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Sun Aug 4 2019 22:46:18

Sellers Now Pay Double Digit Fees to Online Marketplaces

By: Ina Steiner

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Sellers are paying more to online marketplaces than many may realize, a fact confirmed by an executive from a marketplace with some of the lowest *commission* fees around.

Etsy Chief Financial Officer Rachel Glaser revealed during a Wall Street investor conference in June that sellers pay Etsy 16.5% in fees, which she called "fair" compared to other marketplaces - it's not the lowest or the highest, she said.

Her statement may come as a surprise to readers who know that Etsy charges commission fees of 5%. But when you add the 5% of shipping costs that Etsy also charges, along with payment processing, shipping-label, and advertising fees, it clearly adds up!

Glaser acknowledged that some of the fees are optional, for example, promoted listings and shipping labels.

But if their listings aren't getting exposure, sellers may feel advertising their listings is the only way to generate sales.

Earlier this month, a reader cited concern over a report from Needham analyst Rick Patel who wrote, "We see Etsy capturing new buyers, generating higher sales with existing buyers, and improving its take rate from sellers."

That was concerning to read, the seller told us. "As an Etsy seller, I feel a bit overwhelmed with all the fees that have come about recently. "Take rate" sounds to me like another fee hike."

Etsy isn't the only marketplace looking for ways to generate revenue beyond listing and commission fees. What percentage of your selling price goes to the marketplaces on which you sell once you factor in *all* of the fees you pay them? 



Comments (23) | Permalink

Readers Comments

Perminate Link for Sellers Now Pay Double Digit Fees to Online Marketplaces   Sellers Now Pay Double Digit Fees to Online Marketplaces

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

Mon Aug 5 03:10:27 2019

The notion that Etsy takes a percentage of the shipping I charge, to pay for shipping labels IS A LIE.
I have never and will never use Etsy's labels.
And yet they continue to walk off with a piece of my hard earned income in a "shipping fee".....EVERY SALE.
They are NOT entitled to a Dime past listing fees and a MODEST ONE TIME ONLY fee on the transaction.
I see TWO FEES for "transaction" removed from my bottom line EVERY SINGLE TIME.

NEW NON CORPORATE ALL AMERICAN VENUE PLEASE.

Perminate Link for Sellers Now Pay Double Digit Fees to Online Marketplaces   Sellers Now Pay Double Digit Fees to Online Marketplaces

by: HappyOne This user has validated their user name.

Mon Aug 5 08:27:35 2019

After Ebay and Etsy complicated what had been a simple printing of shipping labels I started using Pirate Ship. Printing labels for ME  is easy there. Rates are same for all US packages; except they offer cubic rate which saves at least $1-$2 per Priority package over Ebay’s and Etsy’s discounted rate. I do not ship Internationally but have been told PS rates are very good. Ebay and Etsy order shipping details are imported; USPS tracking is automatically entered into Ebay and Etsy (no extra work). Another bonus for me is I am able to charge labels to my credit card and get  points along with one big detailed shipping total for the month. Another good thing I can use PS for off Ebay and Etsy shipments. It is satisfying to ME that Ebay and Etsy is losing a little of their vigor/fees due to changing things just to change things.

Perminate Link for Sellers Now Pay Double Digit Fees to Online Marketplaces   Sellers Now Pay Double Digit Fees to Online Marketplaces

by: purpleiris This user has validated their user name.
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Mon Aug 5 09:22:13 2019

While payment processors charge a fee on the total amount, including shipping, I know that's because credit card companies charge on the total amount. Etsy does the same when payments are processed through their payment system.

So, for Etsy to charge an additional 5% on shipping should be illegal. They're basically charging another fee on something that sellers don't profit from and for no other reason than to take a bigger piece of our pie -- their take rate. It causes shipping to be even higher than it already is.

It used to be illegal to charge higher rates on USPS shipping and I'm sure it still is. All the contracted USPS sites and other stores allowed to sell stamps must charge what the USPS charges. They cannot tack on any additional fees for the service. So, since Etsy offers commercial base rates to its sellers, they shouldn't be charging anything on shipping beyond what the USPS charges.

