What The 2018 Etsy Fee Increase Means For Your Etsy Shop

Big corporations on the stock market are all about increasing company profits for their shareholders - that is the whole reason why companies go public in the first place. They want to make money, not lose money. Once a company goes public, they need to keep finding ways to boost profits and take market share. So Etsy is just like any big company, like Amazon or Apple.

But the difference between Etsy and public companies like Amazon and Apple Inc is that Etsy is primarily made of very small, mom-and-pop sellers with not a huge incentive for profit. Most Etsy Sellers just love making crafts, and often times don't worry about making a killing. While it's a great place to be creative, it is not a great place for big business owners who are trying to swoop in with mass-produced items (at least, that is typically against Etsy's policies, which are supposed to vary small, handmade creative items).

In contrast, people who sell on Amazon have no creative drive. They sell basic commodities like toilet paper and books. People who sell on Amazon are trying to find opportunities to make a lot of money without worrying about creativity. While there are creative items on Amazon, most creative artists and designers do not use it as their primary place to showcase their work. 

In my opinion, the 2018 Etsy fee increase from 3.5% per sale to 5% per sale is a way to push out small mom-and-pop sellers, and focus on Etsy Sellers who are focused on production, business and a corporate mindset. While 5% per sale is still relatively small (for instance, Amazon takes 15% per sale and Apple takes 30% per digital sale), it still hurts the very small home-based businesses who sell on Etsy as a craft. It will, at the least, push out some of the really small hobby sellers on Etsy who already are not making a ton of money but love to make craft items for others to buy. Perhaps a whole new marketplace will need to be created for crafty artists, but Etsy is definitely heading in the direction as being "the marketplace for creative business people" and no longer for "creative crafty artists."

Should you stop selling on Etsy?
In my opinion, Etsy is still the best place to start and grow a small business for creative people. Even with the 5% fee increase, it means that you will have to continue to learn how to be a better business person, in addition to being a good craft designer or artist. I will probably always sell on Etsy as long as it is around because it is a great place to find initial customers and develop new business concepts to test online. But if you want to grow your creative business on Etsy, you will need to learn more about the creative process, production, streamlining your process, selling things that have high demand, and keeping your costs as low as possible. The businesses on Etsy will have to master the art of sales & business strategy in order to not lose money.

What should you do in the long term?
In my opinion, if you want a sustainable business over the coming years, you will need to build your own website, email marketing and other online marketing platforms to control your business. As search algorithms and rules change on Etsy and other places, the only place that is truly "yours" is your personal website, where you will instead pay only credit card fees and web hosting - and instead focusing on setting up your landing pages the way you want to, collect email addresses, implement SEO and build a sustainable online business. 

How do you feel about the 2018 Etsy Fee increase? Leave a comment on your thoughts below.

Justin Wood

JPW Design Studio, California

Minimalist Website Designer