I opened an Etsy store in 2015 with high hopes of selling my handmade items. It seemed like the perfect place to offer handcrafted products and build my new business.
The first year I was there, it looked promising. I made a bunch of sales in six months, and it was fun and easy!
But with the arrival of the new Etsy CEO, Josh Silverman, it all changed.
Shops with their own policies in place would be at a disadvantage in searches from those that included Etsy’s predesigned policies. After seeing a dump in sales, I changed them to theirs.
Finding my products became complicated, no matter how thought out my SEO keywords were. My sales slowed down.
In 2018, Etsy started charging a new 5% shipping transaction fee on top of the 5% transaction and the $0.20 listing fee.
This meant that I had to increase my sales price slightly to keep up with the costs. Still, my sales were too few.
This week, Etsy announced a new policy that pushes everyone to offer free shipping to the US on orders of $35 or more. The sellers who do offer free shipping will get priority placement in US search.
There’s one problem: shipping isn’t free.
On its website for sellers, Etsy states that free shipping “isn’t actually free” for sellers, who still “need to pay the shipping carrier to ship your orders to buyers.” Etsy then encourages sellers to include shipping costs in the item’s listed price so they “don’t lose money.”
Etsy tells sellers that, instead of listing a product for $35 and charging a $5 shipping fee, they should adjust the item’s price to $40 to offer “free shipping.” This strategy isn’t new for e-tailers, but it indicates that Etsy simply wants sellers to plaster “free shipping” all over its marketplace to attract shoppers.
That’s why Etsy is giving products with free shipping a higher priority in its search results. In other words, sellers who don’t agree to hike their prices to offset the cost of “free shipping” will be less visible to shoppers.
Etsy still takes a 5% cut of each transaction and another 5% of the shipping fee. This means that Etsy retains a 5% cut of a seller’s entire transaction, regardless of whether the seller offers paid shipping options or bundles “free shipping” into its price.
Simply put, Etsy’s “free shipping” plan doesn’t cost the company anything. It also won’t cost the sellers anything, as long as they hike their listed prices to offset the shipping costs. But this sweeping plan could confuse buyers if sellers don’t all start offering free shipping at the same time.
Sending packages worldwide isn’t cheap, either.
I’ve done my best to offer the lowest shipping costs I can get, and I don’t profit from it.
Like many international handmade creators, I’d be forced to increase my prices up to 50% to include shipping costs to places like Australia or Japan.
Using Etsy’s reasoning, this would mean that if you bought the Sugar Skull Doll in my Etsy shop, instead of the $40.00 + $8.00 for shipping to the US, you’d be paying $20 more for “free” shipping.
If you buy two dolls, you’d be paying $40 extra for “free,” instead of $10 or $12.
I don’t know about you, but that doesn’t seem like a fair or transparent deal for you. It is for Etsy, though, as they’ll keep charging 5% for fees.
A quick side note: adding the shipping cost to the item price and saying that shipping is free is called ‘false advertising’ and is illegal in the U.K and also in the EU. Probably in other countries as well. The law states that ‘it is an offence for an advertiser/trader to make false claims about goods, services or prices’.
It looks like Etsy wants us to break the law as well.
A while ago, I tried to add other products to my store. It was impossible for me to do so because I couldn’t use a flat rate for shipping. I kept getting a pop-up from Etsy, telling me the price was too high. Nobody would buy my product this way.
Honestly, Etsy has taken the fun out of selling through them. Though I understand that, as a company listed on the stock exchange, they want to make a profit. But at what cost?
I’ve spent most of the day reading comments from other sellers in forums and groups, and most of them are livid, and they’re against misleading their buyers.
Our handmade businesses are not a hobby but a way to pay for a living. Being forced to adjust our pricing to accommodate free shipping will probably affect sales in a big way as we won’t be able to compete within our niches. This is something Etsy doesn’t care or want to understand.
I’ve been considering leaving Etsy for good for some time.
Sales have dropped. Some shops seem to get more passes and privileges than others. And there’s a rising market of mass-produced items taking over.
It may only be a matter of time before free shipping is mandatory for all shops and, who knows, maybe even overnight delivery.
Etsy is slowly turning into a dollar store. It saddens me because not many places online value handmade the way they should.
Maybe now is the time to put more effort into building my very own shop on this site, instead of working my butt off to help Etsy get more profit. In the end, it’s better to own your house than rent it.
As the saying goes: “When one door closes another opens.”
Let me know what you think in the comments. Does free shipping influence your buying decisions?