Sellers in Etsy, Inc. now plan to form a union following a week-long strike to protest a recent hike to transaction fees and other changes.
The merchants’ refusal came after the e-commerce platform had announced hiking fees by 30.00%. This charge surge was an insult to small businesses who kept the site humming throughout the pandemic.
Correspondingly, Kristi Cassidy, the strike’s lead organizer, called action to people who sell their goods on Etsy.
Then, thousands of sellers on the site put their digital shops on vacation mode to protest the fee increase.
This online petition outlined their demands and had over 77,000 signatures on Thursday evening. Overall, the marketplace has 5.30 million active sellers on its platform.
Accordingly, the recent charge hike comes on the heels of a tremendous growth period for Etsy.
The firm significantly benefited from the COVID pandemic as consumers reduced trips to the store and flocked to online retailers. Etsy sellers obtained gross merchandise sales of $12.20 billion last year, surpassing the $5.00 billion in 2019.
In February, the platform told investors that additional revenue from the fee adjustment would finance various initiatives at the company.
Consequently, Etsy COO Raina Moskowitz ensured that the firm would continuously support sellers and help them grow their businesses.
She further emphasized that the platform is receptive to seller feedback. Moskowitz explained that the fee structure would enable the company to increase its investments in areas outlined in the petition. The initiative aims to yield better marketing and customer support.
Eventually, market participants who tracked the firm applauded the fee raise and other recent changes.
Meanwhile, analysts acknowledged that sellers would likely bear the brunt of higher costs. Nevertheless, the changes would ultimately benefit everyone on the platform in the long term.
Etsy sellers remain skeptical about rising fees
Etsy sellers still have doubts about whether the fee increase will translate to improvements on the platform.
In 2018, the rise in transaction fees was from 3.50% to 5.00%, and the payoff was minimal.
On top of transaction charges, merchants must pay listing, payment processing, and shipping fees.
Moreover, they also receive a 12.00% to 15.00% charge anytime shoppers purchase after clicking on an advertisement.
In line with these, it would be harder for smaller creators to turn a profit and make their businesses sustainable.
As part of the weeklong strike, Etsy sellers ask the company to cancel the fee increase. They also request to allow them to opt-out of the Offsite Ads and end Star Seller, a recently launched program.