Etsy’s attempt to boost sales is apparently a way for the company to take a cut from the sales of its merchants.
Etsy introduced its risk-free advertising service last week which automatically enrolls its sellers in the system. As per the new ad service, Etsy wrote that merchants will be able to advertise their products on otherPlatforms and websites including Instagram, Facebook, Bing, Pinterest, and Google. If the ads bring in revenue or sales for their merchants within a month, Etsy will charge the merchants for an advertising fee.
The new ad policy
The new advertising service comes with two features –
- Etsy removed Google Shopping ads which immediately affected sellers who are in the middle of running their ad campaigns
- The company introduced offsite ads
As stated earlier, the offsite ads allow merchants to advertise their products in other social media and websites for free. However, Etsy will take a cut from your sales when a shopper clicks any of the online ads within 30 days. Etsy made it sound appealing by adding the risk-free factor but merchants found the loophole of that system.
What’s the catch?
The advertising service isn’t optional which means it automatically enrolls all of its sellers into the program. Merchants who have made over $10,000 in sales for the 12th month period are required to join. Etsy gets 12% on each sale as opposed to the 15% from the smaller merchants. This means that if a buyer makes another purchase by clicking the ads within a month, Esty will get another cut. All the separate purchases from clicking the ads are subjected to the 15% or 12% fee.
What does this mean for you?
Many merchants may have to increase the cost of their products to accommodate the rise in advertising costs. Other small sellers are finding it more difficult to use the platform. This is especially true for sellers who are still starting out their online shops.