Etsy's Offsite Ads program is problematic for a number of reasons - a big one is its unpredictability. Sellers can be going along paying Etsy 5% commissions, and suddenly they make a sale where the commission is 17%.
Some sellers are okay with this - if it works for their particular business model. But that leads to the second issue: Etsy Offsite Ads is mandatory for sellers making over $10,000 in gross sales on the marketplace. One-size-fits-all policies do not work across all categories for all sellers on a marketplace - why not let sellers opt in (or at least allow them to opt out)?
But it was something a seller pointed out on Twitter that is most troubling: the fact that sellers may be required to pay Etsy a 12% Offsite Ad commission fee on sales that the sellers themselves were responsible for generating.
I referenced this in my February 8th editorial when I discussed Etsy's request that sellers promote its marketplace on social media for Valentine's Day. Keep in mind that Etsy does not compensate sellers for sales they generate through their marketing efforts, nor does it give them a fee discount or referral fee in such cases.
Etsy seller @CindyLouWho_2 on Twitter warned sellers never to use social media to drive traffic to Etsy, tweeting that a buyer who clicks on a seller's post may later see an Etsy retargeting Offsite Ad - and if they purchase after clicking that ad, the seller would be charged the Offsite Ad fee. We can't confirm that's the case, but it seems quite likely.
This possible scenario hit home with me yesterday when I read a post an artist made on social media.
I follow the artist on Instagram, and when I saw her post (not an Etsy ad), I opened up a new tab and went to her Etsy store to browse.
Today, when I opened up my browser and went to a completely different website (wiki-calendar.com), it displayed a Google AdSense ad for Etsy, and it showcased images some of their items.
That's called "remarketing," and when I clicked one of the seller's images in the ad, it took me to their listing on Etsy.
Immediately I wondered whether Etsy would charge the seller a 12% Offsite Ad fee on top of the standard 5% commission fee if I were to purchase the item.
I have visited the seller's Etsy shop many times over the past few years, and I've purchased some of their items in the past.
I didn't pull the trigger yesterday to make a purchase, but if I seek out the seller's shop now or in the future, will Etsy take credit for the sale and charge that 12% Offsite Ad fee since I clicked on the Google Ad? If so, is it fair to do so?
I may be making another purchase from that seller in the future - but it leaves a bad taste in my mouth that Etsy might charge them an additional 12% fee if I do.
Etsy's hybrid model of commission fee plus offsite ad fee doesn't feel fair - Etsy should pick a model and stick with it, or give sellers more control over Offsite Ads.
At the very least, Etsy should not charge fees for retargeted ads. Do you agree?