into bank or credit card accounts associated with their shops to get money owed if their Etsy Payments balance wasn't enough to cover the charges. 

That's not the case - in a discussion thread, an Etsy moderator responded to questions stating the marketplace would not take fees from seller bank accounts. And according to a page explaining the changes (a click away from the announcement): "If you have an outstanding balance that's not covered by your Etsy Payments sales, your outstanding balance will still be due on the 15th of the month as always, but any sales you make before then will count toward your balance."

Some sellers expressed concern that their bookkeeping would become more confusing as a result of the change rather than simpler.

Etsy provided some clarification in an update and through answers in a discussion thread about the changes, including the following points:

- "Taxes that you currently pay on your monthly bill will appear on your redesigned Payment account and be deducted from your sales."

- "Fees and taxes will be automatically categorized so you can see how much you spent on listings, shipping labels, and marketing. You’ll be able to see details of fees paid by looking at your current statement, the past six months, or the entire year. Promoted Listing fees will appear on the Payment account daily and be deducted from your sales."

- "You'll still be able to provide refunds to your buyers as you do today."

An Etsy spokesperson provided us with the following statement in response to our inquiry about seller response to the announcement: 

"Simplifying finances has been one of the most common requests we’ve received from the Etsy seller community. The changes announced today are the direct result of feedback received from sellers and are designed to streamline the financial side of running an Etsy shop and make Etsy an even better platform to start, manage and scale creative businesses. 

"We know that sellers rely on income from their Etsy shops and that finances are an important topic for them, which is why we wanted to share the news about the upcoming changes early.

"We understand that sellers have questions about the redesigned Payment account and we want to reassure them that we will be addressing those questions as we begin to roll out updates in June. 

"In the meantime, sellers can visit this dedicated forums thread where we are responding to questions throughout the day."

Not every seller was concerned about the changes. Said one seller, "Maybe I'm the only one who actually thinks this is a good idea? I at least like the idea of it in the fact that after I ship an order out, I automatically pay my full bill, then manually deposit the funds into my account."

But a seller replied, "They are deducting the fees before you ship. Immediately upon order."

Another seller wrote:

"The ONLY thing that would make some semblance of sense would be for Etsy to deduct their transaction fees at the point of sale, like they do the CC processing fee. (Not saying I like this necessarily, but could live with it.)

"But deducting the cost of promoted listings, shipping labels, and .20 listing fees DAILY from sales money that happens to still be in my Etsy account is just outrageous. Please charge me for these things on a combined bill at the end of the month, like a normal company."

Another seller viewed the change positively, saying it would make Etsy a healthier selling site:

"Another person here who thinks it's a good idea. 

"Yes, the spreadsheet accounting system I use will need some adjustments but I'll cope! I already pay my Etsy bill several times a month so this will aid in getting that job done efficiently.

"From Etsy's point of view (with my business manager hat on) this is an excellent move. The amount of seller debt that Etsy carries on a daily basis must be absolutely phenomenal; this will mean that more money is streaming through Etsy's accounting system and that makes for a much healthier Etsy selling site.

"Feeding the horse before the rider makes sense."

While this change only impacts Etsy sellers, those selling on eBay may want to pay close attention to how this shakes out. eBay will soon begin transitioning to a "payments intermediary" model as Etsy did with Etsy Payments. Once it does, eBay can make the same move to collect fees from sellers from their account balances.

You can find the full announcement on the Etsy website. Let us know what you think.




Comments (63) | Permalink

Readers Comments

Sellers Fume over Etsy Billing Changes   Sellers Fume over Etsy Billing Changes

This user has validated their user name. by: Marie

Tue Apr 17 19:35:10 2018

It is the same thing that Amazon has done for years.  And I suspect that when Ebay starts to handle the money they will do the same thing.

As many people do, I pay this kind of stuff with my credit card that earns me cash back bonuses.  It is a nice way to build up a little extra spending money.  But I also understand why Etsy is doing this.  It will certainly save them money and labor.

