Thinking of launching your digital product shop on Etsy? Hold your horses. It may be easier, faster, and cheaper (at first) to use a third-party platform like Etsy for your store, but there are details you should think about first. Especially after Etsy’s recent seller strike.
I know that it can be challenging for new digital product shop owners to get their store off the ground and sell their products. But there are even more problems you could potentially face if you choose the wrong shop platform for your biz. Here’s a run down on why I hate Etsy for D-Commerce™ sellers.
If you’ve seen the news lately, you might’ve noticed that Etsy sellers went on strike from April 11 through April 18. Sellers put their shops on vacation and asked shoppers to boycott the platform over the course of the week. A campaign in support of the strike received tens of thousands of signatures.
Why? Because transaction fees were being raised. The transaction fees increased from 5 percent to 6.5 percent — a 30 percent increase — beginning April 11th. And this happened despite strong earnings since 2020. Ya know, when a global pandemic occurred.
Etsy stated that the increase will mostly pay for features that’ll benefit sellers, like tools and improving customer experiences. But sellers are not happy…and this isn’t the first time Etsy has raised its fees and upset its users.
Digital product shop owners, consider this a teachable moment. The cheapest or most well-known eCom platform isn’t always the best option for your D-Commerce™ shop. Here are some reasons to consider before selling on Etsy.
Even after the transaction fee hike, Etsy’s fees are still lower than those of its competitors, like Amazon, which charges up to 15 percent in transaction fees on top of other fees. However, those fees still eat up a portion of your profit.
Don’t forget the fact that as the company has risen in sales, revenue, and size, so have those fees. In 2018, Etsy raised transaction fees from 3.5 percent to the recent 5 percent. It started taking a cut from shipping fees that same year, too. You’ll also have to pay flat listing fees, payment processing fees, and other service fees.
These fees are nothing new; if you open a digital product shop, you should expect to pay them for the services you use to run your shop. BUT. That doesn’t mean you have to accept what one platform charges you. If there’s a better deal, go elsewhere!
If you wanna keep more of the profit you make, I suggest setting up your shop using Shopify or SquareSpace instead. (And if you’re not sure which to choose out of the two, watch this video to learn more about each platform.) I’ve used both for my businesses, and I can honestly say they’re great options for digital product shop owners.
One of Etsy’s big draws is that it’s a recognizable brand. People wanting to support small businesses and buy handcrafted items often think of Etsy as the marketplace to search first. That means big built-in traffic and a little less marketing work if you choose to run your shop through Etsy.
But that also means you’re competing with a lot of other sellers, of which there are over five million on the site. And unless your product is super specific and caters to a tiny niche audience, you may have trouble standing out on the platform.
Plus, if you don’t adhere to some of Etsy’s rules or initiatives, it can cost your shop sales. Sellers were told in 2019 that if they didn’t offer free shipping on orders over $35, other sellers who did would be prioritized in ads. Yikes.
What’s the alternative? Setting up shop elsewhere and driving your own traffic to your own shop, instead of a big marketplace where you can easily get overlooked. I share some simple tips on driving traffic to your shop in this blog!
If it sounds like Etsy can be a wee bit controlling, well, you’re right. Fee hikes aren’t the only issue Etsy and its sellers have butted heads over in the past. For example, Etsy launched a mandatory advertising program in 2020, taking a 12 percent minimum fee for every successful sale.
There’s also the Star Seller Program, where sellers receive a badge if they maintain customer metrics like quick response time or five-star ratings. Sounds like a reward, right? Sure, but it also leads to micromanaging and unnecessary added pressure. It also doesn’t take into account how long some custom orders take or happy customers that simply leave four-star reviews.
One big part of a business that Etsy controls? You have to use the platform to contact your customers. This maintains both buyer protection and seller protection, but it can limit communication if your customers need to speak with you on other channels.
Want the freedom to talk to your customers through email, phone, instant messages, or other methods? Other eComm platforms don’t limit how you can reach customers, or how customers can talk to you.
As you can see from this blog, using Etsy to sell your digital products can be difficult. Their fees have been raised in the past, and there’s no telling when they may increase again in the future. The platform has quite a bit of control over your business, and it can be hard to make your shop stand out from other sellers.
Thankfully, there are the alternative shop platforms that we’ve talked about! If having certain payment systems or keeping more of your hard-earned money is what’s important to you, then find a platform that works with you, not against you.
And hey, if you’re leaning toward Shopify, I have a step-by-step tutorial that’ll walk you through how to open your own store! Trust me, you’re making an excellent choice for your digital shop platform with Shopify. (It’s my go-to recommendation for new digital shop owners!)