#SEO for Etsy | Explore Tumblr Posts and Blogs

cindylouwho-2 · 1 month

Text

ETSY FIRST QUARTER 2024 EARNINGS REPORT - No Idea When Sales Will Improve, But Lots of Change Coming

(Above: Slide 18 from Etsy's Investor Presentation, © Etsy. The top 6 categories were down across the board)

As Etsy predicted last quarterly report, gross marketplace sales were down in the first quarter of 2024, but contrary to predictions last quarter, the top brass now do not expect anything to improve in the second quarter. They didn't even try to sugar coat it much.

However, this turned out to be an interesting call anyway. Given that they had bad news and little new to announce, they actually had to divulge more details on how the site actually works, and the search plans for the near future. I strongly suggest that every Etsy seller familiarize themselves with what is coming down the pipe.

First, here are the official sources:

the press release

transcript of the conference call

slides from the conference call

video of the call (click on “Webcast”)

my summaries of the first quarter 2023, and the fourth quarter 2023 for comparison

Then, the basic numbers (covering January to March 2024, compared to the same period in 2023):

Sales on Etsy were $2.6 billion, down 5.3% year over year

Total sales for all 3 marketplaces (Etsy, Reverb, and Depop) were $3.0 billion, down 3.7%. [Elo7 was officially sold in mid August; its numbers were included in the comparison totals from 2023]

Etsy’s revenue (including all 3 sites) was $646 million, up 0.8%

Seller service revenue was up 3.2% to $179 million, while marketplace revenue was down 0.1% to $467 million

Net income was $63 million, down 15.5%

Active buyers on Etsy alone stand at 91.6 million

Active sellers on Etsy alone are at 7 million, up over 1 million from the first quarter 2023 but no change from the 4th quarter. [Note that “active” means one charge or transaction in the past 12 months; many “active” shops currently have nothing for sale.]

Etsy sales where the buyer and/or the seller was not in the United States were 48%, although across all three sites it is only 45%

As usual, I am mostly reporting on what Etsy said, but my own comments will be in square brackets, as well as in the analysis section at the end of this post.

Gift Mode and Gifting Initiatives Aren't Going Away

Etsy's front office seems happy with Gift Mode so far, and note that gift buying on the site in general is already increasing. "We're pleased to report that Etsy's total site-wide gifting GMS in the first quarter grew in the low-single-digits year-over-year," which was better than other gift sites they were tracking.

Gift Mode was also a huge success at getting attention, with over 4 times the news coverage of any previous Etsy public relations campaign. CEO Josh Silverman said they were happy with the Super Bowl ad, and would consider doing one in the future if the company had another big thing to announce.

And finally, we heard the real reason that Gift Mode sucked when it was released: the team that came up with it in the summer of 2023 intended it to be released in 2025, but Silverman insisted that they do it for 2024. He admits it needs a lot more work. [So a lousy product that doesn't do anything it is advertised to do was launched a year early because the CEO was out of other ideas and needed something fast. No doubt that is why a lot of the ads and emails are leaning into the personas instead of the main function of choosing a gift for a particular person and occasion.]

Etsy Search and Discovery

They've been talking about this for a while, but this time the comments were far more explicit: Etsy search has too much "clutter". The whole quote is important:

"All too often, when you visit Etsy, your search is cluttered, showing you too many items that feel very similar...failing to highlight the incredible diversity that is a towering strength for Etsy. In addition, you might not be clear as to why each of these items belong on Etsy. For example, which are handmade by the seller themselves, which are designed by the seller, but produced in close collaboration with the production partner and/or which are personalized and customized by the seller. While there's demand on Etsy for each of these categories of items, it depends a great deal on the buyer's shopping mission." [my emphasis]

Slides 8 through 10 discuss how Etsy plans on solving this problem.

The first point - removing non-handmade items - is covered below.

As has been mentioned in previous calls, Etsy wants to change its search to show more "quality" products. This means adding factors "such as the quality of the listing and photography, shipping price and reliability and customer reviews into our organic search algorithms." [This is likely the reason Etsy recently updated the search legal policy page, mentioning these sorts of factors in their recommendation algorithms. Yes, as I have been telling people for a while now, image quality is becoming part of Etsy SEO and its other algorithms. Looking at the listings which have "Etsy's Picks" badges is a good way to spot what Etsy currently thinks is "quality", but that could easily change at any time. Note also that he said "organic search algorithms" - apparently they are not planning on doing this with Etsy Ads just yet, meaning shops who lose visibility through organic search may have to pay for ads to make up the difference.]

