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Etsy Fourth Quarter Earnings 2023 - Still Banking on Improving Marketplace Sales, But Not Revealing Many Plans

Slide 23 from Etsy's 4th quarter 2023 earning report, © Etsy. it shows what percentage of sales each major category has, with performance in the quarter.

Etsy’s fourth quarter results for 2023 were as uninspiring as expected, but despite revealing few plans, the corporation is convinced it can increase gross marketplace sales through its gifting and other initiatives. There was a lot of interesting information for shop owners, though, so let’s get right to it. 

First, here are the resources that you should read/watch yourself, if you want to know more:

the press release

transcript of the conference call

slides from the conference call

video of the call (click on “Webcast” under “Latest Quarterly Results”)

my summaries of the fourth quarter 2022, and the third quarter 2023 for comparison

Then, the basic numbers (covering October to December 2023, compared to the same period in 2022):

Sales on Etsy were $3.6 billion, down 1.4% year over year

Total sales for all 3 marketplaces (Etsy, Reverb, and Depop) were $4.0 billion, down 0.7%. [Elo7 was officially sold in mid August; its numbers were still included in the comparison totals of 2022]

Etsy’s revenue (including all 3 sites) was $842.3 million, up 4.3%

Seller service revenue was up 9.4% to $226.5 million, while marketplace revenue was up 2.6% to $615.8 million

Net income was $83.3 million, down 24% (mostly due to the layoff costs of $27 million in the quarter)

Active buyers on Etsy alone stand at 92 million, a third consecutive all-time high

Active sellers on Etsy alone are now 7 million, the fourth large jump in a row compared to the previous quarter; numbers had been stagnant through the end of 2021 and all of 2022 [Note that “active” means one charge or transaction in the past 12 months; many “active” shops currently have nothing for sale.]

Sales where the buyer and/or the seller was not in the United States were 45%, up from 44% last year, but down from 47% in the previous quarter

Sales on mobile are 68%, up from 67% last year [this includes both the buyer app and mobile browsers]

As always, I am reporting what Etsy’s representatives said in the main text, with my commentary in square brackets.

Etsy Search

At the moment, Etsy’s search algorithms aim to show shoppers things they are most likely to buy. They are currently working on changing that to showing what buyers are most likely to love after the purchase. They refer to items that consistently get high reviews, have good photography, and whose shop owner provides good customer service, has quality return policies and ships on time, as “quality” items, or, “the best stuff.” 

This is all a work in progress, so search may not change drastically any time soon. Past calls and interviews have related this to the increase in Etsy Picks assigned in the past few months; they plan on using those Picks to train the algorithm to find “quality”, especially quality photos. The items staff identify as “quality” convert twice as well as other listings, so there is obvious benefit to Etsy showing them higher up in search results. 

Etsy has added some of the features in its “neural ranking model” to non-US searches; previously it was only in the US searches. 

Advertising

Offsite Ad spending was down 4% in the quarter vs. 2022, in part due to competition bidding higher than Etsy thought was worthwhile. At the time of the call, that spending was back to normal. Per slide 21, money from Offsite Ads fees covered about 35% of what Etsy spent on the ads during the quarter. 

CEO Josh Silverman explained why the performance marketing (Offsite Ads) spend can be unpredictable.

“So performance is dynamic on a, really, hour-to-hour basis depending on the ROI we're seeing on every dollar we're spending. And we've got pretty sophisticated algorithms that work on, is this bid -- is this click worth this much right now and how much should we bid. And so to the extent that CPCs rise, we naturally pull back, or to the extent that CPCs lower, we naturally lean in. The other thing, by the way, it's not just CPCs, it's also conversion rates. So in times when people are really budget constrained, we see them actually -- we see conversion rate across the industry go down. We see people comparison shop a lot more. And so we are looking at all of that. And not humans, but machines using AI are looking at a very sophisticated way of what's happening with conversion rate right now, what's happening with CPCs right now.”

Etsy also does testing twice a year where they stop running ad such as Google Shopping ads in part of the country, and then compare with the areas still advertising to see if the buyer still would have bought. Silverman admitted that the data shows “often the answer may be yes.”

Overall marketing costs went up 7% in the year. 

The Gifting Initiative

Etsy is now aiming to brand itself as the place to go to buy gifts. Gift Mode is just the start of this campaign. Their surveys report that more than half of US gift giving is based on personal occasions that occur year round, such as birthdays, or “just because”. People in the US spend an average of $1600 a year on gifts, but Etsy’s US buyers only average $38 spent per year on gifts from Etsy. They estimate that less than half of Etsy buyers in 2023 used the site to buy at least one gift. There is obviously an opportunity to do better. 

The percentage of US residents thinking of Etsy as a good place to buy a gift is now down to 10%. [Previously, the company reported it was 12%, and I commented last quarter that I’d like to see a more recent survey to judge if they have used this knowledge to improve. 

“Only 12% of buyers will name Etsy top of mind as the place to shop for gifts.” They don’t seem to have any updated numbers showing how they’ve been improving that situation. [It’s time to go after that “enormous opportunity”, Josh!]”

