In late February, Kristi Cassidy took to Reddit and issued a call to action for people selling their products on Etsy.
A day earlier, Etsy announced that it would increase fees by 30%. For Cassidy, a seller of Gothic wedding dresses on the e-commerce platform since 2006, the decision felt like an insult to the small businesses that have kept the site running during the pandemic by selling their wares.
“I wonder what would happen if on April 11th so many sellers put their shops into vacation mode that Etsy started [a enloquecer]Cassidy wrote. “And then they have no choice but to negotiate with we”.
Cassidy’s Reddit post has launched a week-long strike by Etsy sellers that began on Monday. Thousands of Etsy sellers are putting their digital shops into “vacation mode” to protest the increased fees. An online petition outlining their demands had more than 77,000 signatures as of Thursday evening.
Etsy has 5.3 million active sellers on its platform, according to the company’s website.
The fee increase follows a tremendous period of growth for Etsy. The company has been a big winner during the COVID-19 pandemic as consumers cut back on trips to the store and flocked to online retailers. Etsy sellers generated $12.2 billion in gross merchandise sales in 2021, up from $5 billion in 2019.
Etsy, which is known for its handmade and personalized products, first saw an influx of shoppers looking for face masks. Now, Etsy is trying to bring them back to the site, while competing with other e-commerce players like Amazon or eBay.
Amazon is dando a paso para compensar sus crecientes costsos, anunciando que desde el 28 de abril agregará a “recargo por combustible e inflation” del 5% à las tariffas que cobra a los vendedores externos que utilizan los services de manejo y envío del gigante del E-commerce.
Etsy told investors in February that additional revenue from the fee increase would be reinvested in various company initiatives.
Raina Moskowitz, Etsy’s chief operating officer, said the company is “committed” to supporting sellers and helping them grow their businesses.
“We are always receptive to feedback from sellers, and in fact the new fee structure will allow us to increase our investments in the areas described in the petition, including marketing, customer service and removal of non-compliant listings. our policies,” Moskowitz said in a statement.
Investors and analysts who follow the company have applauded the rate hike and other recent changes. Guggenheim analyst Seth Sigman acknowledged that vendors are likely to bear the brunt of higher costs, but the changes should ultimately benefit “everyone on the platform” in the long run.
About 200 employees at Google and other Alphabet-owned companies announced the formation of a union at the company on Monday, after a year of organizing in secret, the trade union organization Communication Workers of America (CWA) reported.
“We appreciate the sellers’ concerns. It’s their livelihood,” said Sigman, who recommends buying Etsy stock. “But the tradeoff is that the company uses this as leverage to reinvest in the business. Our view is that this should ultimately lead to further market share gains.”
INCREASE IN RATES AND RESELLERS
Cassidy and other Etsy sellers interviewed by CNBC said they remained skeptical about whether the increased fees would translate into platform improvements. The company last raised its transaction fees in 2018 from 3.5% to 5%, and the gain was minimal, Cassidy said.
In addition to transaction fees, Etsy sellers must also pay listing fees, payment processing fees, and shipping fees. As part of the company’s offsite advertising program, Etsy sellers must also pay an additional 12-15% fee each time buyers make a purchase after clicking on an advertisement for their product.
“The recent increase in transaction fees, coupled with [otras tarifas]made it harder for small designers to make a profit and sustain their business,” said Marie Hart, who sells pins, charms and artwork in her Etsy shop.
As part of the week-long strike, Etsy sellers are urging the company to reverse the fee increase, allow them to opt out of third-party ads, and end a recently launched program called Star Seller which, in their view, puts undue pressure on sellers.
“As a small independent designer who designs and makes my products and clothes by hand, I waste hours of work and money on Etsy,” said Soudabeh Rouhandeh, who runs art and clothing store Sudibear.
Some veteran Etsy sellers are also calling on the company to crack down on stockists, who they say have sullied the market.
Since Alex Kittle became a seller on Etsy in 2010, she said she’s noticed an influx of mass merchandise and brokerages (known as dropshippers). The change seems out of touch with Etsy’s origins as a platform for showcasing one-of-a-kind handmade products that are often made to order, he said.
“En su mayor parte, me pareció una comunidad divertida y eclectica, con vendedores y compradores amigables, y un excelente lugar para llegar a mi tipo de clients (que a menudo son un poco nerds o tienen gustos alternativos)”, Kittle dijo in one email. “In recent years it has expanded to include larger companies, dropshippersresellers and even fraudulent stores”.
Etsy CEO Josh Silverman told sellers in February that the company hopes to devote more resources this year to removing listings that violate its policies. In 2021, Etsy spent $40 million to develop marketplace security-focused equipment and technology, the company said.
Nicole Lewis, who has been selling handmade pencils on Etsy for 15 years, said she disagreed with the principle of the strike. Etsy connected CNBC with sellers who did not participate in the strike.
Lewis said he doesn’t blame Etsy for raising transaction fees and that many of the recent changes were necessary for market growth.
“I think a lot of original sellers who are unhappy with Etsy still see it as the Etsy of 2004, 2005, 2006,” Lewis said. “It’s not that anymore and it can’t be. Not in the world we live in today, when there are so many people looking to sell their work and we’re competing with Amazon.”
ETSY SELLERS UNION
Cassidy said she didn’t expect the salespeople’s strike to take off the way it did.
But after reaching out to sellers during the strike and realizing they shared many similar concerns, she and other Etsy sellers began to consider forming a union.
“The crazy thing is, I didn’t even realize how many people agreed with me,” Cassidy said. “It’s been a huge, eye-opening experience just to see how all the other people who are on this platform are okay with me trying to make a living with me and how supportive my clients are.”
Etsy sellers aren’t company employees, but they hope that by banding together, they can better promote changes in the online marketplace. Several Etsy sellers have joined a Discord server where they intend to showcase organizing plans, Cassidy said.
Although Lewis did not participate in the strike, he said he supported the idea of a salesmen’s union. “Honestly, I think it’s a smart idea because people just want to be heard and recognized,” he said.
Etsy representatives did not respond to a request for comment on plans to unionize sellers.
Cassidy said she was inspired to organize Etsy sellers after witnessing recent union victories among baristas at Starbucks and an Amazon warehouse.
Worker activism has increased across the country since the start of the pandemic. The tight labor market in the United States has further strengthened support for unionization, and workers have seized the opportunity to demand higher wages and better benefits from their employers.
Since the start of the strike, Cassidy said she has been contacted by labor groups who have raised the issue of unionizing vendors. The next steps will depend on what the seller community wants, he added.
“We don’t know what to call it,” Cassidy said. “Is it a union? is it favorable vintage and “handmade”? What do you call this thing? What that looks like, we really don’t know, because we’re navigating uncharted territory.”