Their definition of quality excludes "sellers that have higher levels of refund or consistently ship late" - they want the customer to be happy with the whole buying experience, not just the product. So above-average rates of returns and late shipping are also likely to factor into Etsy's many algorithms, if they don't already. [Shipping late is a policy violation, and those are search factors under the Customer & Marketplace Experience Score. All of this is Etsy SEO now. We already knew they hated refunds/cancellations because some sellers have received payment reserves for having too many - as few as 1 or 2 in some cases - in a short period of time.] Silverman did agree with a comment that returns/refunds lead to lower Etsy revenue as well.

They also seem to be working on some new way to categorize or filter items, as hinted above with the comments on production partners. "Better organizing our diverse listings into cleaner aisles will declutter our site." This could be referring to the previous attempts t auto-filter large generic searches into narrower categories; see examples in my third quarter 2023 summary. It might also connect to 2 other quotes worth reading:

"[T]he first page of search results might be 30 things that look very, very similar... If these 30 things are virtually identical, can't you just tell me, which one is the best or what are the three, and what are the trade-offs between them? And that's harder for us where we don't map to a catalog. But I think with the latest machine learning and GenAI techniques, it's easier and easier for us to start to understand what the stuff is, what's very substantially similar and really try to give you fewer choices of just the best."...

"Gen AI is actually going to be, I think, more and more helpful at understanding how much value did this particular seller truly add to the product. And we're looking to prioritize items that are really original where the seller really added value and then be able to explain to the buyer exactly where the seller did add value. Did the seller make it themselves, did they design it and produce it with a production partner, did they personalize it, I think that buyers are interested in knowing that." [my emphasis]

So the search plan is to show fewer items that look similar to each other, while adding more diverse items to the first page, all while boosting listings where the seller "added value". That sounds difficult to accomplish. Think of some searches where it is clear that many of the shops are using the very similar supplies, using the same fonts etc. In his ideal version of Etsy search, are most of those items going to disappear from the early pages in favour of things that look different and/or more complicated to make?

[There were 2 separate mentions of the differences between handmade vs. designed vs. personalized, including in the prepared remarks. Are they actually going to do something to make this more evident to shoppers, and if yes, how? If a shop sells POD and has their production partner linked, Etsy could display that more prominently on the listing, and even use that fact as a search filter. However, many owner-designed products don't have integrated production partners, and Etsy has done almost nothing to enforce disclosure there. We know from experience that AI will do a poor job of figuring this out, but Silverman doesn't seem to have noticed that yet. I am intrigued, but not hopeful.]

"Keep Commerce Human" and Handmade Policy "Violations"

They continue to tout increased removal of items and shops under the handmade policy, and mentioned the AliExpress bot again. If the image exists on AliExpress, "our default now is we take that down". Silverman mentioned that sellers can appeal the takedown, but failed to mention that the process takes weeks or even months, and the shop loses a ton of sales and their listing quality score in the meantime.

Handmade removals more than doubled in the first quarter compared to the year before. Etsy has lost a bit of money due to more aggressive removal of listings and shops as handmade violations; they estimate sales are 0.5% lower than they would have been if nothing was removed. Since the push started, they claim millions of listings and tens of thousands of active sellers have been taken down.

The annual transparency report should have more details; it will be out next week. [I will write my review of it the week after, when I return from a short vacation.]

The Economy

In case you haven't heard, some people feel they have a shortage of discretionary income these days. Silverman claims that Amazon and Walmart are only growing because they sell "everyday essentials". [Remember when Etsy said they were a site for everyday essentials too? The early pandemic was a wild time, and Etsy might be better positioned today if they hadn't assumed the ecommerce boost would continue forever.]

One of the analysts expressly asked if Etsy could still see itself as "a growth company" when they weren't showing any growth, and if they were planning on making really aggressive moves to restart growth this year. Silverman insisted they were all about big moves, citing Gift Mode as an example.

