Etsy Raises Transaction Fees For Merchants By 30 Percent

The company said it would increase its seller fees on purchases from 5 percent to 6.5 percent

Etsy announced that it is raising the seller transaction fees from 5 percent to 6.5 percent in the wake of a record-smashing Q4 of 2021. According to the company’s earnings report to investors, the 30 percent increase will begin on April 11, 2022. The transaction cost is the percentage of a vendor’s total order amount that Etsy takes when a sale occurs.

The added expenditure on sellers stems from Etsy’s reported revenues of $717.1 million in the fourth quarter of 2021, which the company credits to a robust holiday shopping season. In addition, Etsy’s active buyers increased to 90 million, adding 10 million customers in Q4 alone. Following the news to investors, stock prices climbed over 15% after the market closed on Thursday.

“We have demonstrated our ability to make improvements that directly translate into more sales for our sellers, as evidenced by record sales per seller in 2021,” Etsy CEO Josh Silverman says in the report. “Our new transaction fee will enable us to invest in key areas like marketing and support to further extend our strong momentum.”

Etsy says the fee bump will largely go toward marketing, seller tools, and delivering world-class customer service. Some sellers have expressed dissatisfaction over past changes to features for vendors, such as the controversial advertising program.

Sellers are likely to be unhappy if they’re asked to pay a higher percentage of sales, especially given the existing issues on Etsy that merchants have been complaining about for years. The last time Etsy jacked up the transaction costs was in 2018. That year it raised its transaction fees from 3.5 percent to 5 percent and added a $0.20 listing fee, as well as payment processing expenses.

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Katie Sullivan

Katie is a digital nomad and business consultant. She has a bachelor's degree in business and has in the last 15 years in both the private and non-profit sectors. Her passion is helping people become better themselves and in turn creating better businesses. When she isn't chasing around her twin boys, she loves reading and gardening. She can be reached at [email protected]

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