So despite wanting to grab a bigger gifting share before now, Etsy has managed to lose ground. This is my biggest fear about the gift push: the market was there before now, and Etsy’s own research demonstrated that. Are they only going all in now that they have run out of other ideas?] 

There were 6 million visits to Gift Mode in the first 2 weeks. [I am not really impressed, given that they promoted it very heavily, and I was personally responsible for over 100 of those visits while researching my Gift Mode blog post.]

Other plans to bring in buyers

Silverman stated “[o]ur focus will be to make Etsy even more Etsy”, and to differentiate the marketplace from sites that sell everyday needs. The following quote deserves to be read in full:

“Most other players are competing head-to-head to sell the exact same merchandise, focused on selling at $0.02 cheaper or shipping it two hours faster, and this has resulted in the commoditization of the entire experience. But that's just not Etsy.”

[This seemed to be a completely unironically-intended comment, with no recognition of the fact that he actually discussed speeding up shipping times in the same presentation, nor of the well-known fact that so much on Etsy these days can usually be bought cheaper on Aliexpress or Shein.]

He also said that the “special” aspect of Etsy is what sometimes holds the site back, as buyers might consider Etsy limited to specific items, or might “worry about the post-purchase experience”. Bringing people back more often is a goal. [They’ve been saying that for years now, though.]

The company is currently doing buyer loyalty program research, but gave no further details. He also cited “shortening our estimated delivery dates this year by at least 2 days” as something that buyers should like, but it is unclear to me reading this if the work done last year (the year discussed in this call) already shaved 2 days off of delivery dates, or if the statement is this year’s goal. I think it is the latter [but the only ways to do that are to improve the accuracy of their tools - and I am not sure that they are currently 2 days longer than reality on average - or to pressure sellers to ship faster. Since Etsy is once again updating shop settings to add weekends to shop processing times without notifying us, I guess we can assume the latter? UPDATE (Mar 19): Silverman clarified at a recent talk that "we think we can cut shipping times on Etsy by at least two days this year."]

Other things sellers need to know

Etsy Ads now involve some localization outside of the US, which increased conversion rates. [If your ad performance changed in non-US countries during the quarter, this is the most likely reason.]

Neither sales or Etsy’s revenue are expected to increase until the second quarter, and they expect revenue to grow faster than sales this year. [Revenue is almost certain to increase, as the corporation has been surveying sellers on what they would be willing to pay more for.]

“In 2023, we removed approximately 140% more listings for violations of our Handmade Policy than in 2022.” [No word on how many of them were removed erroneously, though, as we know the “Temu” bots pulled a lot of truly handmade items that had photos stolen and listed on other sites.]

Silverman promised “innovation planned to improve the predictability of shipping costs for both buyers and sellers”, but provided no details. [I am not sure what would make my personal costs more predictable, given they change every single week with Canada Post’s fuel surcharge right now. Is it going to be forcing people to use Etsy Labels with calculated shipping? Or is this more calculated shipping options for countries outside of the US, and for new carriers? Restricting the amount a listing can charge for shipping? I really have no idea, but I hope all those people they hired for “fulfillment” jobs a few years back are coming up with something that is actually useful.] 

Miscellaneous

Depop had a decent quarter in sales and revenue. 

Reverb sales were flat. “The Reverb team made some organizational changes late in the year” which are expected to be profitable [i.e., they laid off over 30 people in October].

The Etsy layoffs in December were referred to by CFO Rachel Glaser as “our recent workforce realignment”. [At least she didn’t call those former employees churn.] The call provided no details on the restructuring they previously said would be done by the end of this quarter. 

October sales were not good, but November and December improved. January “was a little bumpy.”

Outside of the US, sales in Germany were mostly steady, while the UK, Netherlands, Switzerland and Austria improved.

The upcoming $15 fee for newly-opened shops will largely go to paying the costs of the technology for vetting sellers; it is not expected to result in much profit. 

My thoughts: this is going to be a rough year for many Etsy sellers

As I discussed last quarter, Etsy’s upper brass didn't seem to think they were responsible for the lackluster sales performance of their marketplace, and this quarter that extended to not admitting they overhired since early 2022, and not acknowledging that Etsy’s reputation as a gift site actually dropped over the past few years. The last one is particularly galling. Why keep talking about how there was great room for improvement in Etsy brand recognition for gift buyers and then fail to improve even a tiny bit? What were these folks doing the past 2 years? 

It’s clear they think bravado will get them through this, including the bold move of claiming everything will improve in the second quarter and throughout the year without revealing any real details. No wonder the stock dropped yet again. 

That said, they likely have some reasons for thinking that revenue will pick up at least, if not sales. As mentioned above, they have been extensively surveying sellers about raising fees and/or charging us for things we currently get for free (or mostly do not want). Possible downsides for Etsy include the fact that the Indie Sellers Guild and the Artisans Cooperative (among others) are likely to get more negative press for Etsy if fees are raised yet again, just as happened in 2022. It does not help that Etsy didn’t really follow through on improved services the last time they raised fees. 

And the more I think about the comment on shipping costs, the more I believe they are considering making Etsy Labels compulsory for at least some in the US, with set shipping charges sellers won’t be able to change. Bonanza did this last year, charging its US sellers $2 per order extra if they didn’t use Bonanza labels and didn’t get an exemption from the program. Most Etsy sellers using the labels and being forced to show that price as the shipping cost for buyers is the only way I can think of making shipping prices more predictable for buyers, other than capping shipping charges outright (and that sounds like a nightmare to implement). eBay does it, though. Am I missing something? [UPDATE Mar. 5, 2024: Etsy is surveying buyers about how much they like cheap shipping.]

Perhaps more importantly, the planned search changes have the potential to disrupt the status quo a great deal. We know that Etsy frequently takes a lot longer to develop these types of technologies than they expect, so it may not happen this year, but the work on promoting “quality” listings will continue, and that is already affecting some shops that used to do better in Etsy search. Do everything you can to make sure your images are "high-quality". If you rely on internal search to get most of your Etsy sales, this is a very good time to follow my usual advice and diversify your traffic sources. 

Etsy’s branding pivot to being the place to get gifts could also have a big impact on some shops and categories, if it is successful - and that is a big “if”. I’m not thoroughly convinced Etsy can manage this change in consumer consciousness, considering that the site’s reputation continues to be hammered by controversies around scams and non-handmade items. Kitkats, anyone? 

Many other comments do not bode well for most shop owners: a continuing push for discounting, emphasis on faster shipping times, and financial restrictions/impositions on “newly-opened” shops all indicate that traffic may flow away from small business owners who choose not to comply, or are unable to comply. 

Last quarter I said “[d]on’t be surprised if there are major site changes in 2024”, and I appear to have been correct. But really, anyone reading these reports over the past few years could have seen it coming.

Stay well informed, everyone! It’s the best weapon we have.

Reminder that you can sign up to receive my Tumblr and website blog posts via email.

UPDATED March 19, 2024

#ecommerce #EtsySellerNews #etsy #microbusiness #cindylouwho2

[cindylouwho2personal]

Why not?

Just in case there are fewer ways to find me in the next little while, I’ve started this Tumblr for personal musings and updates. 

Here are all the other places you can find me: https://www.cindylouwho2.com/find-cindylouwho2

#TwitterRefugee

[cindylouwho-2]

ETSY REMOVING SOME LISTINGS THAT WERE SYNCED WITH CERTAIN SHOPIFY APPS

Not sure what to make of these reports, so I have been investigating them for almost a week now.

Several Etsy sellers report they have had multiple listings deactivated on Etsy, and cannot get the corporation to reinstate them. The items cannot be reactivated or even copied; some of them had been available on Etsy for years before this occurred. See the Etsy forum thread here: https://community.etsy.com/t5/Managing-Your-Shop/Etsy-to-Shopify-Migration-and-Integration/td-p/143741960

Etsy sent an email to most, informing some of the shops that the apps they were using to sync their Shopify sites with their Etsy shops were breaking Etsy Terms of Use and "violated our Intellectual Property Policy". This link was included for the API Terms of Use: https://www.etsy.com/legal/api/#:~:text=You%20grant%20Etsy%20a%20non,you%2C%20including%20but%20not%20limited

It highlights the following incomplete passage: "You grant Etsy a non-exclusive, worldwide, royalty-free, irrevocable, sub-licensable, perpetual license to use, display, edit, modify, reproduce, distribute, store, and prepare derivative works of any information you provide in connection with the API to enable the API to Etsy members and you, including but not limited..." - so, not very informative.

There are multiple points in the API Terms of Use that may have triggered this, but the app owners themselves aren't publicly identifying any possible issues, except again the mention of intellectual property. Some of the apps may have been using Etsy's marks and other material inappropriately, or possibly even the text and images belonging to the small business owners who used the apps. We just don't know.

At least some of the affected shops are clearly handmade, and appear to be using their own images. It is possible that some of them had their photos stolen and used elsewhere, triggering an image bot on Etsy, but it seems odd to hold the app responsible for the shops being accused of copyright infringement if the shops are being told they can just make new listings.

Another problem is, Etsy doesn't identify which apps (some shops tried more than one). In a few examples, it appears the app was disconnected before Etsy deactivated the listings.

Etsy Offers No Suitable Solutions

Etsy Support staff have provided no help to the affected shops. Business owners who have complained have been told they can just "create a new listing" to replace any that were deactivated in this sweep. Of course, this means the entire listing history is lost, harming the shop's search ranking, removing the reviews on that product, and making bookmarks or favourites for that page useless. Right at the beginning of the holiday shopping season! For older listings, the seller might not have the images available any more, and there is no way to copy them on Etsy.

This is an extraordinary punishment for people who don't seem to have knowingly done anything wrong. There simply doesn't seem to be any reason to permanently remove certain product listings from Etsy just because they were syncing inventory with another site. Removing temporarily, yes, but not permanently. This might make sense if the apps were adding things to Etsy listings that shouldn't be there, but we have no evidence that was the case, and the deactivation could be reversed if the listing were fixed. Letting shops off with a warning seems like more than enough action, especially since there is no way to know which apps are approved by Etsy and following Etsy's rules at any given time.