While they're charging that 5% separately from the shipping labels, they are still charging an additional 5% on USPS shipping rates. Same goes for other marketplaces that charge an FVF on shipping. eCrater is the only marketplace I sell on now and they don't charge anything extra on shipping.

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

Mon Aug 5 10:45:36 2019

BTW :
You haven't "Lived" 'til you've paid a steady 3 digits a month in "fees".

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This user has validated their user name. by: toolguy

Mon Aug 5 11:28:45 2019

eBay fee's last month 9.96%

Paypal's .30 + 2.9% = out to be about 5%

So I'm at 15% total for selling online, I think that's in line for on line. . . .

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by: shut1968 This user has validated their user name.

Mon Aug 5 13:33:49 2019

Amazon - 24%-29% when you total everything up

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by: shut1968 This user has validated their user name.

Mon Aug 5 13:35:00 2019

Combine that with having a rush to the bottom with almost every item it makes profit on Amazon as minimal as it could be.

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This user has validated their user name. by: RKTOYS

Mon Aug 5 15:28:57 2019

That's what I found too.  Since shipping costs what it costs, you take the 15% charged against it and add it to the 15% charged against the item to get your real fee rate.  So, for example, take a $20 item that costs $10 to ship.

On eBay, that's $2 against the item, $1 against the shipping, 30c fixed, and $1.20 against the transaction...$4.50 or 23%.

On Scamazon, that's $3.75 against the item (includes shipping the voucher doesn't cover), 99c fixed, and 45c against the meager $5 shipping voucher...$5.19 or 26%.  If you count the signature confirmation fee, without which all A2Z cases are automatically ruled in the thief's favor, the take rate jumps to $7.19 or 36%.

Yeah.  No wonder the place is flooded with Chinese trinkets like cellphone covers.  The only way you can sell toys with such a high take rate is to specialize in vintage collectibles, sit on modern stuff until supply dries up, or shoplift I guess.  None of those really fit with what I'd consider a "normal" retail business plan.

I keep the eBay account going just to have some cash flow between live toy shows.  It rarely makes me any actual money.  But its better than the alternatives available at this time.  Honestly I would tell anybody not in some metro area of CA, TX, or NY to not even bother getting into the market.  When this is all said and done, I expect I would've done better collecting interest in a savings account.

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

Tue Aug 6 16:17:32 2019

RK Toys- you really nailed it.  I buy and sell, mostly on Etsy and Ebay.  Even though I am in NY and have a sales tax certificate, Ebay is refusing to accept it so that I don't have to pay sales tax on items I buy to re-sell in one of my shops.  (including brick & mortar).

So now my fees to purchase have gotten over 8% higher on top of all the other fees when I go to re-sell the item.

The only thing that comes close to online fees for my handmade shop items are local art galleries that charge 40-50% commission.

If things keep going the way they are on Etsy, I soon will have no choice but to start shutting it down.  I'm still sitting on a lot of inventory that will have to go for whatever I can get.  Not a pleasant thought.

Perminate Link for Sellers Now Pay Double Digit Fees to Online Marketplaces   Sellers Now Pay Double Digit Fees to Online Marketplaces

by: mcposty This user has validated their user name.

Wed Aug 7 05:54:42 2019

The fees on shipping and taxes need to be legislated. Its pure theft

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by: Whatever This user has validated their user name.

Wed Aug 7 11:00:01 2019

Personally (don't hate me) I'd be thrilled to pay ebay 30% on everything I sell.  Here's the deal - no store fees - no listing fees - no FVF - ebay gives me the label - one flat 30%. At least I'd know right up front what I'm paying. I know - never going to happen.

How'd I come to that? Well for those of us still living in the real world with B&M's How much is your overhead? More than 30% for sure.

