Etsy, the online marketplace, will be raising their seller transaction fees in July in an effort to bring new people to the platform.
Etsy will be making changes to their platform that will affect 2 million of its active sellers. Beginning in mid-July, the transaction fee that Etsy charges sellers for each individual sale will rise from 5% to 3.5%. This will also apply to the total cost of the sale and shipping. The company announced the changes on Thursday. When listing items for sale, Etsy will continue to collect a 20 cents-per-item fee from sellers, according to Fast Company.
Etsy has almost 35 million active buyers and in 2017, Etsy crossed $1 billion in sales — of which is bolstered by holiday sales.
The changes to the online marketplace are intended to bring new people to the platform. Etsy has constructed plans to execute this through digital advertising.
Josh Silverman, who has been CEO of Etsy since April of 2017, said that his team has spoken with more than 3,000 sellers in the past few months. The company has done extensive research on what the sellers value and “how they value it.” Silverman said that sellers have repeatedly asked for the company to invest more and bring in more buyers.
Etsy’s seller fees are lower than eBay or Amazon’s homemade units and that is still the case after Thursday’s announcement.
Etsy will also bring in a new audience through NBC’s reality competition show called Making It. Amy Poehler and Nick Offerman are the hosts who will offer guidance and plenty of laughs. Dayna Isom Johnson, Etsy trend expert, is one of two judges.
Every episode of the crafting reality competition will revolve around a central theme that’s inspired by nationwide trends in crafting and DIY projects, according to NBC.
Each episode of Making It, the makers will demonstrate their specialized talent via two projects. In the midst of each competition, the makers will share their creative insight and personal story.
Makers will showcase their craftsmanship and the competition will overall focus on the camaraderie of the crafting community.
As a result of the seller fee changes, Silverman said that he expected “some turbulence” in the seller community” according to Barrons.
There were many Etsy sellers who voiced their opinions with the higher fees on an Etsy seller forum. One seller said that the development was “rotting Etsy away to the core,” according to CBS News.
Following the announcement, Etsy’s stock surged to a record $42.71. So far this year, shares are up 29 percent.
Silverman said that they are unable to predict how everything will play out in the very near term. However, he said that he is confident that the changes made to the online marketplace is the “right thing to do in the medium and long-term.”
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