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Wed July 11 2018 21:33:15

Etsy Seller Lets Off Some Steam

By: Reader

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Dear Ina,
I am struggling to understand the rationale behind Etsy's new policy regarding their increase of fees beginning shortly. They are changing their policy to collecting transaction fees to include items sold and shipping charged.

Shipping? Really? Turns out, it's not the increase from 3.5% to 5% that will be the real money maker for Etsy, it's the change to "entire transaction."

While I can rationalize the payment processing fee charged on the entire purchase, a charge of 3% + $.25 per transaction, I cannot understand profits being made by the merchant of record on shipping as that portion is not part of the merchandise sold.

And I am struggling to find references as to this practice per U.S. law. It's possible that this is common in all online marketplaces, but as I have not engaged in selling with any other I have not come into contact with this.

While doing analysis on my many Etsy reports available, I discovered that Etsy currently, and presumably will continue, charging a transaction fee on EACH item and not on the total transaction. What happens in this is that the fractions of a penny for the transaction charge is rounded UP for each item. While this is only a few cents per total transaction cost - it is a buried windfall for Etsy.

Onto another item:

Since my shop is now approaching the 1099 threshold and I have brought an accountant on board to do my books, I saw that Etsy has a Quickbooks for Etsy product. So last week I gave it a try, after all, my new accountant uses Quickbooks & I thought it would be an easy solution to give her the Etsy data in one tight package.

It's pretty easy to set up, at first glance. Then, I discovered that upon initial set-up the program will only import up to 90 days of data.

No problem, I soon figured out how to import my reports for the months leading back to January 2018.

But then, I discovered that all of the totals and charts being presented were based solely upon the reports listing the Card Processing Fees. Etsy keeps their Transaction Fees, which include all of the listing fees (of which there are many,) on a separate report. OK - I had  already figured out how to import the Etsy reports. So I attempted to import the rest of the Etsy reports to get the full picture of the fees I'm paying through Etsy.

Only, the way that Quickbooks for Etsy has been built out they have an drop-down box selections for only four columns of data, of which none of the four choices relate to the Transaction Fee reports, and there is no way to easily modify this without having some programming knowledge.
So, I did an online chat and backed out of my purchase of the Etsy for Quickbooks product. Within less than an hour of use.

See, in that product, Etsy is telling you just how profitable you've been, how much in taxes you'll owe, and providing all kinds of fancy charts & analytics. BUT...it's not taking all of the financial data to do these comparisons. So of what value is it?

Now, Etsy is about to make many changes, so it's possible that this will be corrected. According to my online chat person, the issue I brought up was going to be referred to their technical staff. I'm sure this will be corrected, aren't you?

OK - I'm climbing down off my soap box now. 
Thank you.
Char




Comments (22) | Permalink

Readers Comments

Etsy Seller Lets Off Some Steam   Etsy Seller Lets Off Some Steam

by: traciking This user has validated their user name.

Thu Jul 12 00:39:31 2018

I really don't see the problem.  Etsy hasn't raised fees since it began.  I don't know of any company that would survive for very long without raising prices.  As soon as they do they are bombarded with complaints.  Of course sellers don't like it.  They were not meant to cheer fee raises, but my goodness be a little less hysterical.  Etsy is still the cheapest online marketplace for sellers.

Etsy Seller Lets Off Some Steam   Etsy Seller Lets Off Some Steam

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

Thu Jul 12 02:11:11 2018

I have no clue what etzy charges it sellers, but it has to be more than eCRATER charges. eCRATER  IS an online marketplace. Since even back in the days that I sold on ebay I did my own promotions, I have no problems continuing promotions of my goods that I have for sale on eCRATER. I have a steady business there and I don't think I have had $13 in fees in one month since they started charging them dependding on where your product sold from, the eCRATER marketplace or your own store. And you can choose how much in fees you will pay depending on how much marketing you want eCRATER to do for you.