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by: purpleiris This user has validated their user name.
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Wed Aug 7 23:01:53 2019

@Whatever...a marketplace doesn't need to charge 30% on every transaction to cover its 30% of overhead costs. It's like selling the same item multiple times. You still only need 30% from the first transaction to cover your overhead.

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by: Lisa This user has validated their user name.

Thu Aug 8 03:51:52 2019

we charge 50% for consignment( which is average for B&M), so 30% is a bargain

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by: rover This user has validated their user name.

Thu Aug 8 06:02:35 2019

The marketplaces have become so greedy and complex nowadays that its no wonder business is increasingly moving onto social media.  

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by: marty This user has validated their user name.

Thu Aug 8 07:34:05 2019

pirateship.com rates for international packages are ca 30% less then ebay/stamps.com:
package:
8 oz: Pirate: 9.95,  Stamps: 13.50
16 oz: P: 15.95, S: 22.80
32 oz : P: 17.95, S: 22.80
33 oz: P. 23.95, S: $35.60

Stamps.com rates are from a few months ago, may not be 100% current, but if they changed they went up. Ebay's rates are similar

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by: Moonwishes This user has validated their user name.
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Thu Aug 8 09:04:14 2019

Well, with folks like Wenig getting paid millions of dollars plus stock options to run eBay there is no wonder that the fees on eBay are so bad. Same with Amazon. Wenig needs to try to support his family and the jet on his own buying and selling for a month. A lot of things would change quickly!!!

I got an email yesterday from a seller that I have bought from in the past that sells on Etsy telling us she has opened her own websites and for now is keeping her Etsy store open until her website picks up the business, she will close it as quickly as possible. She admitted that the nonsense that Etsy has been doing is causing this change for her business and not the, "Oh I think it is time to have my own website idea." I wrote to her to encourage her in this change.

Perminate Link for Sellers Now Pay Double Digit Fees to Online Marketplaces   Sellers Now Pay Double Digit Fees to Online Marketplaces

This user has validated their user name. by: Fly on the Wall

Thu Aug 8 09:30:20 2019

This is one reason I'm planning  on renting a small "booth" space at a B&M here in town to sell my items. All work with free shipping and no sales makes Jack a dull boy!

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by: Disgusted This user has validated their user name.

Thu Aug 8 11:22:49 2019

Etsy, Ebay are working in the wrong direction.  They went public so now they have to keep stockholders happy-no one else.
Etsy copies ebay, ebay copies Amazon.  The amazing thing is that ebay was the first-had everyone going to their site. Amazon was a bookstore at first.  Ebay SHOULD have had stock prices where Amazon is. BUT they wanted immediate gratification. Got greedy. More importannt they did not hire anyone who new how to run a site , an ecommerce site, like ebay.  They were more concerned how to get every penny by any means possible.
Now you see etsy doing the exact same thing. They started out with a good idea BUT blew it bigtime.  Selling chinese crap as handmade because one person designed it-give me a break. The forgot the roots of the company.

Perminate Link for Sellers Now Pay Double Digit Fees to Online Marketplaces   Sellers Now Pay Double Digit Fees to Online Marketplaces

by: Pamela Siegel This user has validated their user name.
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Thu Aug 8 17:33:08 2019

That's why I still like selling on Ruby Lane after 10 years. Predictable flat fee each month (equates to 10% or less for me) and the more I sell the more I save. I set my own policies including whether or not I charge for shipping. And, they're still focused on supporting vintage and antique sellers. I still sell on eBay, too, but consistently have lower fees on Ruby Lane and consider it to be my ''home base.'' Email me if you want to know more about selling on RubyLane.com. All questions are welcome.  

Perminate Link for Sellers Now Pay Double Digit Fees to Online Marketplaces   Sellers Now Pay Double Digit Fees to Online Marketplaces

by: SellerGirl This user has validated their user name.

Thu Aug 8 18:54:40 2019

Marty, those seem like astonishingly high prices for small packages! Doesn't sound like Pirate is right for me. Right now I pay around $4 for an 8 oz package.

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