Etsy and the Same Old Internet Fights

Special for New York Times Infobae.

This week, thousands of people who sell items on Etsy staged a strike to protest the company’s increased fees. And what appears to be a fight for a small space on the internet is actually one of the most persistent battles in our digital world.

Etsy is one of millions of online businesses that connect people who sell products with those who might be interested in accepting the offer. For their role as a link between the two parties, these intermediaries charge a commission that can range from fifteen to 30% on each sale. (Etsy charges much less).

Techies call them eMarketplaces, and they’re everywhere. Most of Amazon’s online sales come from commissions the company charges independent merchants whose cat toys and cell phone chargers we find and buy on Amazon. The Apple App Store, Airbnb, restaurant food delivery apps, and Uber are also marketplaces that connect customers with people offering apps, houses for rent, dining out, or rides. at the airport.

It is a constant in the digital world that these intermediaries are hated by the people and businesses that depend on them. More often than not, at least some app developers, restaurants, Etsy dog ​​portrait makers, Substack newsletter writers, and other Marketplace sellers think the fees are too high, the rules aren’t fair, they’re mistreated. .. Or all of the above.

These conflicts may be unavoidable. In 2022, running your own business almost always means relying on technology intermediaries that make your business possible but can also make it difficult.

I recognize that in this dispute over Etsy, as well as Apple developers’ fury at the company and Amazon merchants’ dissatisfaction with selling in this massive digital mall, both sides are right.

There’s no denying that Etsy, Amazon, and Apple do a lot of work for people who sell products on their platforms. Without Etsy, people who do dog portraits would have to try to set up their own websites or shops and find clients on their own, and deal with things like credit card processing and customer service.

Etsy is doing all of this for them, for a fee that’s increased to 6.5 cents for every dollar of sale, up from 5 cents previously. Merchants who take issue with Etsy also have other disagreements with the company, including that it actually punishes solo business owners if they can’t immediately respond to potential customers and that the company forces sellers to pay. to advertise their products on sites like Google, Pinterest, and Facebook, which further eat away at your revenue.

Etsy said some of the company’s approaches may be unpopular at the moment, but will benefit sellers in the long run.

Sometimes these complaints can seem whiny or abstract, but let’s put ourselves in the shoes of those sellers on Etsy, restaurants that sell food through the Grubhub app, or companies that make iPhone apps.

They love being able to find a ton of customers in one place, but they may be annoyed that Etsy, Grubhub, and Apple dictate so much of how they run their business, take so much of their money, and become more powerful with their work.

These disagreements impact the prices we pay, and the stakes are high for the millions of people trying to make a living doing what they love.

A question that is always asked in disputes over online marketplaces is what is the fair rate they should charge people who offer an Uber ride or sell a dog portrait. But I also wonder if the imaginative tech industry hasn’t been imaginative enough to look for other ways to make money.

Almost all e-marketplaces charge a commission and often other fees when we buy something. Even in the metaverse, it seems, companies will continue to make money by charging a commission to those who sell VR items. Is there another way and would it be better?

A few years ago, a Goldman Sachs investment analyst suggested that instead of fighting developers, who might be unhappy to pay up to 30% of sales for a digital weapon in an iPhone game, Apple might recoup its application economy support costs in another way. Analyst Rod Hall proposed that developers pay for some or all of the Apple technologies they use to build and distribute iPhone apps.

This approach would certainly create a new set of problems. Plus, it doesn’t address complaints from iPhone developers or Etsy sellers, who love having a centralized place to sell their wares but hate that those marketplaces have so much power over their business.

There’s no silver bullet to the internet’s constant struggles with middlemen like Apple and Etsy. But I appreciate Hall’s attempt to reinvent the way markets generate income. It looks like we could use more experiments to try and bring peace to one of the internet’s oldest feuds.

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