Etsy sellers are furious over new mandatory ad fees

Etsy sellers are furious about the website’s new advertising scheme, which will impose huge fees on some sales. What’s worse, certain users aren’t even allowed to opt out.

Etsy announced two new updates to its advertising model in a February 26 blog post. Firstly, the ecommerce website is removing Google Shopping ads from its current advertising tool Etsy Ads, meaning sellers who use it will only have advertised listings on Etsy. The changes take effect immediately, so it’s particularly disappointing for sellers already in the middle of advertising campaigns.

However, Etsy won’t stop advertising on Google entirely, which brings us to its second, much more controversial change: the introduction of Offsite Ads.

Under the new Offsite Ads program, Etsy will advertise sellers’ products on Google, Facebook, Instagram, Pinterest, and Bing. “When a shopper clicks on one of those online ads for your products and purchases from your shop within 30 days, you’ll pay an advertising fee,” wrote Etsy. “You only pay an advertising fee when you make a sale — eliminating the risk you could pay for ads that don’t work for you.”

It doesn’t sound too terrible — until you get into the details. 

Under Etsy Ads, sellers could enter a budget when opting in to the service. In contrast, Offsite Ads automatically takes a whopping 15 percent of income from eligible sales, up to $100 per order. If the same buyer makes multiple separate purchases within 30 days of clicking an ad, all are subject to the fee.

Etsy already charges 5 percent shipping and transaction fee, plus a 3-4 percent fee for Etsy Payments. (Enrollment in Etsy Payments is mandatory for eligible countries, including the U.S.) The new policy means sellers could lose up to 24 percent of their income from a sale — and that’s before factoring in other costs such as listing fees.

What’s worse, Etsy has also automatically enrolled every single one of its sellers into the program, making it an opt out system rather than opt in. Further, sellers who make over $10,000 within 12 months aren’t allowed opt out ever — even if their store’s income drops below $10,000. Though they’re charged a reduced fee of 12 percent, it’s still an egregious amount to pay for something many don’t even want.

Angry sellers are blasting the new policy, many threatening to move platforms. The changes have particularly enraged sellers who have already built customer bases and are worried buyers searching for them will be served ads. 

Etsy’s official forums are holding a staff Q&A about the changes, but it’s done little to appease the community. Mashable reached out to Etsy for comment but had not heard back at time of publication.

Offsite Ads fees will be imposed from April 14, so don’t be surprised if your favorite store’s prices rise accordingly — provided they don’t leave Etsy altogether.

UPDATE: Feb. 28, 2020, 9:42 a.m. AEDT An Etsy spokesperson has since provided the following statement to Mashable: “At Etsy, we’re always listening to our sellers and adapting our platform to best meet their needs. Many sellers asked us for marketing products that give them more control with less risk, and we’re excited to evolve our advertising services to directly address this feedback. Offsite Ads will help sellers reach tens of millions of potential buyers off of Etsy, without having to pay any fees unless they make a successful sale. While we understand that changes like these can be an initial cause of concern, we’re confident that once Offsite Ads launches sellers will see the benefits of this powerful new marketing tool.”