I do however hope they come up with better reports soon.

Sellers Fume over Etsy Billing Changes   Sellers Fume over Etsy Billing Changes

by: pace306 This user has validated their user name.

Tue Apr 17 20:01:19 2018

All it means (in real terms) is that poor sales by Etsy arent enough to fund the growth of the company and sustain it through day to day operations.

They are spending more then they take in.

They didnt do this to help anyone - lets not be naive.

"But Amazon does it" is not a reason for ANYTHING - but yet its the battle cry for anyone who needs to explain away a sites bad behavior.

Sure eBay will do it - to ensure seller compliance.

The money you make ISNT a paycheck where your employer deducts taxes and Fica.

You make a sale and you pay the venue in the time frame they allotted to you. Its not hard, its not complicated - unless the site you run, cant come up with the cash to fund its day to day operations.

Plus ... wher else are you going to go to sell your stuff? Amazon isnt the place, and eBay is as crooked as Al Capone aka they know you have no choice - so its ok to squeeze you.

Others here will say its all normal and ok - YOU be the judge.

Sellers Fume over Etsy Billing Changes   Sellers Fume over Etsy Billing Changes

by: maxmad This user has validated their user name.

Tue Apr 17 23:01:09 2018

It's crazy how these venues never stop taking more, it's either control or money,

The funny part is most sellers just accept it, and the venue then moves on to the next creative cash grab or takes more control

I personally do not accept it, and will never accept it ,  we will punish etsy just like ebay  for this thru off etsy sales, listing less items,  and using less of their services, like promotions and buying postage.

The gains they think they are getting,from us will be offset ten fold in what they loose. , I'd advise every seller to do the same,  

Sellers Fume over Etsy Billing Changes   Sellers Fume over Etsy Billing Changes

by: BingBong This user has validated their user name.

Tue Apr 17 23:08:35 2018

Etsy doesn't give one hoot about sellers. Sellers are just their piggy bank. We have an etsy shop and this will destroy our Cashflow. We sell stickers and tend to do volume sales and shipping. So all it will take is one lean week when we ship a lot of orders (i.e. Run up a bill in one day) and now suddenly we have no income flow. If Etsy cared about ease they'd create a separate account to segregate the shipping fees. That single handelst would ease billing and payment issues down to about 0. They have done nothing but milk sellers and screw with settings for over a year. This isn't even a veiled attempt at lining their pockets. They don't seem to get that this isn't their money to manage. They seem to think sellers are their employees.

Sellers Fume over Etsy Billing Changes   Sellers Fume over Etsy Billing Changes

by: BingBong This user has validated their user name.

Tue Apr 17 23:09:15 2018

Single handedly*

Sellers Fume over Etsy Billing Changes   Sellers Fume over Etsy Billing Changes

by: Golddustwoman This user has validated their user name.

Tue Apr 17 23:55:31 2018

Last year when Etsy demanded sellers turn over their bank account information, I closed my shop. So I knew something like taking their money when they want was bound to happen. No one has the right to touch anyone else's money without permission. So stop giving Etsy permission and close your stores. People need to start making a stand and stop being sheep. My handcrafted items are selling just as well on Bonanza and elsewhere.

Sellers Fume over Etsy Billing Changes   Sellers Fume over Etsy Billing Changes

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

Wed Apr 18 00:06:06 2018

I don't like this at all.  I've done bookkeeping all of my life for various companies.  I want to see all income coming in and all expenses going out as separate line items.  I don't want my sales applied to my expenses.  This may be a deal breaker for me.

Sellers Fume over Etsy Billing Changes   Sellers Fume over Etsy Billing Changes

This user has validated their user name. by: tanzi

Wed Apr 18 01:19:00 2018

Mercari & poshmark do it that way also. I actually like it better,  this way instead of looking at one big end of the month bill i have have to pay, the payment is already paid and gone.  