[Perhaps in frustration, this is where Silverman slipped up and swore, saying the corporation does "a sh**-ton of measurement" on the value of its projects, which for me was truly the highlight of the call. I like it when the talking heads show they are human.]

CFO Rachel Glaser pointed out that Etsy is still growing in the higher income brackets, and that when economic conditions improve for lower income households, Etsy will be in great shape.

Miscellaneous

In shipping updates, Silverman reported that:

"Our fulfillment team recently launched a new machine learning model, which reduced our estimate of USPS transit times by greater than one day, resulting in a nearly tripling of the percentage of eligible orders for which Etsy is now able to show an estimated delivery date of seven days or less."

[This would explain why so many shops are reporting items due to arrive before they ship, or have the wrong processing times on them. Any time Etsy applies machine learning to anything, there are widespread errors. They do seem to have fixed the processing time issue, however. Expect Etsy to continue to push for shorter processing times all year, and to have issues with USPS estimates.]

We finally got updated information on buyer app use: 45% of active buyers use the app. That does not necessarily mean that 45% of purchases come from the app, just that those customers use the app at least once in a while. Oddly enough, this was the first quarterly report in years that did not mention sales from mobile. Last quarter, 68% of sales across all of Etsy's sites came from mobile. If those stats are identical on Etsy - that's a big "if" - and if the 45% app use number was actual sales (not just occasional use) that would mean that 45% of Etsy sales would come from the app, 32% from desktop, and 23% from mobile browser. They will be pushing the app much more again this year, "since purchasing days per app user are 75% higher than our non-app users."

the $15 sign up fee for new shops reduced both new sellers and fraud attempts. Silverman referred to "low-effort sellers" and stated "if you're not prepared to invest $15 to get your shop going on Etsy, you may not have the skill or the will to really succeed." [This is such a huge change from the years of him bragging that anyone can start a shop for 20 cents that I wonder how he doesn't get whiplash from these reversals.]

we got a little more info on the planned loyalty program, but not a lot. It won't even be out in beta until the second half of the year, and "the focus is going to be on occasional shoppers...and [how to] turn those people into more loyal buyers."

Reverb and Depop both had good quarters, in part due to their "appeal to value-oriented shoppers".

My Commentary

The biggest takeaway is that algorithms will be changing, and that could hurt a lot of sellers who are currently doing well. They've been saying this for a while now, but recent policy updates and more details on their vision makes this feel much closer.

If they are truly going to narrow down searches to the best of the similar, a lot of items will be shown a lot less than they are now. The difference in "quality" between one listing and the next could be very minor, so setting the goal of narrowing the choices down to just a few means some top sellers could be impacted.

If you want your Etsy shop to keep being shown to visitors, work on:

eliminating late shipments. Extend your processing times and extend individual orders as required. Make it easier for your customers to understand they need to provide information for custom items. [This is tough to balance, because longer processing times and cancelling orders when you don't have the information from the buyer yet are both things that also hurt your visibility. It's just another way in which Etsy is sabotaging sellers of truly custom made items on the site.]

reducing returns and cancellations as much as possible. Examine the reasons people cancel or return orders in your shops, and look for common complaints/reasons you could potentially decrease though information in descriptions and images, FAQs, automated notes to buyers, and Message snippets. [I once stopped selling a product because too many people couldn't figure out how to use it properly. I thought I was explaining it well, but obviously I was not. There is no shame in failing, as long as we recognize the fact.]

improving image quality. This includes making sure your photos are at least 2000 px in the shortest direction, and are clear, uncluttered, properly white balanced and attractive in composition.

making your unique contributions evident in the photos and description. If you "add value" to the product, let everyone know that.

when considering new lines, doing your best not to look like everyone else. Aim to sell that original version that Etsy wants to display as evidence of Etsy's diversity.

remembering that shipping price is a search factor. It may eventually be necessary to bury some or all of the shipping fee in the product price, or to discontinue low-margin and expensive-to-ship products, if they are going to be narrowing down to only a few "quality" products for each query.

I'll have more to say on the handmade violations initiatives after I read the transparency report next week. My current feeling is that the seller community needs to be more publicly vocal about how Etsy's refusal to "keep commerce human" by hiring more support and more handmade screeners is harming truly handmade artisans. Removing items that are also showing up on Aliexpress or Shein as the default action, then forcing small business owners to wait weeks or even months for a resolution, is the antithesis of "human". Oh, and instead of picking on handmade items, try turning AI on the boxes of commercial snacks and foods that continue to violate Etsy policies and cheapen the site.

