Etsy’s Boost to Fees Prompts NYC Sellers to Boycott

The Brooklyn-based online marketplace is angering sellers of arts and crafts products.

Etsy Inc., an online marketplace for the 21st century that matches arts and crafts sellers with almost 100 million buyers annually, is facing a 20th century headache. Merchandise vendors who use the site went on strike last week to protest a 30 percent increase in transaction fees taking effect.

The Brooklyn-based company announced last month that the fee it charges sellers would increase to 6.5 percent from 5 percent of sales starting April 11. That was enough for Kristi Cassidy, a Rhode Island-based dressmaker who markets her apparel on Etsy, to take to Reddit and organize a weeklong boycott by her and other sellers.

“Rather than rewarding the sellers whose hard work has enabled Etsy to become one of the most profitable tech companies in the world, Etsy gouges us, ignores us and patronizes us,” Cassidy wrote on an online petition. As of April 14, the letter has gathered almost 77,000 signatures, including those of about 27,000 retailers on the site.

Etsy is an e-commerce company that focuses on handmade or vintage items, and craft supplies. In February, the company said sales on its site in 2021 soared 31 percent to $13.5 billion from the year before. 

The company said in a Feb. 24 news release that revenue from the increased transaction fee will be invested to improve marketing, seller tools and improve the customer experience.

“Etsy enables anyone with a creative idea to start a business and reach a built-in audience of more than 90 million shoppers,” Josh Silverman, Etsy’s chief executive officer, said in the release. “We have demonstrated our ability to make improvements that directly translate into more sales for our sellers, as evidenced by record sales per seller in 2021.”

But despite business booming, in recent years the app has launched a series of changes that incentivize shorter turnaround times, and mandatory advertisement fees, which sellers argue penalize them. The transaction fee increase was the final straw, for the boycotting sellers.

The boycott comes after a resurgence of union activity in the city in recent weeks, from Chris Smalls’ historic win in Staten Island, organizing the first U.S. union at Amazon.com Inc., to the more than 500 employees of Condé Nast – publishers of Vogue, the New Yorker and Vanity Fair – voted last month to form a union. Their cry was simple: “Prestige doesn’t pay the bills.”

But Etsy shops are in a complex position. They operate somewhere between laborer, user, product, and contractor, blurring the worker-employer dynamic and jeopardizing workplace protections. 

“We are the thing that they are offering,” Cassidy said.

Courtney Gamble of Brooklyn, whose shop MessQueen sells handmade neon rave clothing through Etsy, generates around $20,000 a year – about a third of her income. Directing criticism at the company, “You wouldn’t be what you are without us,” she said. Gamble estimates that a 1.5 percent fee increase amounts to $8 more going to Etsy with each sale. She’s joining the digital picket line.

Gamble considers herself an Etsy employee, but laments over the anonymity of her boss. “It’s just Autobot responses; they’re just feeding me back the FAQ page answers,” she said. When she couldn’t locate a specific tax number last March, Etsy placed her account on hold, during the pivotal Mardi Gras season during which she makes a large portion of her annual sales.

“I was just begging them. I’m probably losing so many sales,” Gamble said. 

The dissatisfied Etsy seller represents a conundrum for the modern-day digital “workplace.” Increasing numbers of people like Cassidy and Gamble generate income from websites like Etsy, Ebay and Depop, which they are both reliant upon, yet contractually independent from. 

Gamble also resents the “Star Seller” feature imposed by Etsy last July. It awards sellers a gold-standard certificate if they satisfy criteria such as shipping over 95 percent of orders within three weeks. “It’s not for people who do like personalization,” she says, noting the additional time needed to create bespoke pieces – the type of personalization that’s integral to Etsy’s brand. Instead, this rewards factories on the site, posing as craftspeople, except they can make products cheaper and faster. “That’s, that’s impossible to compete with,” she says.

Another sticking point for strikers Offsite Ads. Introduced in 2020, if a buyer clicks on an Etsy shop via an advert on another website and buys a product within 30-days of that click, the seller pays a mandatory 12-15 percent advertising fee. 

“Sellers have no meaningful representation in the Etsy board room,” says Harry Burger of Long Island, who sells 3D printed wax seals and signet rings. “Even if they were to meet all the action-demands on the strike petition, what we really need long term are labor rights for the gig economy,” he says. 

But what keeps Burger, Gamble and Cassidy tied to the app, is a lack of alternatives; websites that generate significant traffic for small businesses with a craft niche. Competitor handmade marketplaces have seen fateful ends: ArtFire shut down last year, and Zibbet was sold in 2017. 

It’s due to Etsy’s monopoly status that Burger takes issue with his status as an independent contractor. “They do everything possible to make the labor they depend on dependent upon the company for things that we can’t afford to provide for ourselves,” he says, referencing the backend services that Etsy provides, like removing the complexities of sales tax collection and filing.

Gamble has considered an exodus to Amazon but reports of “horror stories” from friends have kept her on the app. “I hand make made-to-order clothing. Maybe if I were selling hot sauce that might work,” she says. Instead, she’s encouraging customers to buy from her own website. 

Striking without legal employee status leaves sellers in a precarious situation, “since the law doesn’t prevent Etsy from just closing down all the shops belonging to organizers,” says Burger.