I set up my own worksheets in Excel to track all costs including venue fees and PP/Stripe/Amazon fees. Easy to track yourself and no need to pay for additional software.

Etsy Seller Lets Off Some Steam   Etsy Seller Lets Off Some Steam

by: rover This user has validated their user name.

Thu Jul 12 05:05:44 2018

It is NOT the rise in fees that most sellers are mad about but the cash grab on SHIPPING!

Its true that Etsy has not raised fees in many years and is probably still the cheapest market place to sell on. A rise in fees has been expected for some time and we do not dispute the fitness of that on the basic services which Etsy provides.

What sellers dispute is to raise these fees on shipping - a service which Etsy does not provide and takes no responsibility for. Their smoke and mirrors corporate speak excuses this cash grab on the grounds that ''some'' sellers were charging excessive shipping to avoid paying fees. However the majority of sellers like myself charge what the post office costs, and refund any significant overage for combined orders.

Arguing that ''this is the norm'' and ''other market places do this'' is like the old adage of ''If I put my hand in the fire will you do the same?!

Just because another dishonest company charges for shipping does not make it right or fair to sellers or buyers.

So Etsy is using a weak and dishonest set of excuses for their cash grab.

It is buyers who will ultimately pay more as sellers raise their shipping and/or item prices to account for this greedy cash grab. Many sellers are now planning to incorporate shipping into the (raised) item price and offer ''free'' shipping. So on a combined order the buyer is paying x times over for shipping and does not know the true cost.

International shipping fees are already high, and this ill thought out decision is going to hit hardest  at international sellers. So we will be robbed to a greater extent than US domestic sellers.

YET WE PAY THE SAME FEES!

Etsy has already instituted search manipulation policies which have devastated many small shops based in countries outside the USA. They have introduced a deeply corrupt and much hated ''localization'' policy whereby buyers only or mostly see shops in their own country, unless they choose certain search filters.

Yet we international sellers PAY THE SAME FEES!

Etsy is no longer a global platform and has no right to pretend it is such.


Etsy Seller Lets Off Some Steam   Etsy Seller Lets Off Some Steam

by: angryllama This user has validated their user name.

Thu Jul 12 05:47:34 2018

Final Value Fee on TOTAL price paid by YOUR customer to YOU is what has been the policy on eBay for YEARS and YEARS.  

Hold your brickbats.

I am here to TESTIFY that there were PLENTY of eBay cheats who were pricing $20 items that should have had $5 postage as  $5 item with $20 "shipping fee". My worst examples made THAT one look minor.  A commercial kitchen supply company out in Garden Grove, CA was listing $850 commercial 4-burner gas ranges as $10 with $900 shipping and REFUSING any offer of LOCAL PICK-UP or allowing the buyer to SELECT which LTL shipping company to use.  Even Rolling it out the door and into a LOCAL buyer's own truck would have cost $900 no ifs ands or buts. By the way from Garden Grove to Baton Rouge a DELIVERED price of $910 would still have been a good deal as shipping a 400 plus pound commercial appliance on a boxed Skid would NOT be cheap.
Whatever ELSE ETSY might choose to change, this one would have been OBVIOUS to a BLIND MAN right from the get-go. Let us not forget that in addition to SAVING on Final Value Fee by minimizing the product price and EXAGGERATING the shipping the seller would also be refunding ONLY on the price of the item purchased in MANY if not ALL cases.

Etsy Seller Lets Off Some Steam   Etsy Seller Lets Off Some Steam

by: HappyOne This user has validated their user name.

Thu Jul 12 06:47:09 2018

I agree the new 5% on shipping is not ''Etsy'' like but out of Ebay's gotcha fee book. If  Etsy had problem with sellers avoiding fees by padding shipping the could have policed it by comparing charged and paid shipping as most of the sales on Esty are shipped using Etsy labels. The 3.5% to 5% FVF would have been acceptable by itself.
I have moved many accepted low priced items to Esty from Ebay because the Ebay 10% FVF did not make them worthwhile to buyers. I have had good sales of these craft supply and vintage items on Etsy. I just completed adding the increase of ALL Etsy fees into my selling prices. How many new sales will I lose?  It is a cost of doing business that is paid for by the buyer. If price is too high they will not continue to buy.
The new Esty $20 a month ( six month $10 promotion) ''PLUS package'' is really undefined and seems worthless to me.

