On most nights, I conk out mid-page on whatever fantasy novel I’m reading by 8:30PM at latest. Last night, Etsy-induced insomnia kept me up until close to 1AM.
I had received an order from a lovely customer for one of my pirate hats. This one, to be exact:
It’s one of many items I complete-to-order. I had been looking forward to getting out the purple trims and purple feather sprays and attaching all that prettiness to the hat. Until I saw that the order had been attributed to an Offsite Ad.
What is an Offsite Ad?
Offsite Ads are Etsy Product ads on Google, Facebook, and other sites, which I do not want, but Etsy purchases unilaterally on my behalf. When one of my sales is attributed to an ad, I’m charged an Offsite Ad fee on top of Etsy’s normal transaction and payment processing fees. As a result, about 22% of the customer’s payment goes straight to Etsy in fees.
I can’t opt out of Offsite Ads. I can’t choose which items are advertised, or how much is spent.
Why don’t you just pad extra in to cover Offsite Ads?
I wish that were possible! But I don’t control them. They’re controlled by an AI algorithm. I’ll have zero dollars in Offsite Ad spend for months on end, followed by hundreds of dollars in a single month. How much, exactly, should I overcharge every single Etsy customer in order to cover that potentiality?
What the heck… is that even legal?
It appears to be illegal in the EU. I’ve seen multiple reports from EU-based sellers who reached out to Etsy support, citing EU law in their messages. They were able to get their accounts manually opted out of Offsite Ads.
Here in the US, there are serious questions about whether Offsite Ads aligns with the FTC’s Junk Fees Rule:
Online marketplaces or other intermediaries, including those in the secondary ticket market, responsible for offering, displaying, or advertising the price of a good or service must give sellers the information necessary to calculate the total price. For example, if an intermediary charges a fee to access its platform and the seller passes the fee on to the consumer, the intermediary must give the seller accurate information about the fee so the seller can include this mandatory fee in the total price.
That’s the big issue we have with Offsite Ads as Etsy sellers – the algorithmic nature of the program makes Etsy fees widely variable, and as a result, it’s impossible to price our items accurately. I’m hoping that a future FTC will take Etsy to task for what seems to me like a clear violation of this rule.
But why lose sleep?
All this typing, and I still haven’t gotten to what was keeping me up last night. Offsite ads are unfair and annoying, but I am able to sleep even when annoyed!
Yesterday, however, I made the mistake of looking at Offsite Ad stats in my Etsy shop. It’s felt like quite a few more of my sales are being attributed to these ads, but I hadn’t yet looked at the data. It was worse than I realized. So far this year, I’ve paid nearly 10 times in Offsite Ad fees what I paid for all of last year.
Is it just a run of bad luck? Or is Etsy’s AI getting smarter and figuring out new ways to charge me?
Confession time: I’ve cancelled a couple Offsite Ads orders this year. It’s literally the only way I can have any level of control. I can refuse an Offsite Ad sale, and Etsy will refund all the fees when I refund the customer.
I hate doing this, because it’s a bad experience for the customer. But this year, I had a couple instances where I just couldn’t stomach it. In one case, it was a one-of-a-kind item that was getting lots of traffic via organic searches, and based on stats, a few of those shoppers seemed to be going on to purchase other items in my shop. I didn’t want to take the hit on the Offsite Ad sale AND lose all that traffic (and the ensuing organic sales). In another case, the customer paid extra for express shipping. I get charged Offsite Ad fees on shipping. So 22% of the exact-cost that I charge for upgraded shipping went straight to Etsy in fees, and had I sent that order, I would have had to make up the difference out of pocket.
Around 12PM last night, I finally gave in. I played a trick on myself, and it worked to help me get to sleep. I clicked “cancel” on that Offsite Ad order, wrote a polite apology to the customer (simply saying I couldn’t accept the order but not explaining why), and then I wrote an email template to explain the situation in full.
I didn’t complete the order cancellation, and the template email text stayed in the spreadsheet where I store those sorts of things. But I lied to myself, convinced myself I’d be hitting the go-button on both items first thing in the morning.
I was asleep within 5 minutes.
Then I woke up this morning, and made the decision I knew I would make – that is, to go ahead and take a paycut on this order, and hope that in the future I receive enough orders without attached Offsite Ad fees to cover it.
For items that are listed both in my Etsy shop and on my website, I offer a 10% discount on my website. I really like 10% – it’s a nice easy-to-calculate number! But I was starting to worry that it wouldn’t be enough in the future.
So today, I took the time to do the complicated math to figure out the exact percentage of Offsite Ad sales which my current Etsy upcharge covers, and I’m still okay, so long as the ad fees don’t keep increasing exponentially.
While in math mode, I took a couple seconds to do some calculations on this particular Offsite Ad order. If my pirate hat customer had shopped on my website, she would have paid $19 less for her hat, but I would have received $16 more in payment!
Jewel of the Sea Pirate Hat – Peacock Feather Tricorn
Plunder the high seas, Victorian style, in this gorgeous ladies pirate hat. It’s made of a soft cotton poly blend and trimmed all around with lace and pleated ribbon. The sides are permanently attached to the crown so it will keep its beautiful tricorn shape. Each uptake point is adorned with a skull and crossbones set in an ornate frame.