Some people seem really worked up about the loyalty program plans, but since we know virtually nothing about it yet, I will reserve judgement. A properly-planned loyalty program should produce enough extra revenue to cover the costs, just as Etsy aims for with its periodic "save $10 on all orders over $40" offers.

Finally, last financial call they said they expected to see things picking up in quarter 2, now they say that is not expected until the second half of the year. What happened? Is it truly economic pressure, or did they have to abandon their plan to make more money by forcing shops into tiered subscriptions, at least temporarily? Silverman did stress that they think the gifting initiatives will pay off more as the year goes on, but the tone of this call was so different from the previous one that I can't help but feel that they had other plans just a few months ago.

My prediction from last quarter - that 2024 will be a rough year for many sellers - still stands.

#EtsySellerNews #etsy #seo #ecommerce #microbusiness

5 notes · View notes

cindylouwho-2 · 10 months

Text

RECENT NEWS, RESOURCES AND STUDIES, MID-AUGUST 2023

Welcome to my latest roundup of ecommerce and other online news for small and micro businesses, including Etsy sellers. Usually August is a slow news month, but there is still a fair amount going on.

Want to receive this report and my website blog posts by email? Sign up here: http://bit.ly/CindyLouWho2Blog

With the continuing demise of Twitter being a concern, here is a list of places you can find me, and here is where I am posting news:

BLUESKY

TWITTER

I hope to get the next report out before Labour Day, but of course I cannot predict what will happen between now and then. Please let me know if there is anything you would like to see more reporting on!

TOP NEWS & ARTICLES

Repeating this from the last update since it so important: Etsy’s latest policy changes brought in the ability to opt out of the binding arbitration clause, but existing members only have until August 23rd to do so. The Indie Sellers Guild has some thoughts on this. If you are opting out, remember this must be done for each account (buyer or seller), and make sure to include the following information in your email to [email protected]:

your name

the email address for your account

your username

your shop name (if applicable)

Expect a vague email response that does not verify that you are opted out, because this is Etsy and why would they be clear?

If you have anything with images of children in your Etsy shop (including art and figurines), please carefully read Etsy’s new policy on such imagery, as it appears many current photos and other visual depictions will not be allowed as of September 8. I started a thread in the Etsy forum for discussion.

Amazon changed the deposit rules for UK and EU sellers who started on the site before 2016, implementing the “7 days after delivery date” deposit release that newer sellers also face. The UK’s small business commissioner and the minister for small business were not amused, and that led to some money being released early, but with a warning that the new delayed deposits would resume in January 2024.

ETSY NEWS

Etsy has changed the criteria for payment reserves for the time being, but we don’t know much about how, other than the fact most have been reduced to 30% from the original 75%. We still don’t know how they have made “... adjustments for issues that are beyond sellers’ control” such as a lack of cheap tracking, or if they are truly providing better communications to sellers just put on reserve, other than this Seller Handbook article from August 4. That article does admit that most current reserves are about shipping. I do know that we aren’t seeing many new reserves mentioned publicly, so it appears they have changed something.

A few sellers from the UK have been able to opt out of Etsy’s Offsite Ads, but Etsy is now pushing back and rejecting requests. Reminder that most of the EU and also Switzerland can now opt out.

The Make an Offer tool now lets you choose which listings you will accept offers on, as well as other improvements. (It's still only available to shops that sell in USD, and not all buyers can see it yet.)

To accompany the release of Etsy’s new baby registry, Etsy reported on recent baby and nursery trends. Farm animals are apparently in, as are flowers.

The holiday season trends report is also out; it covers Canadian Thanksgiving to New Year’s Eve. “277% YoY increase in searches on Etsy containing “wooden christmas tree decor” - With sustainability in mind, many buyers are opting for ornaments made of solid hardwood over plastic.” And apparently maxi skirts are back?

The second quarter 2023 report showed stagnation in sales but more new sellers, plus Etsy focussing on telling sellers to discount items. You can read my coverage here. Some analysts are starting to sour on Etsy: “They feel a little bit like Pinterest to me where they have something great but they're not finding the opportunity on it.”

