Etsy is at it again. They have rolled out a new Etsy Risk-Free Offsite Advertising Policy that is mandatory for all sellers. If you’re wondering how it will affect your Etsy shop, here’s the short answer:
Etsy Risk-Free Offsite Advertising could be bad for shops with low profit margin products. Etsy will charge as much as 15% in combined fees on each sale. But, if your shop made less than $10K in the last 365 days, you can opt-out.
If you’re a longtime Etsy seller, you may be feeling triggered – this isn’t the first time Etsy has dropped the axe on its sellers. But for many, it may be the last.
Etsy’s Risk Free Offsite Ad Policy in Their Own Words:
“Offsite Ads uses Etsy’s budget and expertise to promote your items on Google, Facebook, Instagram, Pinterest, and Bing. When a shopper clicks on one of those online ads for your products and purchases from your shop within 30 days, you’ll pay an advertising fee. You only pay an advertising fee when you make a sale—eliminating the risk you could pay for ads that don’t lead to a sale.”
What Does this Really Mean?
As part of their business model, Etsy has always placed paid advertisement on web search engines and social media sites – it’s how they bring customers to their site. Now – when they do so, they’ll be passing that cost on to their sellers.
Win/Win for Etsy, right? Sellers pay to list products, they pay when they sell products, and now they’ll pay to advertise those products. Wait, I think that is actually a win/win/win for Etsy.
Etsy Community Reactions are Not Positive:
I logged in to the Etsy site and found lots of feedback from sellers in the forums. The reactions are not positive. Here are a few good points:
- Between the listing fees, the transaction fees on product and shipping, credit card processing fees, and a push provide free shipping if you want to shop up in the search results . . . the new advertising fees are steep. 15% of your sale. [12% if you had $10k or more in revenue last year.]
- If you made $10k in revenue on Etsy in the last 12 months, you’re forced into the program. No opt out. If you made less than that, you can opt-out after a month; however, as of this writing, there is no dashboard setting for this.
- It is unclear if Etsy will be advertising your individual product, linking directly to your shop . . . or, if you are paying 15% of your revenue on ads that promote Etsy in general.
- It is unclear how the advertising to sale pathway will be tracked and counted. For instance, if a buyer clicks on an ad for a competitor’s product, then clicks around and sees your products, then comes back to your shop in 29 days – will the 15% fee be taken?
- The advertising fee is cost-prohibitive for low profit margin items. For example, print on demand products typically earn a low percentage for the shop seller. A tee shirt might sell for $25, but with the printer’s fees, the listing fees, Etsy’s nearly forced “free shipping” policy – an additional 15% on top of that could reduce the shop seller’s profits to nothing. Or worse, less than nothing.
What to do Right Now
- As of right now, the new policy has taken effect. If any of the listings in your shop carry a low profit margin, log in and deactivate them until you have a chance to calculate how the new advertising fees will effect your bottom line. If you are earning less than $10k a year, you (hopefully) will be able to opt out of the program soon enough and you can reactivate the listings then.
- Log in to your account and head over to the Etsy community and read the comment about the new policy. Take a moment to “like” the comments you agree with. Also, Etsy published a survey, so add your feedback while it’s still open.
- If you haven’t already done so, this is a good time to start that email list. Remember, your email list is one of the only online assets you own in which you can communicate with your clients/collectors directly. If you decide Etsy no longer suits your needs, an email blast is the fastest way to let your people know where to find you next.
Hopefully, Etsy’s Risk-Free Offsite Advertising Policy will not be too disruptive to the creatives that rely upon Etsy’s platform. Keep in mind that in the past, Etsy has walked back policies that its users protested. However, now that Etsy is forced to compete with Amazon, it may not be able pull it off to this time.
Bottom line: Etsy has been a valuable resource to creatives, but it has not been without its problems. Keep a watch here . . . I will update Etsy Risk-Free Offsite Advertising Policy as I learn more.
Update on Etsy’s “Risk Free” Offsite Advertising:
Following Etsy’s announcement of their offsite advertising program, there was an outpouring of protest from Etsy sellers. No surprise there.
Etsy has softened their position on mandatory participation in the program. Now, sellers who made less than $10k in the previous 365 days can opt out. Sorry heavy hitters – you’re stuck.
If you qualify and would like to opt out, here’s how: