A DIY dilemma… Millions of small-biz merchants use Etsy’s ecommerce platform to sell everything from embroidered crewnecks to hand-sculpted vases. Now thousands of those vendors are on strike, closing up their shops for the week. They’re protesting transaction fees that are going from 5% to 6.5%. Just three years ago fees were half that.
Blinged-out face masks… circa: 2020. Etsy was the go-to marketplace in the early days of the pandemic, when mask scarcity at major retailers forced consumers to go the homemade route. As a result Etsy saw record profits and was the S&P’s second-best-performing stock in 2020 (after Tesla). But like other pandemic thrivers, sales are starting to cool as shoppers return to their pre-Covid routines and shopping habits. Now Etsy’s execs want to Amazon-ify the biz by widening its appeal:
- Etsy's CEO said it’s competing against some of the biggest retailers and needs to hike fees to reinvest in elements of its core biz, such as speeding up response times to sellers.
- Etsy’s sellers have complained that the rapid growth has also attracted a flood of wholesale and mass-produced vendors — which is against company policy.
Etsy risks losing what made it special… its sellers. Etsy now aspires to be the first place you go to shop online. But those Amazon-esque ambitions conflict with its original mission of providing a platform for artists, arts-and-crafts folks, and their customers. The tension playing out between Etsy and its sellers suggests that as it aims for a bigger piece of the e-commerce pie, the mission may have to change.