Not surprisingly, some of these business owners feel that Etsy is punishing them for trying to run their own websites instead of just selling on Etsy. While that is far from the most obvious answer to the puzzle - most known inventory apps were not involved in this set of takedowns - it's understandable that sellers might feel this is retaliation instead of rule enforcement. Any reputable site enforcing rules so harshly would need to be transparent about that risk beforehand, right?

Please contact me if you have more information on this situation, so I can update the seller community.

#etsy #ecommerce #shopify #EtsySellerNews #cindylouwho2

[cindylouwho-2]

Etsy's new Gift Mode is a real embarrassment for the corporation - did you know they are suggesting dangerous gifts for infants?

That said, I also give sellers some info that will improve their chances in appearing in Etsy's latest toy. Please give it a read!

#ecommerce #EtsySellerNews #etsy #EtsyNews #microbusiness #cindylouwho2

[cindylouwho-2]

RECENT SEO & MARKETING NEWS FOR ECOMMERCE, March 2024

Welcome to my roundup of SEO and marketing news and useful resources for ecommerce businesses, March edition. There is a lot going on with Google, and some really strong marketing pieces this time around, so let's get right to it.

SEO: GOOGLE & OTHER SEARCH ENGINES 

Google launched both a core algorithm update and spam updates on March 5, with the spam update ending on the 20th. Core updates now include the Helpful Content algorithm. In early observations, Etsy and Reddit both picked up visibility in the UK. 

The Helpful Content algorithm updates late last year destroyed a lot of sites’ Google traffic. Avoid the things they had in common.  You can read the full study here. 

Ecommerce sites were some of the biggest losers in Google visibility in 2023, with Amazon, Walmart, eBay, Etsy, Target and Best Buy in the top 10 of sites whose Google appearances slipped. 

New to Google SEO? They’ve revamped their SEO starter guide for people like you. And if you are more advanced and want to learn how to optimize your website product pages, this is a good overview. 

This lengthy article on backlinks for ecommerce websites covers pretty much all the angles, including the really difficult ones. 

Reminder that if you want to rank on Google for a search term, you need to look at what is already ranking, and make decisions based on that content. [video and transcript] This works for most search engines, not just Google. 

Yes, Google crawls “high quality” content more often. I used to refer to this as Google thinking the page is “interesting”, so I guess I will need to change my wording...

While Google sends the most traffic to websites, people spend a lot more of their online time elsewhere. Market where people are, not just where your stats say they came from. 

Sadly, Google has stopped providing caches of website pages in its search results. While you can still see the caches of some pages by using the Google search Cache:[page link] as in cache:https://cindylouwho-2.tumblr.com that will eventually stop working as well. Bing still provides caches, but unfortunately both it and the Wayback Machine do not crawl often enough to give really recent results most of the time. 

Missed Google news in February? Here’s your update. And just in case you are really behind, here is January. 

Not Google

Unsure if your website has enough good backlinks? Bing Webmaster Tools will now tell you if you don’t. 

Yandex - the top search engine in Russia - was sold by its Dutch ownership group to a consortium in Russia. 

SOCIAL MEDIA - All Aspects, By Site

General

A US study of social media use found that the most popular site was YouTube, with 83% of adults using it. Two-thirds of American adults use Facebook, while TikTok is up to ⅓ of the US population. 

Because they do change periodically, here are the latest image and video sizes recommended for the top social media platforms. [infographic]

Bluesky is now open to everyone - it was previously invite-only. 

Facebook (includes relevant general news from Meta)

Meta has introduced several changes to its Ad options, applying to Facebook and Instagram. 

Meta had a great 4th quarter in 2023, with revenue, users, and earnings per share up. “Fast-growing upstarts Temu and Shein, which originated in China, have been pouring money into ads on Facebook and Instagram. Li said on Thursday that revenue from China-based advertisers accounted for 10% of sales for the year and 5 percentage points of growth.”

Instagram

An updated post on Instagram's algorithm and how it works. 

Instagram is still beta testing longer Reels for some users. 

If your account is a brand account, you can now run ads on Instagram with coupon codes right in them. (Some Facebook users can already do this.)

LinkedIn

Among other recent changes on LinkedIn, the algorithm is now looking to boost important content longer than just the first day or two after publication. 

Pinterest

Pinterest has its own stats package, called Pinterest Analytics, but only for “Business” accounts. They show how many people clicked on the outgoing links, how many people saw your pin on their screen, and much more. Here’s everything you need to know. 

Reddit

Reddit successfully launched on the stock market this past week, but questions remain about how this will change the site. 

Google is paying Reddit to scrape its content through the API instead of from the web. 

Snapchat

Snap was a little later than most tech companies doing layoffs recently, waiting until February 5 to let 10% off staff go. 

Threads

Threads is so new that the algorithm is bound to change a lot in the next year, but for right now, here is how it works. 

