I have been talking about how challenging it is to make personal business decisions lately. One of the major ones is whether to leave Etsy, and I have decided that I will leave the platform. The biggest reason is because of the fees and SEO functionality.
1. Fees, Fees, and More Fees
Etsy sellers pay a lot of fees. Although the amount of fees is generally common knowledge, I found out it is worse than I thought. Etsy has fees for:
They list all of their fees and polices here, but the description is vague. I had to do some digging to find the exact numbers. When I did the math it blew my mind!
Listing Fees: This fee seems to be the most transparent on their policy page. For each posting it is $0.20 every four months. If a item has multiple quantities, the seller is charged $0.20 per item sold only when more than one of them sells. So far this seems fair. Considering the ease of set-up for a shop, the price for LISTING products is not bad. However, with the other fees, it all adds up.
Transaction & Credit Card/Gift Card Processing: Etsy charges a 5% transaction fee INCLUDING shipping. This fee does not include credit card processing. According to this article, credit card processing fees are 3% + 0.25 per transaction. Although high credit card processing rates are common, I do NOT think that this high rate on top of a transaction fee is fair.
Onsite & Offsite Advertising Fees: You can find Etsy's advertising and marketing policy here. For on-site ads, you set your budget. However, I did an experiment with Instagram and Etsy to see what advertisement was better. I paid $10.00 on each platform to advertise some dice bags I made (both leading to the Etsy post) and the Instagram brought in almost triple the traffic. I made no sales from Etsy ads, and two sales from Instagram ads. One person refused to buy from me in the comments (Instagram) because they did not want to give any money to Etsy. Maybe more money into ads would be more successful on Etsy but I did not want to give them any more of my money.
The real problem with Etsy comes with their off-site ads. Their off-site ads are an opt-out program (unless you make more than $10,000 annually), and it is hard to find the opt-out section. Here is an announcement about their off-site ads. For shops that make under $10,000, Etsy takes 15% of the sale when someone clicks on your ad on another site and then buys your product. Thankfully, you can opt out if you are in the lower income bracket. Etsy takes 12% of a sale if your store makes more than $10,000, which you cannot opt-out of. These fees for advertisement is on top of the others listed above! We will do the math in a moment for both situations in a moment.
Shipping Fees: Etsy's shipping policy takes more money from the seller. Other than the fact that the transaction fee INCLUDES shipping costs, they make their label system look enticing without being transparent about the costs. We all know that shipping is getting expensive, and the act of packaging items and then going to the post office can take more time than you think. Therefore, their shipping label creator is an attractive offer, but it costs a few more cents. They also charge a separate "shipping transaction fee," which is another 5%! Ah-ha! This fee seems to be part of their push to make people offer free shipping, which is not always reasonable. I will talk about the free shipping issue later.
Lets Do Some Math!!!
Okay, so what's the TLDR?? Let's break it down using an example. I make costumes and renaissance fair gear often, so I'll use my green elven cloak as an example (shameless plug.... I know), which costs $250.00.
Listing Fee: $0.20
Transaction fee: 0.05*250= $12.50
Credit card processing: 0.03 (250)+ 0.25= $7.75
Not considering the advertisement stuff or the shipping costs, I lose $20.45.
If someone clicked on an ad on google for the cloak, I would lose another $37.50
The best shipping I've found for this cloak would be between $15.00 and $22.00 and Etsy takes another $0.75 to $1.10 if I don't offer "free shipping," which is not always reasonable for this kind of product.
If someone found my store through google, I would lose a total of around $59.05, not including shipping. The problem with this price tag is that I am going to have to charge that loss back to the customer! I already have that cloak as low as I can price it, but on Etsy I have to add another $60 to make up for my losses. Yikes! If I use my Wix store I save more money, even though the up-front cost may be more. Wix Pos charges me 2.6% + 0, end-of-story. I lose a total of $6.50 (no, Wix does not sponsor me..... believe me, I've paid THEM). My website costs about $200 a year with all the bells and whistles to keep up and my domain costs like $5. Which I can easily make back and then some. I get to have a lot more fun with this website too!
2. They Push "free shipping"
Free shipping sucks for both you and me! If I charge free shipping I have to charge what I think is the maximum amount shipping (or flat rate) so that I don't lose money. If you buy my cloak an you live in Michigan, shipping is going to be less then Joe in Texas. You are paying for Texas shipping and you live in Michigan. I have to charge to make up for the shipping costs. Some things I make I have to ship as fragile which is even more money. In her video, Kara Buntin gives a real look at the issue.
If you DO NOT offer free shipping, Etsy puts you at the bottom of the advertisement list. So, it does not offer me much of a choice. I like having a choice. I can offer free shipping on a dice bag, but not on a heavy LARP cloak!
3. SEO, Creativity, Customer Outreach, Branding, and E-Mail Lists
Etsy does not give you much options for SEO, and you do not have much control over advertisement. The other problem is that when someone buys something off of your Etsy, they will tell their friends, "I bought it from Etsy" rather than, "I bought it form Cleric Cat Cosplay." With my website I can offer all the same shop mechanics as Etsy AND I can post blogs, send my customers emails, and control how and when I advertise.
Closing Thoughts
If you are a hobbyist who want something easy to set up and easy to maintain, Etsy may be right for you. As someone who is trying to make a living, it is not good. I would rather pay for Instagram and Facebook ads that lead to my website.
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