Following a record-breaking fourth quarter of 2021, Etsy announced today that it is increasing seller transaction fees from 5% to 6.5 percent. The company stated in a report to investors today that the 30% hike will take effect on April 11th. When a seller makes a sale on Etsy, the transaction fee is a percentage of the entire order amount.
The increased cost to sellers comes on the heels of Etsy reporting fourth-quarter revenue of $717.1 million, which the firm attributes to a robust holiday shopping season. Etsy added ten million new buyers in the fourth quarter of 2021, boosting the total to a record 90 million active shoppers. Following the announcement to investors, stock prices rose more than 15% after market closing on Thursday.
According to Etsy, the fee hike would mostly cover the costs of “promotion, seller tools, and providing world-class consumer experiences.” However, previous changes to seller features — such as the contentious advertising programme — have met with resistance from sellers, some of whom are unable to opt-out.
Increased seller fees are sure to enrage merchants on the platform, who have long grumbled about Etsy’s growth. Etsy increased transaction fees last year, from 3.5 percent to the current 5%, and sellers additionally pay $0.20 for listing an item, in addition to payment processing fees.
