/ etsy

The Great Etsy Swindle

We signed up to Etsy in March 2018 to try and widen our customer base. As of August 15 2018 Enstaved has closed its Etsy store. There's a few reasons, but first, let's have a look at how Etsy became the website of choice for craft lovers and makers.

There's an old saying: If you want to make money in a gold rush – be the one selling shovels and pans. In the resurgence of hand crafted goods in online sales, the makers of these goods are in the middle of a gold rush, and Etsy are the ones selling shovels - in so far as they provide a huge marketplace with incredible name recognition and accessibility.

Etsy was launched in 2005, and quickly became a competitor to eBay and Amazon by offering a range of hand crafted items sold by hobbyists and small businesses. As the online market grew, people were becoming dissatisfied with mass produced products, and flocked to the site in huge numbers. Despite this, the company was struggling financially, and in the next two years was swamped with complaints about its user interface and search functions.

The following years involved a reshuffle of the board of directors, who brought in some changes to the site – launching the company on the stock exchange, and addressing a growing number of complaints about the company. Specifically the fact that many 'vendors' approved by Etsy were in fact resellers for larger businesses trying to pass off mass produced items as hand made.

In 2017, Etsy changed its direct checkout system to the Etsy Payments platform. Previously, sellers were able to take sales through their own PayPal/credit card/banking accounts. Now, all transactions went through Etsy directly, who would then transfer the money into the sellers account. This was non-negotiable, and one of the first red flags I looked into when we set up our store with them.

The company defended the move, claiming it would offer more security to shoppers. This is despite the existing complaint resolution services offered by every other online payment system in the world.

The rest of the fine print involved yet another fee tacked onto sales, again, non-negotiable.

With the growth of the service came the added problem of navigating the products to find what you want. As with Facebook and Instagram, Etsy added a paid promotion service to the site to allow sellers to boost their profile in search results.

Now let's go back over that and I'll list the reasons and background for why we're leaving.



To start a store on Etsy is free. The interface is quite user friendly and it's easy to set up a great looking shop. They even give tutorials and guidelines for how to get the best results. All good there, I have the coding skills of a dead bilby. So how do they make their money? Fees. Listing a product is cheap enough, only USD$0.20 per item. Relisting costs another USD$0.20, which you can do after 3 months if your item hasn't sold.

Then they take a cut of your sales (if any) after that. It's 5% of the sale price, which I don't begrudge at all, they're a business too, they need to make money. But when they moved to the Etsy Payments platform they added another processing fee on top of that for the privilege of receiving your own money. Depending on where you are based in the world, and where you are selling to, it will be either 3-4% of the sale price. Plus another 0.25-0.30 cents in your local currency.

So depending on your location, you've just lost almost 10% of your earnings right there, before the money even reaches you. If your profit margins are a bit slim that can have a pretty disastrous effect on your bottom line. And if you have a large number of items to sell, the listing and relisting fees add up quite quickly.

Paid promotions.

We've dabbled with paid promotions on Facebook and Instagram, mainly as an experiment to see how they performed. If you have enough money behind you, you can reach a huge amount of people quite quickly. Problem being, adblockers exist, and people are quite adept at scrolling past another ad on their phones. So we haven't gone any further down that road, relying more on word of mouth.

With Etsy, the marketplace is so massive that it's almost impossible to find anything in a search unless you narrow it down to some quite specific tags. They do give you the option of adding a number of search tags to your products, but when you're on page 64 of 132 pages of results, people simply will not see you. As a way around that they offer paid promotions to bump your product up the list a bit. Sounds good, but again, if you don't have a huge advertising budget you will find very quickly that you're still lost on page 64 behind the previous 63 pages of people that do. In much the same way as my Instagram feed is constantly showing ads for Coca Cola, McDonalds and Fox Studios, they are the companies with the money behind them to reach everyone.

The 'secret' of paid promotion isn't a secret anymore if everyone is doing it.

The Tech Monkey told me a story about a restaurant near him that used Menulog to promote themselves. Which worked well for a few weeks. Menulog would take a cut of their online sales (which, if you know anything about the restaurant business, profit margins on sales are razor thin), which hurt, but the increase in sales covered it.

Then, they noticed their sales slipping back to where they were before Menulog. Other restaurants were using the service, so they were slipping down the search results. They started a paid promotion to bump themselves back up to the top. Other restaurants started doing them as well. After 3 months, they realised they were losing more money trying to compete with other Menulog users than they were bringing in from sales. So they stopped using it. See where I'm going with this?

Etsy as a business has failed to recognise that, while they may have an edge on other online markets, without properly supporting their clients sellers will grow dissatisfied and leave. Trying to get a business off the ground is hard enough, and being hobbled by extortionate sales policies and impossible promotions has killed off many small businesses before today.

The end complete.

This may sound like sour grapes, and some of you may be thinking that we haven't given them a proper go. Well, frankly, we can't afford to.


In the 6 months we had our store up, we made two sales, both in the first week. The customer in question (Thanks Bryan - you're a legend!) was rapt in our Lawful and Chaotic staves of Critical Hits, and I'm stoked we could provide him with some awesome staves, but out of the revenue we made from those sales we lost a fair chunk in shipping fees and packaging costs - before Etsy took their slice out of it. Add the relisting fees to that and our profit was whittled away fairly quickly.


Coming soon to the Enstaved store!

So why continue to deal with a company that has no interest in supporting what we do and charges us for the privilege? Etsy have moved away from providing a genuine marketplace for makers and hobby/craftspeople, and are more interested in their shareholders profits. And we've moved away from Etsy.

So long, Etsy, and thanks for nothing.

Edit: Etsy are now offering subscriptions, where for a fee of AUD$27.70 per month for the Etsy Plus package (Etsy Premium prices available in 2019) you get some "free" listing credits, some "free" paid promotion credits, and some extra customisation options for your shopfront. That's AUD$332 per year, not including their payment processing fees.

The free option is still available, but you can guess where you'll end up in the search results...

Further edit: In the 2 days since I announced on Etsy that we were closing down, we allegedly had another 20 views and 15 visits to our shop - more than the previous month put together! According to the Etsy statistics, which couldn't be biased at all.

Ben the Design Monkey

Ben the Design Monkey

World reknowned* industrial designer and self confessed geek, Ben is the design guy for Enstaved. Using his love of comics, gaming and pop culture to create the designs we sell. *(in two countries)

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