Call me a hipster if you want, but I love handmade, unique products.
In the last 6 months I’ve bought a handmade waxed canvas bag from a wonderful gentleman in Belgium. A Boar bristle beard brush fro London, and ink for my fountain pen from… somewhere.
I guess I really am a hipster.
Hipster status aside, all of these pieces have been bought from one place.
It’s a great platform with great products you’re often not able to find in general stores.
But more than that, it’s great because I feel like I’m contributing to small businesses.
I feel like I’m getting products people have put real thought and care into whilst helping independent creators pursue their passion and run the business they want to.
Well, it would be if it weren’t for the Easy powers that be.
A couple of months ago Easy made some changes which, if I’m being honest, really p’d me off. They decided to change the way fees for their merchants are organized.
But for the life of me I can’t see how these changes benefit the merchants who make their platform what it is.
The Change in Etsy’s Fees and What it Means for You
Etsy decided to change their fee structure in July 2018. They raised their transaction fee from 3.5% to 5%, which is a massive increase to drop on merchants with little warning.
But here’s the best bit, not only does that fee increase come into effect for the product’s fee it also applies to the shipping cost.
underhanded shrewd move on Etsy’s part to include the shipping cost in the fee changes. If they hadn’t, merchants would be able to list products for very cheaply and make up the profit they need through the shipping fee.
But it’s a particularly galling decision. Why should Etsy, technically a storefront in itself, be able to take a cut of the charge you pay to someone like UPS?
It makes absolutely no sense. Instead of being the fee increase that helps Easy “provide a better service” it feels like nothing more than a cheap attempt at grabbing some extra money from those who are often working on tight margins.
It’s particularly frustrating as it comes hot on the heels of Etsy’s other recent update, their plan to implement a cart abandonment email solution.
As I’m sure you’re aware, cart abandonment is a huge problem in the world of ecommerce and the stats currently have the abandoned cart rate sitting at just below 80%.
As mentioned in this piece, that’s $400 walking out the door for every $100 you make.
Knowing it to be a big problem for online merchants you could say that Etsy’s abandonment email solution is something of a good decision. However, it’s the way in which they did it that makes it feel so scummy.
Most abandonment platforms will charge either on sales made or a flat monthly fee. This way, you’re only really spending (as it’s a % of profit), or have unlimited sends.
Etsy, however, monetized the crap out of their model by pricing it per send.
And the price they chose was $0.10 per email.
That’s $0.10 per send without any guarantee of a sale. You could end up paying hundreds of bucks to recapture a single cart which, if you’re selling low-cost items, won’t cover the cost of the sends in the campaign.
And when, according to Klaviyo, the average recovery rate hovers around the 3.5% mark it’s going to be tough to justify that payment to Etsy.
I don’t want to be the one who says that Etsy is taking advantage of their users, but all the signs are there. And there’s no smoke without fire.
It seems to me that Etsy’s focus has shifted from creating a great platform for both merchants and shoppers into one that generates as much money as possible for Etsy.
The thing is, the extra costs don’t seem that much individually. A 1.5% increase here and 10c there sound manageable and almost reasonable.
But when you look at it, Etsy is trying to take a cut from you at every stage of the purchase journey. They’ve monetised the service is one of the most aggressive methods possible – and it could price smaller merchants off the platform and out the game.
Etsy, whilst having built a good foundation for many small brands seems to no longer be the place that’s ideal for those who want to sell their own products online.
What Are Your Options?
The first thing I’d say is the same advice I’d give to anyone running any form of digital business.
Build your own platform.
Never build your house on someone else’s land. As Etsy has demonstrated they could change the rules or even sell the land out from under you leaving you up a creek.
Build your own audience, create your store, and keep control over all the elements you can.
Then, use tools and services that allow you to more effectively build on your platform and diversify your portfolio.
If you speak to any wealthy merchant you’ll find they always have numerous income streams. They’ll be selling products from their own store to their email lists, generating leads through paid social traffic, securing joint venture partnerships and retail store placement.
They’ll be selling different products in different ways, never relying 100% on one platform so when something like this comes along they’re not left out on their ass.
