Etsy shop owners: fee increases coming in July

[TallTayl]

https://www.etsy.com/seller-news/2018-june-update?ref=EP_062018_T1B1

 

summary:

1) transaction fees for item sales will increase from 3.5% to 5% effective July 16.

2) shipping will now also incur the 5% fee.

3) two new monthly fee options with new business develop,ent tools are scheduled for release- no details available yet.

 

As expected many people are upset by the announcement of fee increases. Breaking down the fee changes:

a $20 order now with a $5 shipping charge today costs

$20 x 3.5% = $0.70

plus the $0.20 listing fee

total $0.90

 

with the new fee structure:

($20 + $5 shipping) x 5% = $1.25

plus the $0.20 listing fee

total $1.45

 

Difference, $0.55

 

raise your selling price of items at least 3% to cover the difference. $20 x 0.03= $0.6

 New retail price $20.60 + $5 shipping = $25.60

5% fee = $1.28

plus $.20 listing fee 

total $1.48

 

Another approach, You could add handling fees to the order to keep your pricing the same for skittish buyers. This will not be as straightforward, since you won’t often be able to predict what combo of items people will buy .

 

It’s probably time we all made a price increase given the state of our supply chain anyway. I don’t know about you, but I have quietly and frustratedly absorbed raw material price increases, freight increases, cost of R&D with unannounced reformulations of wax and fo, etc. What a great time to do raise prices! Customers will understand given it’s because of etsy...

[Crafty1_AJ]

Yes, I saw this and do plan to raise my prices.  DH and I were just discussing that this morning.  Like you, I've absorbed minor cost increases here and there, because I can't change the prices every 10 minutes and expect to keep my sanity, as well as the sanity of my customers.

 

Pet peeve:  I really hate that fees are taken out of shipping monies.  If I raise the prices of my shipping to standard commercial rates, customers will complain -- been there, done that.  And they will refuse to order, claiming that I'm gouging them on shipping.  It's so unfair.  So I charge the discounted rates offered by Etsy, and have to offset my losses by raising prices on the items I sell.  People don't understand that I am charging the same shipping that the post office charges me...no gouging or padding whatsoever.  Sometimes I even direct them with a hotlink to USPS.com so they can see the shipping price for themselves.  They don't understand that USPS raises its shipping rates nearly every year.

 

Five percent seems like a lot, but Amazon Handmade keeps 15% of both shipping money and product cost.  (No listing fees, though).  Cost of doing business, but it does bite a bit.

[Sebleo]

4 minutes ago, Crafty1_AJ said:

Yes, I saw this and do plan to raise my prices.  DH and I were just discussing that this morning.  Like you, I've absorbed minor cost increases here and there, because I can't change the prices every 10 minutes and expect to keep my sanity, as well as the sanity of my customers.

 

Pet peeve:  I really hate that fees are taken out of shipping monies.  If I raise the prices of my shipping to standard commercial rates, customers will complain -- been there, done that.  And they will refuse to order, claiming that I'm gouging them on shipping.  It's so unfair.  So I charge the discounted rates offered by Etsy, and have to offset my losses by raising prices on the items I sell.  People don't understand that I am charging the same shipping that the post office charges me...no gouging or padding whatsoever.  Sometimes I even direct them with a hotlink to USPS.com so they can see the shipping price for themselves.  They don't understand that USPS raises its shipping rates nearly every year.

 

Five percent seems like a lot, but Amazon Handmade keeps 15% of both shipping money and product cost.  (No listing fees, though).  Cost of doing business, but it does bite a bit.

 

Why don't you use the discounted shipping rates on etsy?

[TallTayl]

Charging fees on shipping is a give and take with etsy. We get better negotiated rates, but now are paying that discount back to etsy. Not a perk for us, but to them. The better rates they arrange with UsPS and other carriers, the more $ for them. 

 

Oh well. Nothing I can do except protect my meager margins. 

 

Financial sites are reporting positively, as this will result in an immediate jump for stock holders. It artificially increases their performance for a short term. 

[Crafty1_AJ]

9 minutes ago, Sebleo said:

 

Why don't you use the discounted shipping rates on etsy?

 

I do.

[jerry]

I've seen lots of complaints about etsy's fee increase and folks deciding to move to their own shopify or squarespace or big cartel site. (These are yarnie folks, not wax/soap people) Has anyone considered this? Don't you think your long time customers will follow you? 

[TallTayl]

I have my own site already. Etsy customers seem to love the protection that Etsy  affords them. Very few have converted over to my own site even though the prices are slightly lower.

 

the increases still end up lower than eBay and Amazon for my product category. eBay, last time I listed candles, wanted11% of the total sale. 😳🙄 

 

The change to including commission on shipping is for those cheats who were listing reduced sale prices, making up the profit on shipping and bypassing the fees you and I pay.

 

 

[jerry]

Ah, I hadn't put together what Etsy was trying to address by including the shipping...makes sense from their perspective and in light of Amazon and eBay's fees. And that's interesting to note that many Etsy buyers won't move, despite multiple positive buying experiences. Protection is important. I'm still trying to accept that fees for doing business keep increasing, and my income is not. Lol.

[TallTayl]

No kIdding. I’m long overdue to raise prices. The psychological barriers stop me every time. Time to be creative with bundling. 

[iansmommaya]

I’m raising my prices on everything but soap. Not just on Etsy but this Sunshine with them encourages me to do so. I only really use Etsy as a catalog anyway.