The Lie Etsy Told Me

In June of 2018, I took photos of this dress – my first fantasy design.

Fantasy Wedding Dress

It was also around then that I got an email from Etsy telling me they would be raising my fees. I was a bit nervous about my shop. I’d heard things about Etsy’s CEO (who had done a lot of for-the-greater-good projects) being fired and replaced with a new one. The new CEO was making a lot of changes very quickly.

From when I joined in 2007, Etsy was always a place where I knew I needed to drive my own traffic. Even as Etsy had gotten bigger over time, it was still a given that success on Etsy required doing your own marketing and promotion. Particularly if you sell something unique. Etsy would bring a few buyers that care about handmade in general to the platform, but if you want the buyers that care about the type of stuff that you make, you should work on bringing them yourself. In return for this, we paid low fees, and the number of buyers on Etsy’s platform kept growing thanks to the hard work of all the sellers in the ecosystem.

The fee increase seemed justified, because Etsy let me know that they would be changing that deal. They told me they would be using the extra money I would send them to bring more buyers to the platform. It was a large increase – from 3.5% to 5%. It would bring the yearly cost I paid to sell my designs on Etsy just in transaction fees (they charge us separate fees for hosting listings, and to process each payment) from about $1100 to nearly $1600.

But more buyers would make it worth it to me. I would continue with my marketing efforts, and with Etsy’s push to bring me new buyers as well, I would end up making more sales.

2018 was my best year. Towards the end of it, it did seem like they brought more buyers to me.

Sadly, that would be shortlived.

The graph shows Etsy’s active buyer counts each quarter for a year and a half before the 2018 fee increase and a year and a half after the 2018 fee increase. That information is public, because they release it to their investors each quarter.

What you see in the blue line on the left is a combination of people like me working hard to grow the platform, and the marketing Etsy was doing for a 3.5% fee. On the right you see two lines. The blue trendline, which is what you would expect to happen with no fee increase. And the red line – what actually happened.

Do you see that jump between the third and fourth quarter of 2018? And how the line goes nearly parallel afterwards?

I really believe Etsy ramped up marketing to buyers for a few months – for as long as they thought their sellers were paying attention. That red line going near-parallel is what would happen if they stopped all new marketing-to-buyer efforts after that point, but we sellers kept working hard to grow the platform. I certainly did.

And look at what happened with sellers in the same timeframe.

I had an amazing end of 2018, followed by a shrinking 2019. It’s exactly what I would expect to happen if Etsy only tried to bring me more buyers for a few months, and then used my money to bring themselves more sellers.

I really believe they took my money, and the instant I stopped paying attention, they used it to make themselves even more money.

They lied to me.

But I didn’t know that back then.

I wouldn’t find out until later.

This post is part of a series telling the story behind the 2022 Etsy Strike. Click here to start at the beginning.

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