But more than anything, they’ll have one centralised location over which they have 100% control.
There’s a great quote on this from Kerry Perse of AdWeek which reads;
“It’s critical for brands and influencers to invest in their own digital commerce destinations in addition to selling their products on third-party sites. Influencers should make sure to not only be Instagram famous but also invest in their blogs and offer an option on their site to shop their Instagram”
Don’t rely on Etsy, Amazon or any other platforms where you don’t have control to build your brand. You have to have your own location and use it as the hub of your ecommerce endeavours.
Etsy should be nothing more than one of numerous traffic and sales driving channels.
If it’s currently your only method of making sales, I’d recommend moving to something like Shopify and using Easy as a secondary traffic and sales channel.
That opinion is one echoed by many others who are far more invested than I. If you want to hear it from someone who’s built their business with Etsy, check out the below video.
But there’s a problem, right?
Something mentioned in the video by Olivia.
One of the key benefits of using something like Etsy or Amazon is their built in, readily accessible audience.
I’ll admit that is a nice benefit to have, but if the fees keep on increasing you have to ask yourself if it’s worth it.
There are other ways to quickly reach an audience and sell your products without having to resort to extortionate fees and a lack of control over your pricing.
The Easiest Way to Sell to Your Audience (With Minimal Fees and Full Control)
I’m not saying you should abandon Easy. However, you should be looking at creating other income streams and locations to sell your products.
I know it’s time intensive to set up multiple sources of traffic and revenue generation, so start where it makes the most sense to start.
Start with the locations your audience is already hanging out.
Generally speaking, that’s going to be social media networks.
According to Statista, the overall amount of time your audience is spending on social networks is increasing year on year. Social commerce is booming and the sales number only look to be heading in one direction – up.
With more people signing up to various networks and more time being spent on those same networks, it’s only natural that this is where you should be focusing your efforts.
I could also point to benefits like Facebook’s advanced targeting which helps reach your ideal audience. Instagram’s love of highly stylised product images (and love of unique home made products). Or even the fact that 80% of Pinterest pins are repins giving you a huge opportunity to create something that goes viral.
Social media marketing, when done well, is where you can best reach your audience.
It’s not a 100% replacement for Etsy. Etsy will always have that search functionality and is a destination people go when they’re already committed to buying.
However, you can circumvent the fees by bringing in users from a wider audience and selling directly to them through social media networks.
jumper integrates with all the major social media networks and adds an automated checkout bot to your updates. When someone comments on your post with the #hashtag you’ve created, they chatbot takes over to process the payment and delivery details.
If you take the products you’re selling on Easy and use jumper to promote them, you can effectively set up a dropshipping store of your won products through your social media accounts without getting rid of your Easy store and the profits it’s bringing.
You’re simply adding another sales channel to your processes.
If you want to see a quick video on this exact process, be sure to watch Andrew’s walkthrough below
Once you’ve got it set up, you have another sales channel in addition to what’s already working. You become less dependent on a service that’s slowly taking more of your profit returning some of the power and control you need.
But also make sure that you’re not just selling through social. Make sure that, in your follow up messages, you’re collecting people’s email addresses.
Not only will this increase your customer lifetime value, but it goes back to that idea of building your own audience. An audience you have complete control over.
Don’t Quit Etsy, But Don’t Take this Lying Down
Yes, Etsy is increasing their fees. And yes, that sucks because each extra fee is eating into your profit margins.
The knee-jerk reaction is to abandon the platform to “teach them a lesson”, but the truth is it’s still a great platform to make sales.
Rather than do something rash, look at the processes you have in place already and ask yourself if you can add more revenue streams to the Easy one you already have set up.
Don’t quit Etsy, but do move as many of your processes and actions over to tools that allow you to build your own platform where you have full control.
If you’re looking for ideas, I’d recommend something like Shopify for your store and your own social media accounts and email to help promote them.
Of course, something like jumper could help turn those social accounts into direct sales as well. So before you go, be sure to watch the videos listed above, sign up for your free jumper account, and see how you can start building an audience you have 100% control over.