Sellers Fume over Etsy Billing Changes   Sellers Fume over Etsy Billing Changes

This user has validated their user name. by: SparklingSisters

Wed Apr 18 01:54:53 2018

I don't understand why everyone is going crazy over this.  I agree with tanzi.  I'd rather $20 a day is deducted out of my Etsy payment account than having to come up with $600 at the end of the month when my mortgage is also due.  Pay now ... pay later ... doesn't matter, you still have to pay it.

Sellers Fume over Etsy Billing Changes   Sellers Fume over Etsy Billing Changes

This user has validated their user name. by: Marie

Wed Apr 18 02:35:23 2018

If this is a sign of poor sales on Etsy, then that must mean that all other sites that handle fees this way must too be having low sales.  Not sure that is the case, but then I don't sell on all the sites that do this.  I do however sell on Amazon and I just don't see it as an issue.

*******************
@Pace

""But Amazon does it" is not a reason for ANYTHING - but yet its the battle cry for anyone who needs to explain away a sites bad behavior."  That isn't what I said, what I said was:  It is the same thing that Amazon has done for years.  Which is a factual statement, not an opinion on anything.

@madgeshatbox

They don't lump things together.  You will be able to see the separate expense and income on Etsy.  The accounting for this will not be difficult.  It is just something to get use to is all.  But your accounting will not suffer.

Sellers Fume over Etsy Billing Changes   Sellers Fume over Etsy Billing Changes

by: Chicago48 This user has validated their user name.

Wed Apr 18 02:40:30 2018

"Mercari & poshmark do it that way also. I actually like it better,  this way instead of looking at one big end of the month bill i have have to pay, the payment is already paid and gone. "
^^ THIS.  I like having the money taken at the point of sale vs. what Ebay does, waiting once a month to bill.  

Sellers Fume over Etsy Billing Changes   Sellers Fume over Etsy Billing Changes

by: BargainzBabylon This user has validated their user name.

Wed Apr 18 02:53:29 2018

So far this isn't a big deal for me. But I really hate the hokey marketing speak ''Way simpler, right?''  Oh, just stop. We're adults lol.

This will keep an even cash flow through the site and make taxes easier for me. And I strongly suspect this will be tweaked a bit as time goes on. All I ask is they keep some logic in the reporting, and go easy on the post-literate cutesy icons that can mean anything and just make it clear. Again, we're adults.  

Sellers Fume over Etsy Billing Changes   Sellers Fume over Etsy Billing Changes

by: wilburnet This user has validated their user name.

Wed Apr 18 06:49:23 2018

There is always Ecrater - you pay your fee's once a month, no charges for listings and you can use Paypal Checkout. On Ecrater you are in control as to what payment method to use and you are in charge of your money. Etsy is over saturated with Chinese resellers and sellers who dont pay for their shops

Sellers Fume over Etsy Billing Changes   Sellers Fume over Etsy Billing Changes

by: RAOTFLMAO This user has validated their user name.

Wed Apr 18 07:46:43 2018

I like the fees coming out of the sale before it ever hits my bank account.  It is over and done with.
I also wonder how many sellers have left owing money to etsy. No one likes change.  

Sellers Fume over Etsy Billing Changes   Sellers Fume over Etsy Billing Changes

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

Wed Apr 18 07:47:23 2018

For anyone who thinks that this move is even barely acceptable- you are delirious!

Suppose your landlord decided that instead of collecting your rent on the first of the month or when it is due, he could reach into your bank account at any time during the month to take what was owed him as of that date.

Or how would you feel about your credit card company being able to reach into your bank account at any time during the month or as soon as you made a purchase?

Most of us have fairly complex arrangements with our money.  First of all:  IT IS OUR MONEY!   Don't you get that??

Etsy does not own ANYTHING.  ALL OF THE MERCHANDISE ON THEIR SITE BELONGS TO THE SELLERS.