Etsy Seller Lets Off Some Steam   Etsy Seller Lets Off Some Steam

by: Chicago48 This user has validated their user name.

Thu Jul 12 06:57:40 2018

Obviously, this seller  doesn't realize that she can use the USPS and paypal.com/ship now to ship her goods.  She can bypass using Etsy postage (just as we can bypass using EB postage) and not be charged for shipping.  Plus, all sellers must realize that the shipping charge EB and Etsy charges is for using PITNEY BOWES software.  Look at your postage stamp.  It's being printed by PITNEY BOWES.  Obviously the two parties are splitting the fees.

Etsy Seller Lets Off Some Steam   Etsy Seller Lets Off Some Steam

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

Thu Jul 12 08:16:07 2018

I don't think I can explain it, but when the article being sold has gone up in price and the percentage fee goes  up, that is a double increase.  

Same for salary increases...If worker-bee makes $10 and boss makes $100, and there is a 1 percent increase, the boss will get a larger raise.

Next year, when there is another 1% raise, the boss will again get a larger raise, PLUS  a raise on last year's larger part

I have to figure this out with stubby pencil to see it..and cannot explain it.  

But I do know that the gap gets larger and larger.......
.

Etsy Seller Lets Off Some Steam   Etsy Seller Lets Off Some Steam

by: fusgeyer This user has validated their user name.

Thu Jul 12 09:45:19 2018

First point on this shipping. Etsy's current CEO is former eBay. We can expect more eBay-ish policies to come. Etsy's increase in fees was to be expected. Including shipping fees with the increase is industry standard. Most other big online sites do this. Yes, it is a cash grab. In reality there is nothing sellers can do about it. Either you pay or you dont use the site.

What this means to the customer. It means higher prices. The honest Etsy sellers work on small profit margins. They cannot handle the increase to 5% without passing it on to the customer. Wil it hurt smaller shops--yes. Larger ones too.

What I think will hurt sellers more is the collecting of all Etsy fees at the time of the sale. Etsy is going to pull all outstanding fees plus whatever fees are associated with the current transaction from every sale. This reduces a sellers ability to manage cash flow. Those who use a PayPal business card to pay their Etsy fees will see a huge reduction in the amount of cash back they get from using that card. Same thing for those who use other reward cards. This policy is good for Etsy, but not so good for sellers. It is another cash grab. It improves Etsy's cash flow by reducing the number of past due amounts. It will put struggling shops out of business. Etsy will get their money before the shop gets theirs.

Etsy Seller Lets Off Some Steam   Etsy Seller Lets Off Some Steam

by: Chicago48 This user has validated their user name.

Thu Jul 12 09:54:04 2018

"by: traciking This user has validated their user name.
I really don't see the problem."
I agree with this.  Look folks we are "renting" space on these platforms.  They have staff to pay.  They are worldwide and have to make PROFIT.  I don't have a problem with raising fees and taking a cut of shipping because I am using their postage software!  If I didn't want to use their software I would use the USPS.com software!
We need to stop whining.  Open your own store front.

Etsy Seller Lets Off Some Steam   Etsy Seller Lets Off Some Steam

by: semper fi This user has validated their user name.

Thu Jul 12 09:56:42 2018

once etsy started hiring all the former ebay reject employees the handwriting was on the wall

Etsy Seller Lets Off Some Steam   Etsy Seller Lets Off Some Steam

by: cvsharkey This user has validated their user name.