TikTok

There is an overwhelming amount of info out there on the US attempt to either ban TikTok or force its sale, and much of it is incomplete, so I will let you Google to your heart’s content if you want to learn more. If you are relying on TikTok to drive sales, this would be a good time to make sure you diversify your promotional strategy. 

You can now track trending terms on TikTok through the Creator Search Insights section. “Creator Search Insights will highlight frequently searched topics, which creators can organize by category (for example, tourism, sports, science) or tailor to their content type with the “For You” option. Additionally, creators can filter for “content gap” topics, which are highly searched but have relatively few videos on TikTok covering them.“

TikTok may be testing a photo app, which would obviously compete with Instagram. 

Twitter

What? Twitter may have lied about its Super Bowl ad performance? I’m so not shocked. 

Tumblr

Tumblr will be selling data access to AI companies. 

YouTube

This is a pretty decent article on YouTube SEO. 

(CONTENT) MARKETING (includes blogging, emails, and strategies) 

Small and micro-businesses need an email list. An email list is:  

portable (unlike most social media followers or marketplace buyers) 

is available to almost everyone, as we all need at least one email address if we are online

less susceptible to the whims of algorithms (unlike SEO, marketplaces, social etc.)  

I keep seeing people argue that no one opens emails, but the chart in the article above is proof that is still wrong. (My blog email list averages close to a 70% open rate, depending on the topic and the time I send it. My jewellery email list - which I hardly ever send to - still has an over 30% open rate. My click rates are well above the industry averages, usually 30 to 40% of all recipients for the blog list. These are much better numbers than social, and astronomically better than my clickthrough rate on Google and other search engines.)

Gmail and Yahoo both changed how they handle bulk emails such as newsletters in February. Here’s what you need to know on the basics, including authenticating yourself so your email gets through. 

Find out how to get people to read all the way to the end of your content. 

Get ready for April marketing with 5 topical ideas. National Handmade Day is April 6. 

We should all think twice before deciding to use AI to create content. “Circa 2024, generative AI does not produce new ideas or even develop its own conclusions. Rather, it regurgitates information that it has indexed.” Not convinced? Here’s another article. “AI-generated content represents the literal “average of everything online.”

ONLINE ADVERTISING (EXCEPT INDIVIDUAL SOCIAL MEDIA AND ECOMMERCE SITES) 

Google Ads can now be tracked in Google Analytics 4. 

Both Google Ads and Microsoft Advertising were up in the 4th quarter of 2023. 

STATS, DATA, TRACKING 

Google Analytics 4 tracks organic traffic differently than the previous version. Here’s how to figure it out. 

BUSINESS & CONSUMER TRENDS, STATS & REPORTS; SOCIOLOGY & PSYCHOLOGY, CUSTOMER SERVICE 

I’ve probably posted this specific article before, but it is worth another read: how to communicate with customers.  For example, “Mirroring your customer’s tone lets them know you’re on their side. If a customer is formal, for example, hold back on the LOLs. If they’re more casual, relax your tone.”

According to a US study, Generation Z is skewing the traditional marketing funnel. “Per Archrival’s data, 77 per cent of Gen Zs and 79 per cent of millennials in the US are actively seeking style inspiration at least monthly, with almost half of those looking for style inspiration on social media. When asked where they learn about new brands, products and experiences, video reigns supreme: YouTube is the most popular platform with Gen Zs, followed by TikTok, then Instagram.”

Trend alert: bag charms are back. 

IMAGES, VIDEO, GRAPHIC DESIGN, & FREE ONLINE TOOLS

Almost all of these 12 video tools are free, and some can be used on your phone. 

MISCELLANEOUS

This is an older piece, but it checks out: IKEA Hacks for Craft Show Displays. A few of these could be done with non-IKEA items. 

Want to stay up-to-date on a nearly daily basis? Follow me on Bluesky or on LinkedIn, or become a member of my Patreon.

#ecommerce #seo #social media #search engine optimization #microbusiness #content marketing #cindylouwho2

[cindylouwho-2]

RECENT ECOMMERCE NEWS (INCLUDING ETSY), March 2024

Since I wrote so many articles on Etsy in the past 2 months, it took longer than usual for me to get the full ecommerce update out. Sorry about the delay, but here it is!

For fresher and more frequent updates, please follow me on Bluesky or on LinkedIn, or become a member of my Patreon.

TOP NEWS & ARTICLES 

Etsy’s fourth quarter 2023 financial results came out February 21; I did a deep dive into all the announcements here. In short, there are a lot of new things coming, and some changes that may have affected some sellers already, including:

plans for more predictable shipping costs for buyers and sellers (what does that mean?)

Etsy Ads are now localized outside of the United States

search will be shifting to boost "high quality" items, going from highlighting what shoppers are most likely to buy to what shoppers are most likely to love

a buyer loyalty program is coming

the goal of “shortening our estimated delivery dates this year by at least 2 days”

This recent post on Bluesky indicates that Etsy is surveying buyers on what they would pay for shipping, which could be related to the “predictable shipping costs” mentioned. A recent Etsy presentation at an investor conference provided a few clarifications on points discussed during the 4th quarter call, and in previous interviews and announcements.