Smiley faces are one of the latest takedown targets - not by Etsy bots, but by the actual rights owner.

SEO: GOOGLE & OTHER SEARCH ENGINES

If you are using internal links on your website for SEO reasons, beware that the anchor text is also important.

An analysis of the biggest winners in Google search results for the United States in the first half of 2023 shows Mercari had a huge leap in search visibility so far this year.

Bing is not gaining much on Google’s market share, despite having a jump on AI search.

Brave Search now includes both video and image searching.

If you missed a lot of Google developments in July, Search Engine Roundtable has you covered.

[Advanced content] An Ahrefs study found that ⅔ of websites using hreflang have at least one problem.

SOCIAL MEDIA - All Aspects, By Site

General

Since most social media platforms don’t want people leaving their site, they tend to give lower ranking to posts with links in them. You can get around this issue by focussing on zero-click marketing. [text and video] There’s a followup video with transcript on the 4 ways you can promote content through social media as well.

Another what and when to post on social media, this one covering Facebook, Twitter and Instagram, based on what brand accounts did in 2022. [I’m thinking the Twitter data may not be as relevant today.]

Several US states have passed laws requiring parental permission for anyone under 18 to join social media, or are in the process of doing so.

One of the downsides of Bluesky is that it counts any link URLs as part of your character limit, but you can get around that if you aren’t also adding a photo.

Facebook (includes relevant general news from Meta)

Daily active users on Threads have dropped over 80% from their peak. The site is still developing, however, and desktop access plus searching is coming soon.

Instagram

Instagram is adding more tools that use artificial intelligence.

Photos carousels now support music.

TikTok

TikTok will be offering fulfilment services in the UK, to be followed by the US. “The example merchants are influencers and beauty brands to start with.”

Users in the EU will be able to remove online tracking from their TikTok “For You” algorithm in the near future, possibly by August 28.There will also be advertising changes.

Twitter

The Twitter algorithm is changing, and now prioritizes replies, plus it is pushing video. “X is also penalizing mentions of the term ‘Threads’ as well as links to the Meta competitor.” [Yes, I am still calling it Twitter, but you can call it X if you want.]

Tweetdeck is now a paid service only. The ability to organize different lists and even work with multiple different accounts made it an essential for doing a lot of work on Twitter.

ECOMMERCE NEWS, IDEAS, TRENDS (minus social media)

Amazon

Amazon will be charging additional fees for sellers who use Prime but don’t ship through Amazon, starting October 1.

Amazon added hundreds of new product attributes that need to be added to relevant new listings starting on August 16.

Looks like there will be another Amazon Prime Day in several countries this year.

Amazon’s second quarter was strong, with a lot of growth in ads.

Investors are suing Amazon over several issues, including lying to them.

eBay

eBay is finally agreeing to negotiate with the union of its recent acquisition, TCGPlayer, after the larger company failed to reverse the vote to unionize.

Poshmark

Poshmark’s app will soon include an image search, called “Posh Lens”, although only some have the beta test at the moment.

All Other Marketplaces

Depop’s new seller protection policy for US and UK sellers kicks in on September 3, and requires sellers to purchase shipping labels on the site.

Wish is laying off over ¼ of its staff, including up to 40% of its employees in the United States.

Shipping

The port labour disruption in British Columbia is officially over.

ONLINE ADVERTISING (NOT SOCIAL MEDIA OR ECOMMERCE SITES

If you aren’t using the free Google Shopping ads for your website yet, here are some tips on optimizing your products. Note that “Google may also assess your landing page speed and experience to rank your products”; many think that is only for organic results.

Google ended “similar audiences” from all ads on August 1. “Campaigns using similar audiences will automatically get opted into optimised targeting and audience expansion moving forward. Marketers who would rather avoid this can go to the audiences tab in the Google Ads settings page and manually turn off the campaigns instead.”

STATS, DATA, TRACKING

Still not paying much attention to Google Analytics 4? Here’s more info on why and how it is different from Universal Analytics.

And that's it for this edition! Please let me know if there are other topics I should be covering.

#EtsySellerNews #seo #ecommerce #etsy #social media #microbusiness #cindylouwho2 #marketplaces

7 notes · View notes