Thu Jul 12 10:08:43 2018

Gee, I thought I was presenting this is a very logical manner, but some people read "hysteria" into it. At any rate. I did try buying my shipipng via PayPal instead of Etsy. However, since I can't refund the shipping fee to my customers & then invoice them for it through PayPal--it kind of defeats the purpose if Etsy is going to charge transaction fees on the entire amount (then, Payment Processing fees...but that's another issue.) Want to get to the REAL cost of doing business on Etsy? Then you need to add all of the fees associated for each item you've sold. Etsy splitting up reports makes this nearly impossible. The Transaction Fee report does not include order numbers, for instance. Whereas, the Payment Processing Report lists per order number.) As my customers usually purchase multiple items in an order, this is a logistics nightmare.  

Add to your overall costs: The number of listing fee charges you paid for the item prior to selling it. And, if you're relisting the item for sale, don't forget to add that charge to the next time you sell the item.

$0.20 + (5%) + (3% + $0.25) - (Cost of Materials + administrative materials + trips to the PO + labor making your stuff) = Anything left?

Oh yeah, and Etsy is pushing, pushing, pushing for FREE Shipping. Now that's one way to avoid that fee on shipping.....  

Etsy Seller Lets Off Some Steam   Etsy Seller Lets Off Some Steam

by: FREDDY This user has validated their user name.

Thu Jul 12 10:19:32 2018

Anyone else notice Etsy stock doubled after the new fee and collection policy??   That in itself was the reasong for the change.

Etsy Seller Lets Off Some Steam   Etsy Seller Lets Off Some Steam

by: Barbbie This user has validated their user name.

Thu Jul 12 10:41:26 2018

I will like having all the etsy expenses taken out before I get the money.
I am sorry for those who have such high etsy bills that it makes a difference in their reward dollars.
I suggest using stamps or other shipping than etsy to get some of that back.

Etsy Seller Lets Off Some Steam   Etsy Seller Lets Off Some Steam

by: a_c_green This user has validated their user name.

Thu Jul 12 10:47:14 2018

eBay has been pulling this same stunt for years now: charging their percentage on the entire buyer payment, even though a portion of the Shipping charge goes to postage, a seller expense, and is not seller income.

Yes, I know all about the $1 iPods with $300 Shipping that forced eBay to start charging their percentage on the full amount, but when the cost of postage (the actual postage expense, not the "Handling" charge) is not deducted from the total first, then sellers of heavy objects end up paying more in fees than sellers of light ones. One correction, deducting postage paid before fee calculation, can level the playing field for everyone.

For example, a $50 watch might cost $3 in postage, but a $50 bowling ball might cost $20 in postage. The first seller pays fees on a $53 sale; the second seller pays fees on a $70 sale, and yet in both cases, they only took in $50. If you deduct the cost of postage from each sale first (which is easily done if the seller is printing the Shipping label through eBay/PayPal), then each seller ends up paying the same fees on a $50 sale... which it was.

This correction works even for Free Shipping items: a $50 watch seller paying $3 for postage actually takes in $47. A $50 bowling ball seller paying $20 for postage actually takes in $30. In both cases, deducting their respective postage charges leaves them with an accurate fee for their sale, the money they actually took in.

Finally, any seller who's still trying to gouge buyers with $300 Shipping charges will still be paying his fair share of fees on the money. Only the actual postage purchase would be deducted when he prints the label on-line.

Yes, this correction of deducting postage paid from the buyer's payment would not work for those sellers buying their postage over the counter, but they're already paying full retail that way in the first place. This would act as a further incentive for them to save money by printing their labels through eBay/PayPal instead.

We have debated this endlessly with eBay until we're blue in the face, and in one particular Weekly Chat, they did concede the issue, but also said that they were not going to do anything about it, so that was that. Obviously, doing so would reduce their income, making that fix a near-impossible sell to higher-ups, but I also have some suspicion that they didn't want to risk having their programmers attempt that correction, and end up making things worse.

Etsy Seller Lets Off Some Steam   Etsy Seller Lets Off Some Steam

by: SammyCat This user has validated their user name.

