Lauren Anderson

Etsy made its site popular by providing small businesses, such as Angelilli Apothecary (pictured), with a platform, but its recent increase in transaction fees has caused tension between the site and its sellers.

Small businesses were hit particularly hard by COVID-19, but Etsy, an online shopping site where any business can showcase their products, gave business owners a chance to keep their business afloat without a typical in-person shopping scene. 

Etsy saw an increase in sales from their active sellers by 23% from 2019 to 2020 and had more than 90 million active buyers worldwide. The company released a statement claiming, “Together, we’ve made Etsy the marketplace for unique and creative goods.” 

Etsy reached record sales in 2020 and 2021, but instead of rewarding their sellers, Etsy increased their transaction rate from 5% to 6.5%. Additionally, Etsy levies transaction fees on shipping. Sellers are left with no option but to increase their prices even more to cover additional costs. 

“There are a lot of unique things that are perfect for gifts that you wouldn’t find anywhere else,” frequent Etsy customer Amy Nicholson said. “Or if you could find something similar, it could be mass produced or poor quality.” 

Consumers are forced to make a decision: Will they continue to support small businesses, regardless of the additional expense, or will the upcharges become too much? 

“It’s hard because you want to support small businesses and you know that the owners are working hard, but there comes a point where you can’t afford all of the additional fees and shipping,” Nicholson said. 

This is not the first time sellers have been forced to pay upcharged fees for transactions on the site; in 2018, Etsy raised its fees from 3.5% to 5%. 

“It’s hard enough having a small business in a world so heavily reliant on online shopping,” Etsy shop owner Jessica Faugs stated. “Unless your Etsy shop is huge, you don’t really make much. The transaction fee increase doesn’t seem big, but it makes more of a dent than you would think.” 

In an attempt to combat Etsy’s increased charges, small business owners arranged a strike on the site from April 11-18 as new transaction fees were implemented on April 11. Sellers are putting their shops on pause and signing petitions to demand lower fees, one of which has more than 74,000 signatures. 

Though Etsy continues its record-profit levels, sellers feel as though the site’s greed is diminishing their profits and their ability to advertise their products on a larger scale. “When I first joined Etsy, I thought it was going to be a life-changing website. Now I’m just annoyed that it keeps cutting my profit levels,” Faugs said. 

The question remains: Will Etsy continue to see significant growth or are sellers willing to give up some exposure for lower fees?