“Our research showed that 10% off is a waste in this market. It's not enough to drive an incremental conversion, so all you did is give up margin. So recently, you've seen us both change the default and talk to sellers about how if you're going to put something on sale in this environment, it needs to be at least 25% off.” [my emphasis] Silverman has previously mentioned that buyers want discounts these days. 

Since the information sellers provide when listing (i.e., titles, tags, descriptions, attributes) “is not always very reliable”, Etsy uses image recognition to classify items as well

They are working on improvement for international fulfillment

Most orders on Etsy aren’t impulse buys; 70% involve 2 or more visits, and 50% involve 4 or more visits

“only one out of every three women in the United States bought something on Etsy last year…. only one out of every 10 men bought something on Etsy last year.”

Etsy’s use of AI in places such as Gift Mode is not in-house. (We already knew they used OpenAI’s GPT-4 for Gift Mode.) 

eBay increased the transaction fee from 30 to 40 cents as of March 15, for all orders over $10. 

An Etsy fee increase of some sort is likely coming soon, as Etsy has surveyed sellers on which options they would most prefer. While I was not picked to take the survey, a few people who did have contacted me with screenshots and details, which I wrote about in some detail. 

Packaging laws are becoming quite onerous for some ecommerce microbusinesses, but fortunately the Etsy forum crew has helped out with a recent summary of which countries in Europe require registration or payment to ship into the jurisdiction. Thanks to Claudia of https://www.etsy.com/no-en/shop/DoceVikaVintage for doing most of the legwork. 

ETSY NEWS 

Etsy is once again changing some sellers’ processing days, adding Saturday or Sunday into the mix when the shop owner only selected Monday to Friday. Some are seeing a notice on their dashboard, while others received an email.

Remember, in the 4th quarter 2023 earnings report, Silverman said “shortening our estimated delivery dates this year by at least 2 days” was a goal, and unilaterally changing your processing times is one step towards that goal. Please check your shipping settings, as this could mean you need to ship earlier than you realize, and Etsy could put you on reserve, remove your Star Seller badge, and deny you Seller Protection when you ship later than Etsy thinks you should.

If that wasn’t bad enough, some sellers are reporting that Etsy has changed the timing of sending the Abandoned Cart discount to almost immediate, and changed the official Help file on the topic to say the coupon was sent just 2 hours after the listing was carted, down from 24 hours. Others say they can no longer deactivate these coupons, and that Etsy Support told them it was a known bug. 

If you want to learn how Etsy's algorithms work and what they favour, the company has added more details on "recommendations" modules we see all over the site to the legal policy page. I've written a short piece highlighting what sellers should pay attention to if they want visibility on Etsy.

Etsy is adding Regulatory Operating Fees to orders in India (0.29%) and Vietnam (1.24%) as of April 1, 2024. On the same day, the Regulatory Operating Fee in Spain will increase to 0.72% (from 0.4%), and the fee for Türkiye goes up to 2.27% (from 1.1%).

The Prohibited Items Policy has been updated in several places, as of March 5 2024. Some of the new sections are covered in this article. As always, the most important parts of these changes will be how Etsy chooses to interpret them, so for the moment I don’t have any further comment, other than to say these types of changes are sometimes driven by law, and sometimes by previous incidents in which Etsy is unhappy with the outcome. 

Looks like businesses in China will soon be able to use Etsy Payments, meaning new shops in China may be able to open for the first time since 2021. (It's not unusual for Etsy to beta test new countries before announcing them officially; it’s hard to say if that is what is happening here or not.)

Etsy's forum restrictions - requiring a signed-in seller account to view most posts - will start on March 26. Only posts in the Announcements and Technical Issues sections will still be visible to everyone. 

There has been some speculation that this is to reduce spamming of Etsy sellers after they post, but the change will also have the bonus of journalists, investors and others not being able to read Etsy sellers' complaints about the platform.

It’s possible to have your product photos featured on the persona page of Etsy's Gift Mode but not have the product available for sale in Gift Mode. I’ve checked several times, and have never seen that seller’s embroidery piece in the featured listings. If you missed my blog post on Gift Mode, check it out here. Note that Etsy seems to have made some changes since I originally released the post. Among other Gift Mode promotions, Etsy employees rang the opening bell at Nasdaq the day after the Super Bowl. Did you know that this year’s Super Bowl was the most watched show in the US since the 1969 moon landing? Etsy hired Drew Barrymore to promote the corporation's new gifting push, which will continue all year. And the company has also released a new “gift teaser” email that buyers can have sent to recipients, which is useful for last-minute shoppers. 

Elliott Management now owns 13% of Etsy shares and options - making it the largest investor -  and now has a board member at the corporation. Known as activist investors, they usually force companies to cut costs ; for example they pressured “Salesforce, in which it has a multibillion-dollar investment, to harsh new policies for engineers and salespeople aimed at reducing headcount.”

Newly-opened Etsy shops will soon be subject to stricter ID requirements, a $15 fee, and longer holds on their early sales; I covered the details we know on LinkedIn. 

