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How Increasing Fees has Caused Loss of Faith in App Giant
Ilya Nasedkin • 20 July 2018
A few days ago, independent online marketplace, Etsy, hiked up their fees causing a considerable loss of faith with their loyal customers.The e-commerce website boasts two of the most popular apps; one for customers looking to browse thousands of independent shops and create wishlists of their favourite items, while the second is for sellers to quickly manage these online shops on-the-go. Etsy make their money from taking a cut of each item sold on the platform and, up until July 2018, their fees were just 3.5% of sales. Etsy have now raised this significantly to 5% and now take a cut of postage and packaging fees - a fee that previously went untouched by the company.
Who
does this affect?
Etsy has long been proud to be the
largest online home of independent and artisanal businesses, who use their own
skills and time to produce unique, high-quality handmade products. The
popularity of the website and its affiliated apps is a testament to the handmade
movement that has seen a resurgence in recent years and is heartening to those
who strive to turn their backs on mass-produced commercial products.Sadly though, it’s these very artists
and designers who are being affected the most. With many Etsy business owners
often working alongside their creative pursuits, many simply can’t afford this
hike in commission, and believe it’s motivated by greed. Etsy customers have
also been affected, as many sellers are having to raise their fees to mirror
Etsy’s new rates. It’s unclear yet whether this inflation will harm Etsy’s
earnings. What
does this mean for competitors?
Etsy’s popularity has meant that it’s a
trusted source of traffic for an independent business wishing to sell online.
They can usually guarantee that they’ll find potential customers looking for a
unique handmade item, especially around prominent shopping times like
Christmas.Many, though, are making the decision to
shun Etsy, and are instead turning to newer, cheaper and potentially fairer
e-commerce apps and online marketplaces. Shopify and Folksy have both seen a
flood of new sellers arrive at their doors since Etsy made this change on July
16th, and more competitors are expected to see a rise in users over the coming
months, as Etsy’s higher seller fees come into effect.Now has never been a better time to
embark on your own e-commerce app, especially one which is promotes a community
spirit and artisan values.
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