The Enshittification of Etsy
The Enshittification of EtsyEtsy raised seller transaction fees twice between 2018 and 2022, from 3.5 percent to 5 percent and then to 6.5 percent, the second increase prompting a strike by more than 14,000 sellers. The company made its Offsite Ads program mandatory for shops earning over $10,000 per year, charging a 12 percent fee on attributed sales with no opt-out. In 2023, sellers organized a boycott after Etsy placed payment reserves withholding up to 75 percent of earnings, and long-running complaints that mass-produced and dropshipped goods were crowding out handmade items culminated in the CEO acknowledging in 2024 that the marketplace had been caught in a 'race to the bottom.'
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The Paper Trail
| Date | Category | Symptom · rating · source |
|---|---|---|
| 2018-06 | pricing | Transaction fee raised from 3.5 to 5 percent and extended to shippingEtsy increased its seller transaction fee from 3.5 percent to 5 percent effective July 16, 2018, and began applying the fee to shipping costs for the first time. The company said the revised structure would fund investments in marketing, customer support, and product development.↳ Digital Commerce 360 |
| 2020-02 | ads | Offsite Ads program made mandatory for larger sellersEtsy announced an Offsite Ads program that automatically enrolled all sellers and charged a 12 percent fee on sales attributed to ads Etsy placed on Google, Instagram, Pinterest, and other sites. Sellers with more than $10,000 in annual sales were enrolled permanently with no ability to opt out; smaller sellers who opted in paid 15 percent.↳ Engadget |
| 2022-04 | pricing | Fee hike to 6.5 percent prompts seller strikeEtsy raised its transaction fee from 5 percent to 6.5 percent, a 30 percent increase, prompting more than 14,000 sellers to put their shops on strike for a week. A petition with over 28,000 signatures also demanded Etsy crack down on resellers of mass-produced goods; the company kept the fee increase in place.↳ NPR |
| 2023-07 | lock-in | Sellers organize boycott over payment reserve holdsHundreds of Etsy sellers organized a boycott after the platform placed payment reserves withholding 75 percent of their earnings for 45 days, citing potential refunds, often with little notice or explanation. Etsy later said it would substantially decrease the percentage of funds held for most affected sellers.↳ PYMNTS |
| 2023-12 | quality | Etsy lays off 11 percent of staff amid flat salesEtsy cut about 225 jobs, 11 percent of its workforce, citing a 'very challenging macro and competitive environment' with gross merchandise sales essentially flat since 2021. The restructuring returned headcount to roughly early-2022 levels.↳ CNBC |
| 2024-07 | quality | CEO acknowledges 'race to the bottom' as listing rules are reworkedEtsy introduced new 'Creativity Standards' sorting listings into made-by, designed-by, handpicked, and sourced-by categories, after years of complaints that mass-produced, dropshipped, and AI-generated goods had crowded out handmade items. CEO Josh Silverman said the company was escaping a 'race to the bottom' and returning to its artisan roots.↳ CNBC |
The Wall
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