ONCE THIS CHANGE IS PUT INTO PLACE, ETSY WILL ESSENTIALLY HAVE COMPLETE CONTROL OVER OUR BUSINESSES.

Marie and all the other Etsy Shills who post here- you are defending the indefensible.  Who do you think you're kidding?

I just wish that somehow the Etsy sellers could unite around this issue and bring a lawsuit or file criminal charges against Etsy for what amounts to highway robbery.

Sellers Fume over Etsy Billing Changes   Sellers Fume over Etsy Billing Changes

by: pace306 This user has validated their user name.

Wed Apr 18 08:13:32 2018

Ladies & Gentleman - welcome to Wordsmithing 101

"If this is a sign of poor sales on Etsy, then that must mean that all other sites that handle fees this way must too be having low sales.  Not sure that is the case, but then I don't sell on all the sites that do this.  I do however sell on Amazon and I just don't see it as an issue."

Your electric bill comes 1x a month - they dont deduct daily from your bank, neither does your bank/mortgage, the gas people, your water bill or even your credit card.

You get billed 1x a month and the charges are layed out in detail on the bill - usage, taxes, costs, credits. Its simple, its easy and even a monkey can read it.

If you feel you need to take money out ALL the time, its a sign you NEED THE FLOAT - aka slow sales.

Again - if you think this is a present, if you think they are doing you a favor - you are naive - its a money grab.

But Amazon Does it.

Mommy to son - why did you hit that other kid - well HE also did it and it wasnt a big deal for me - so I did it too.

Wordsmithing for " do however sell on Amazon and I just don't see it as an issue".

Wordsmithing 101:

Others do it so it must be ok
It doesnt bother me so who cares how it effect others
This is what millennials expect in todays marketplaces
Its common on other similar places so its ok
Amazon (gold standard) does XXXX so its ok
Industry standard
For the good of the platform


That eBay - CA's biggest crime syndicate - doesnt do it YET is a "god d@mn miracle", because as soon as they kick Paypal to the curb - they will too - and YES they too have poor sales - read the article posted about their OVERvaluation of their stock.

Lastly - Amazon makes sales, 3P sellers fullfill - THAT is why they can and do, do it - its THEIR money.

On Etsy or whom ever its NOT - nothing is theirs - NOTHING. Like eBay they are just a platform. The change is unneeded and unwarranted.

I dont sell on Etsy, my wife does - shes just too busy to be bothered with their garbage ATM.

Sellers Fume over Etsy Billing Changes   Sellers Fume over Etsy Billing Changes

by: Transferware Odds and Ends This user has validated their user name.

Wed Apr 18 08:29:36 2018

@FLYING CHILDERS,

I could not agree with you more!!! You hit the nail on the head. The problem is that there are so many stupid, yes I said it  "Stupid" people that dont stand up and fight for what is right or theirs. ETSY is taking complete control over OUR BUSINESS!!! They have no right!! WE The people with shops on Etsy are the ones that made ETSY Millions upon Millions of dollars and they do what they want. They keep for getting they would be nothing with out their sellers.

All these changes monthly are ridiculous! Exactly how many sellers wanted this change in particular, I can tell you not many. And the ones that do, dont read the forums and all the shops complaining of no sales. Shops like mine that have been on ETSY for 6+ yrs and made as much as $45,000 2 yrs ago and is now down to 30-50 views a day, $200.00 in sales last month and $11,000 in sales last year!!!!!!! Are you kidding me.

Take all that money we pay in relisting fees and promoting fees and Actually do something good for the sellers, BRING BACK OUR SALES. PROMOTE US ON GOGGLE, WITHOUT CHARGING US, WE PAY ENOUGH!!!!

