Why I moved away from Etsy.
Hello lovelies! It's been quite a while since I posted anything more creative business related here, and there's a good reason for that: I've been incredibly hard at work behind the scenes to get my new design & project bag website hlh-designs.com out into the world.
Now that the bulk of the initial push out the door is done, I finally have a bit of time to sit in my favorite corner café and write up a few long overdue blog posts. Before we go into the depths of today's one though I have a little thing to ask: Would you help me spread the word about the new website? I'm incredibly happy about it, especially because it finally allows me to be A LOT more transparent about my business, and it would be absolutely wonderful if you checked it out and forwarded it to a friend of yours or talk about it on Instagram or your newsletter. Any mention helps!
Now on to today's topic:
Why I moved away from Etsy.
Quite a few of you have asked me over the past couple of weeks after I announced the new website project why I decided to leave Etsy. There's not one easy answer to this so I'll do my very best to dissect the multiple reasons that led my to opening my own website here:
Etsy is expensive. REALLY expensive.
If you run your own Etsy shop, you know that Etsy costs money - if you don't, here's a quick overview of what Etsy charges merchants:
- A flat fee of $0.20 per item for each item listed -> this used to be only $0.20 per listing, but they changed this some time during the last year so that now you really pay it for every. single. thing you sell through your Etsy shop.
- A 3.5% transaction fee for each item sold -> every time you sell something on Etsy, Etsy takes 3.5% of the price of the item sold (not of the shipping costs & taxes).
- A flat fee of €0.30 for each order -> again, every time you sell something on Etsy, Etsy charges you a €0.30 flat fee for payment processing. This fee (and the next one) vary according to which country your bank account is located in; these numbers here are for Germany.
- A 4% Etsy Payments fee for each order -> in addition to the flat payments fee, you also pay 4% of the total sale price (which includes both shipping & taxes) to Etsy for processing payments
All in all, this amounts to roughly 10% of my monthly revenue that I pay to Etsy in various forms, be it through listing or payment fees. This is A LOT.
For comparison: With my new website on Squarespace, I'm paying €24 per month for the "Business Plan" I'm running on. I don't pay any transaction fees to Squarespace. I only pay the payment fees of the payment provider my customers decide to use (Stripe for credit card payments or Paypal) which ranges between 2.9% and 3.5%.
Quick back of the envelope calculation: Until I make €480 of revenue per month, Etsy is cheaper than Squarespace. As soon as I hit that €480 mark, Squarespace is cheaper - and comparatively gets cheaper and cheaper with each additional order as the €24 fixed fee gets distributed across all orders. I've made more than €480 for every single month of the past 10 months, so that was an easy choice.
There are two other things that piss me off about Etsy's fees:
- The intransparency. There is not a single place in either the Etsy Seller App or Etsy itself where you can see all fees consolidated. Etsy does a marvellous job at hiding how much you actually pay them by splitting the way they get paid between you paying an invoice directly and them keeping a part of your monthly sales. As far as I can tell, the only way to properly add up all the fees incurred during a given month you have to painstakingly download multiple CSV files and consolidate them.
- The profit they make with Etsy Payments fees. Etsy Payments - the payments service you have to use when you're an Etsy seller - runs on Adyen infrastructure. Adyen is a payment service provider which means that they connect Etsy with banks and credit card companies to process the customers' payments. Their prices for this service are completely transparent on their website - you can see them all here. They depend on which payment method is used by the customer, but a bit simplified it comes down to this: Adyen charges €0.10 + an average of 0.90-1.10% of the transaction value for credit card payments; slightly more for other payment methods (for Paypal for example it's €0.10 per transaction plus a contract with Paypal itself). Just as a reminder: Etsy itself charges €0.30 and 4% - which is €0.20 and about 3% MORE. And I would bet that they get even better prices with Adyen due to the processing volume they have. Which consequently means that Etsy puts the majority of the payment fees they charge every single Etsy seller into their own pocket. And that just makes me incredibly mad - especially when you take into consideration that Etsy forced all sellers to join Etsy Payments a few months ago. Don't get me wrong - I love paying for good services, but I'm ALREADY paying for Etsy's services with their own Etsy service fee of 3.5% of every transaction. Adding a whopping 3% of direct profit to their pocket is not what I signed up for.
Etsy is becoming just another marketplace.
As I said at the end of the last paragraph: I'm happy to pay for good services. I'm even happier when I can pay a company that really feels like it wants to do good and change the world for the better. For a few years, Etsy has felt like that place which is why I was happy to support it even when I felt that it was too expensive for the services it offered.
With the changes to Etsy leadership last year and the subsequent adjustment of their strategy, Etsy is fast, very, very fast, moving away from that. (I highly recommend reading through Abby Glassenberg's blog posts about this topic which you can find here if you want to get up to speed with everything that's been happening at Etsy over the last year.) Their primary focus now seems to be making money - and not for the sellers, but for themselves. While I do understand that from a very profit-centered business perspective, it's not something I want to support any longer.
Etsy doesn't allow me to tell our story the way I want to tell it.
The third reason why I've been wanting our own website for the better part of a year is that I wanted a place to tell our story. I wanted a place where I could write about transparency and why it matters to me to share all our suppliers, where I could show you the faces and stories of our team, and where I could share the thought process and inspiration behind all the collections.
Etsy is not that place. It's infrastructure is good for setting up a shop, but nothing more. No space for a blog, for more extensive process pictures - and yes, there is Pattern (Etsy's own website solution), but really? I've only heard bad things about it, and then I could just as well use a platform I've been using and loving for years.
So - does that mean no one should use Etsy anymore?
No! The decision is yours, ultimately. I am still incredibly happy with the decision to set up shop on Etsy when I set out about two years ago as it allowed me to build up trust with customers in no way a website could ever have done. It's review system is one of the main benefits it has over a website, and that is worth a lot when you're just starting out. If you're thinking of opening up your own webshop, and you want a low-key way to do that and you don't have a loyal customer base yet, Etsy is still a good solution. For some time.
You shouldn't be afraid to make the leap to a different shop system at some point in the future though. I guarantee you, you will want to do that - and that's okay. It's not as big a deal as you might think it is now. Yes, it was hard work to set up my new website, but it was so worth it.
Tell me - what are your experiences with Etsy? Are you thinking of moving away from it too?