If you use the new listing form, you may see a new pricing tool pop up. (It’s not on the old listing form.) Ridiculously, Etsy calls it an “estimated profit calculator”, when really, it’s just an Etsy fee calculator, and not a good one at that. It includes the lowest processing fee possible (some countries have a range of processing fees) and also excludes taxes you may pay on your fees. I don’t know if it includes country-specific fees such as regulatory fees, as Canada does not currently have those.

Etsy has several sales events coming up, including the “spring refresh” which has already started and continues until April 15. 

There are reports of Etsy now advertising its commercials in Canada, which is a first as far as I know. 

Struggling to update your tax information on Etsy? One tip is to use a different link to enter the updates. Another is to use a pdf or png file, not a jpg, when uploading documents, and to combine multiple documents into one. If Etsy is asking your LLP/LLC or corporation to upload ID, I’ve had multiple people report that personal ID should work, even if the wording of the page says it won't. 

If you are frustrated by the recent Etsy test removing the total number of items in a search, I explained here how to determine the exact number of results if there are less than 16,000 listings. Also, you can just try another browser or device because it is a test (I do not have it on desktop). 

Remember when The Smiley Company sued tons of small sellers for trademark infringement, and asked for damages? Some Etsy sellers fought back - and won.

Who is removing Taylor Swift-themed items from Etsy - the artist, or the marketplace?  Swift has sent cease and desist letters to Etsy shops in the past. 

The articles about Etsy being awash with non-handmade and counterfeit goods never end. Here’s one from Australia. Here’s one about Etsy sellers publishing fan fiction that is already free on the web and charging a huge amount. And the media attention to deepfake porn on Etsy also continues. AI use is also subject to media scrutiny. 

TikTok’s push to attract more sellers apparently involves approaching Etsy shop owners. [soft paywall; Modern Retail] 

Josh Silverman has sold off most of his remaining Etsy stock. 

I did a short report on who Etsy laid off in December. 

The scammers advertising a fake Etsy customer support phone number on Google are catching buyers too - why can't this be stopped? "Anyone looking to contact Etsy for customer service issues should be aware that there is no phone number to contact for Etsy support." It’s a big problem that Google seems unable to control, given this study on other fraudulent Google Ads.  

Speaking of scammers, there is a new version of fake copyright takedowns affecting numerous sellers; the person who files the DMCA then offers to remove it for a fee, or even file takedowns against your competitors for a bigger fee. Etsy did fix the first round after 3-4 days, but the perpetrator then filed new DMCAs from a different email address. 

ECOMMERCE NEWS (minus social media)

General

Michael’s Makerplace is beta testing selling third-party items in Michael’s brick and mortar stores. “Michaels says that MakerPlace garnered interest from thousands of sellers during its initial beta period, mainly through word-of-mouth. The company declined to disclose how many sellers are on the platform currently and is now focused on growing customers for those vendors to sell to. Buchanan says the next month will be "critical to make sure [the platform gets] some mass engagement from a buyer perspective."

Some Depop sellers had issues with deposits recently, with the money never being sent to their bank accounts, and instead the deposit was continually rescheduled for the next day. This may or may not be related to similar issues on Etsy. Depop is also immediately scrapping seller fees for the UK (as long as the account sells in GBP), but is adding a 5% fee for buyers in the UK as of April 15. Clearly the site thinks it has more UK demand than UK inventory, and that at least some of those buyers will pay for the ability to buy second-hand. Depop press release. 

Beni is a new “secondhand search engine” that pulls up used apparel from multiple different marketplaces such as eBay, Poshmark, and ThredUp. It offers an app and a Chrome browser extension. 

Temu is subject to a class-action lawsuit claiming that the company’s app is highly intrusive and can read "literally everything on your phone." Also, businesses in the United States can now sell on Temu. 

There are many different platforms and marketplaces to sell digital products such as ebooks, templates and courses; here are 20. 

Amazon

If you sell on Amazon, make sure you have 2-factor authentication set up, as it will be a requirement starting March 28th. Users will need a mobile number or authenticator app. 

Amazon is using generative AI to create new listings for merchants who enter a link of the product on another site. “The goal is to help sellers reduce the time it takes to bring the product from a different website onto Amazon.”

If you don’t use at least 3 images per product page, Amazon will now add in photos from other merchants on the site. 

Amazon had a strong fourth quarter in 2023, beating all estimates.  Amazon Lending has been discontinued, but existing loans do not change until the term ends.

eBay

eBay agreed to a $59 million settlement in the US Department of Justice’s case regarding the selling of tools to make counterfeit drugs. The company must also modify its restricted items policies. 

eBay joined the layoff race on January 23 when it let go 9% of its staff (~1000 people). Those layoffs were spread throughout the company, including plenty of engineers, legal and PR staff, and several recruiters, as well as authentication staff. The company also made upper-management changes. 

eBay’s 4th quarter financial results were up a bit, but active buyers keep dropping. 

Jewellery sellers in the UK faced an across-the-board fee hike as of March 7, adding 2% to the final value fee. This appears to be related to covering the authenticity process, which only applies to certain items above £500. 

