Illustrator Alex Kittle is putting her Etsy shop on “vacation mode” amid a week-long strike that has garnered the support of thousands of sellers.
Alex Kittel
In late February, Kristi Cassidy logged on to Reddit and sent out a call-to-action to people selling their wares on Etsy.
A day earlier, Etsy announced it would increase fees by 30%. For Cassidy, a seller of goth wedding dresses on the e-commerce platform since 2006, the decision felt like an insult to the small businesses that kept the site running by selling their wares during the pandemic.
“I wonder what would happen if on April 11th so many sellers put their shops on vacation mode for Etsy to launch [freaking out]’ Cassidy wrote. “And then they have no choice but to negotiate with us.”
Cassidy’s Reddit post sparked a week-long Etsy seller strike that began Monday. Thousands of Etsy sellers are putting their digital shops on “vacation mode” to protest the fee increase. An online petition setting out their demands had well over 77,000 signatures as of Thursday night.
According to the company’s website, Etsy has 5.3 million active sellers on its platform.
The fee increase follows a tremendous period of growth for Etsy. The company has been a big winner during the Covid pandemic as consumers restricted travel to stores and flocked to online retailers. Etsy sellers generated gross merchandise sales of $12.2 billion in 2021, compared to $5 billion in 2019.
Etsy, known for its handmade and personalized goods, initially saw an influx of shoppers looking for face masks. Now Etsy is trying to get them to come back to the site while competing with other e-commerce players like Amazon and eBay.
Etsy told investors in February that the additional revenue from the fee increase will be reinvested back into various company initiatives.
Raina Moskowitz, Etsy’s chief operating officer, said the company is “dedicated” to supporting sellers and helping them grow their businesses.
“We’re always receptive to feedback from sellers, and the new fee structure will actually allow us to increase our investments in the areas outlined in the petition, including marketing, customer support and removing listings that don’t follow our policies,” Moskowitz said said in a statement.
Investors and analysts who follow the company welcomed the fee increase and other recent changes. Guggenheim analyst Seth Sigman acknowledged that sellers would likely bear the brunt of the higher cost, but that the changes should benefit “everyone on the platform” in the long run.
“We appreciate the concerns of sellers. It’s their livelihood,” said Sigman, who recommends buying Etsy stock. “But the trade-off is that the company is using this as leverage to reinvest in the business. In our view, this should ultimately lead to stronger market share gains.”
Rising fees and resellers
Cassidy and other Etsy sellers polled by CNBC said they remain skeptical that the fee increase will lead to improvements on the platform. The company last increased transaction fees from 3.5% to 5% in 2018, and the payout has been 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 Ads program, Etsy sellers are also charged an additional fee of between 12% and 15% each time buyers make a purchase after clicking on an ad for their product.
“The recent transaction fee increase along with the [other fees]made it harder for smaller creatives to turn a profit and run their business sustainably,” said Marie Hart, who sells pins, charms and art on her Etsy shop.
As part of the week-long strike, Etsy sellers are urging the company to cancel the fee increase, allow them to opt out of offsite ads, and end a recently launched program called Star Sellers, which they say is unduly pressuring sellers.
Soudabeh Rouhandeh, Etsy seller since then
Soudabeh Rouhandeh
“As a small indie creator designing and handcrafting my wares and clothes, I lose hours of work and money on Etsy,” said Soudabeh Rouhandeh, who runs art and clothing store Sudibear.
Some seasoned Etsy sellers are also urging the company to crack down on resellers who they say have polluted the market.
Ever since Alex Kittle became an Etsy seller in 2010, she’s noticed an influx of bulk items and dropshippers. The shift feels detached from Etsy’s origins as a platform for showcasing handmade, one-of-a-kind goods that are often made to order, she said.
“For the most part I’ve found it to be a fun and diverse community, with both friendly sellers and buyers, and a great place to reach my type of customers (who are often a little nerdy or alternative in taste) ‘ Kittle said in an email. “In recent years it has expanded to include larger companies, dropshippers, resellers and even fraudulent stores.”
Etsy CEO Josh Silverman told sellers in February that the company expects to spend more resources this year removing listings that violate its policies. In 2021, Etsy spent $40 million to expand teams and technology focused on marketplace security, the company said.
Nicole Lewis, who has been selling handmade crayons on Etsy for 15 years, said she disagreed with the premise of the strike. Etsy has connected CNBC to sellers who did not participate in the strike.
Lewis said she doesn’t blame Etsy for the increase in transaction fees and that many of the recent changes are a necessary part of the marketplace’s growth.
“I think a lot of the OG sellers who fret about Etsy still see it as the Etsy of 2004, 2005, 2006,” Lewis said. “It isn’t anymore and it can’t be. Not in the world we live in today with so many people out there wanting to sell their work and we are competing with Amazon.”
Etsy Sellers Union
Cassidy said she didn’t expect the vendors’ strike to gain momentum.
But after reaching out to sellers during the strike and realizing they had many similar concerns, she and other Etsy sellers began considering forming a union.
“The crazy thing is I didn’t even realize how many people out there agree with me,” Cassidy said. “It was a huge, eye-opening experience just to see how much all the other people trying to make a living off of me on this platform agree and how much my clients support me.”
Etsy sellers aren’t employees of the company, but they hope that by joining forces, they’ll be better able to advocate for change in the online marketplace. A number of Etsy sellers have joined a Discord server where they plan to work out organizational charts, Cassidy said.
Although Lewis did not take part in the strike, she said she supported the idea of a vendors’ union. “I honestly think it’s a smart idea because people just want to be heard and acknowledged,” she said.
Etsy officials did not respond to a request for comment on the sellers’ plans to unionize.
Cassidy said she was inspired to organize Etsy sellers after witnessing recent union victories among Starbucks baristas and at an Amazon warehouse.
Since the pandemic began, labor activism has surged across the country. Tight labor markets in the US further fueled support for unionization, and workers have seized the moment to demand higher wages and better benefits from their employers.
Since the strike began, she has been contacted by worker groups who have raised the issue of organizing vendors, Cassidy said. Any next steps will boil down to what the seller community wants, she added.
“We weren’t sure what to call it,” Cassidy said. “Is it Union? Is it handcrafted slash vintage solidarity? What do we call this thing? We don’t really know what that looks like because we’re in uncharted territory.”