Thu Jul 12 10:49:48 2018

What people are missing is that its not just a simple fee increase its actually doubling the cost for anyone outside of the US.  We are charged in US dollars which is an extra 30% or thereabouts on any given day.  We are already paying almost 10% compared to our US counterparts for listings, sales fees and extra for processing. Consider that this will not include 5% US on shipping costs.

They are not getting the point that if you are outside of the continental US, your shipping rates are huge -- anything over $100 MUST be sent either Expedited or Express to quality for insurance and tracking.  A small packet that requires this is automatically over $24.00+ depending on weight and destination,  then add insurance on top of that which is $2.50 / hundred.

Basically, anyone selling higher end goods or items that are larger and heavier are being penalized.  

IF my shipping cost for an expensive or large item is say $60.00 (real costs by size, weight, destination and value) they're making a killing on our shipping costs.  

I shipped a mirror - large, heaving and antique.  It cost $425.00 to ship so figure out how much etsy will make and how much I will have to eat.  We who sell expensive or larger items can only charge so much without pricing ourselves out of the market.  

IF you're selling smaller, lower cost goods then not a big deal overall.  NOT so for antique, expensive or large items leaving the country and being shipped internationally.  

Some of the higher end shops are already talking about leaving because they can't absorb these fees, they can't hide them in their prices and they can't lose money.  

While not illegal, but it is certainly not ethical

Etsy Seller Lets Off Some Steam   Etsy Seller Lets Off Some Steam

This user has validated their user name. by: iheartjacksparrow

Thu Jul 12 11:32:13 2018

Regarding keeping track of sales, since I only sell on eCrater, I use the spreadsheet in Open Office (free to download). I have each sale listed as follows: date of order, item description, total buyer was charged, price of item, postage charged, tax collected, Stripe fee, refund issued (if any), tracking number, postage paid to USPS, my cost for item, and city and county (for California sales). It makes doing my tax returns super easy.  

Etsy Seller Lets Off Some Steam   Etsy Seller Lets Off Some Steam

This user has validated their user name. by: Rexford

Thu Jul 12 11:52:13 2018

"I cannot understand profits being made by the merchant of record on shipping as that portion is not part of the merchandise sold."

THEY WENT PUBLIC.  THEY ARE GREEDY!  THEY CARE ABOUT THEIR C-SUITE OFFICERS COMPENSATION AND THEIR SHAREHOLDERS. THEY STOPPED CARING ABOUT THEIR SELLERS THE MINUTE THEY WENT PUBLIC.

Etsy gained popularity because THEY WERE NOT eBay.  They are now emulating eBay.  BIG MISTAKE!

You think it's bad now?  Keep packing SCOTUS with hard core conservatives and see what it gets you.

Etsy Seller Lets Off Some Steam   Etsy Seller Lets Off Some Steam

by: mcposty This user has validated their user name.

Thu Jul 12 12:41:20 2018

Dont say consrvatives..say republicans. Republicans and democrats obly do whats best for their lodge buddies.

Im conservative but neither repub or democrat and i would instantly slap venues with fines for putting fees on shipping cost only bevsuse its a true scam.

If they were so co cerne about over charging for shipping..there are myriads of ways to fix that issue.. their lies are illegal and they deserve prison time. This is only about fetting more money per transaction.

Etsy Seller Lets Off Some Steam   Etsy Seller Lets Off Some Steam

by: Carol Is Here This user has validated their user name.

Thu Jul 12 15:11:47 2018

Wenig II runs Etsy lol.

He is just as bad as Wenig, but he just can't do as much harm. Yet.

Etsy Seller Lets Off Some Steam   Etsy Seller Lets Off Some Steam

by: Carol Is Here This user has validated their user name.

Thu Jul 12 15:13:33 2018

It is confusing to me as to why people think Wall Street interests only buy off Republicans. Just as many Democrats are bought, and Wikileaks revealed it to the world.

That is the problem. The deck is stacked.

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