JUST A BUNCH OF MORONS OVER THERE AT ETSY,

THEY HAVE A PLAN TO SELL, ANYONE THAT CANT SEE THIS IS JUST STUPID AND SHOULD N'T BE SELLING IN THE FIRST PLACE.  - SELL THE DAM BUSINESS ALREADY AND SOMEONE THAT CAN GET US BACK INTO SELLING, NOT THIS GOOF JOSH, WHO'S LINE OF BUSINESS IS TO "GET BUSINESS' READY FOR SALE"
URGH!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
!!!
Thats
what he does for a living, go google him and read up on what he does and what he has done to business.

Who is gonna pay my bills each month, as I make nothing on Etsy, I cant even afford to relist my 300 items, had to let them all sit on the sidelines, cause Im making no money.....AGAIN SELL THE DAM BUSINESS ALREADY TO SOMEONE THAT ACTUALLY HAS THEIR HEART IN IT FOR ----THE SHOP OWNERS!!!!!

Sellers Fume over Etsy Billing Changes   Sellers Fume over Etsy Billing Changes

by: SammyCat This user has validated their user name.

Wed Apr 18 08:56:04 2018

I absolutely NEED every penny from each sale to survive.  

March $300.00 - April $500.00  

IF they take the ALL the fees then I am short for the things I need to live and support a home.

I can handle a once a month payment because I budge, like I do for cable, hydro, gas, mortgage and insurance.

NO Etsy is not Amazon and if they had that kind of volume of sales, I might understand it ... BUT THEY DON'T HAVE VOLUME of sales and shops are hurting badly.

The search is screwed up.
They allow Chinese mass produced goods to compete with honest-to-goodness items.

Resolve all of that first for goodness sake - ensure that shops have a fair shot at making decent money instead of penny-pinching us so that 'they' make out OK and we're still struggling.

Like I said, I need every penny from a sale when I make it ...  NOT YOUR MONEY TO TAKE.

Sellers Fume over Etsy Billing Changes   Sellers Fume over Etsy Billing Changes

by: Sierra This user has validated their user name.

Wed Apr 18 09:10:26 2018

As I'm understanding it, Etsy is NOT going to be doing this the same as Amazon. Amazon doesn't bill for ANYTHING, but with Etsy's plan, there may still be a bill. I sell on Handmade @ Amazon and am used to the way Amazon handles financial things on my behalf; this DOES NOT mean that I like it, only that it's familiar. If Etsy were to do their billing the EXACT same way that Amazon does, I could accept that; but my impression thus far is that it's going to be a hot mess.

@Golddustwoman - Do you have a PayPal account? Etsy doesn't need anything in the way of personal information for Etsy Payments that you haven't already provided to PayPal. If you're selling just as well on Bonanza, you must not have been selling much on Etsy.

@FlyingChilders - Etsy won't be reaching into anyone's BANK account. SHOP account, yes ... but that money is still technically in Etsy's possession.

* * * * *

If you do your own bookkeeping with a spreadsheet, how will you record your Etsy expenses? Will you have a line item for each day you make a sale (and potentially another line item for what Etsy still bills you), or will you have one line item for the entire month? If I could wrap my head around the bookkeeping nightmare that I'm expecting, it might help.

Sellers Fume over Etsy Billing Changes   Sellers Fume over Etsy Billing Changes

by: Transferware Odds and Ends This user has validated their user name.

Wed Apr 18 09:12:21 2018

After reading some of the comments, some of you people need your heads examined! Seriously!, What cant you see, It just another CONTROL thing from Etsy.

If people pay their bills when they make a sale, right then and there, then you wouldnt have a big bill at the end of the month. I do, when a sale comes in, I may choose to pay the bill right then and their or in a few days at the latest, then I dont have a huge bill at the end of the month., this is why credit card companies are so in debit, cause people rack up their credit cards and then cant pay it at the end of the month, duh!!

Etsy has thousands of losers that wait until the end of the month and then they are waiting on thousands upon thousands of dollars., so just pay your bill when you get a sale, then none of this would have happened.

Etsy wants to show their shareholders they have millions in the bank, what better way then to go this route, wake up people, stop being so naive for gods sake!!!!

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