Be careful when you confirm your Promoted Listings Standard campaign on eBay - a few sellers report accidentally upgrading to a far more expensive Advanced Cost Per Click campaign.

Walmart

Walmart is offering discounts for new sellers, covering part of fees for up to 90 days. 

If you sell on the Walmart marketplace, beware of the new rules on making authenticity claims.

Payment Processing

Klarna is now offering a monthly subscription to be able to use it at brick and mortar retailers without additional fees. The Verge speculates this may be related to Klarna’s rumoured pending IPO. The company has also employed an AI chatbot to do the work of 700 customer support employees. 

A US study reports that at least 20% of US consumers have used buy now, pay later options at least once. 

PayPal joined the tech layoff trend, getting rid of 9% of staff in January.

Venmo settings are public by default; here’s how to change that. [Washington Post gift link]

Shipping 

Is “free shipping” becoming less common? It appears so. [soft paywall: Business Insider]

Apparently USPS has significant delays in the Atlanta area, leaving packages in limbo for weeks. (Strangely, I had a shipment held up in Atlanta in late January even though the new processing centre did not open until February 24, and that package was finally delivered last week.)

Good basic post on return policies (from a Canadian perspective). Note that half of those surveyed say that return policies affect their purchase decisions.

Canada Post has sold its logistics and IT companies as it struggles to become profitable, and may be looking towards more ecommerce options. 

UPS will be laying off 12,000 employees this year, to save around $1 billion. The company is also starting to deliver to homes on Saturdays in major Canadian cities by March.

That's it for now! I hope to have the full SEO & marketing report out next week.

#EtsySellerNews #etsy #ecommerce #microbusiness #cindylouwho2 #how to sell online

[cindylouwho-2]

That Etsy Seller Survey Everyone Is Talking About...

Some Etsy sellers are getting worried about a survey the corporation sent out to some shop owners, asking them what they would be willing to pay for different tiers of service (like Etsy Plus, but with many more options). The key point that was most publicized was a potential listing fee increase to 40 cents USD from the current 20 cents, unless the shop purchased a higher tier of service per month. That was far from all that was covered, however. 

I did not take the survey - which apparently had the usual non-disclosure agreement (NDA) attached - but a few sellers have sent me more information on it. I am not going to publish the screenshots I received, or the written descriptions, as I have too few examples to be sure that Etsy did not send out more than one version. Thank you to my anonymous sources, who will remain protected. 

I will, however, reveal a bit more about some of the options Etsy proposed. Let me clear up a few key points, and provide some thoughts on where Etsy is going.

Not everything Etsy surveys us on gets enacted

I am not saying that Etsy won’t raise any fees - they have to find some more money to keep shareholders happy, after all - but we can’t be certain that a listing fee increase will happen, or that it will be 40 cents. Remember when people were concerned that free shipping would become mandatory? What about free returns? There have been lots of scares like this in the past. In fact, Etsy apparently sent out surveys before this particular one, asking what we’d pay extra for, and some of the options do not seem to be included in this week's survey. (And yes, those other surveys reportedly had an NDA attached as well.)

This survey largely seemed to be designed to determine how much they could squeeze us without losing too many sellers. 

Not every set of service tiers included a listing fee increase 

There were options where no one - not even the free tiers - would see a listing fee increase. 

Listing fee increases are not necessarily the worst option Etsy floated

One of the scarier possibilities that came up more than once was limiting the number of listings (presumably including renew sold and renew expired) to a very small number a month unless the shop pays monthly for a higher tier of service. The lowest number of listings mentioned per month was 5. To list more, a shop would need to subscribe to a higher tier, and pay a monthly fee. If you only listed 6 items a month, you’d be bumped to the next tier, and getting ripped off much worse than an extra 20 cents per listing (and in some versions in the survey, they included the listing fee increase in this option as well.)

This would bleed a lot of small shops dry before they could even get going. It also wouldn’t limit AI shops from uploading 1000 items because there were no listing limits mentioned on the highest tiers, which were relatively cheap when spread across a huge shop. 

Another possibility would take away the discounting tools, Share & Save, and the ability to be an Etsy Pick/featured seller/promoted shop from the free tier. This would limit some small shops’ development while tricking shops with no chance of ever being featured into paying monthly shop fees they probably did not need. 

Laughably, Etsy also floated the idea of including the pricing tool in the paid tiers. Why would anyone pay for that? It was garbage. 

UPDATE (Feb. 25, 2024): Ina Steiner published some more details from the survey on the EcommerceBytes website.

Should we be worried? 

Some shops should be worried, but not all of them. If you run an Etsy shop with less than a sale a day, it’s clear to me that Etsy doesn’t really want you any more, unless you have very high-priced items. You apparently aren’t paying enough to cover the cloud fees and the Support costs of keeping you open. The corporation wants to charge you more for things you already get for free, without improving your service, even though Etsy is currently turning a profit. New shops are also soon going to be saddled with a start up fee and longer reserve times, making it more difficult to start an Etsy shop if you aren’t already an established business. Additional fees for small shops after they start would just make that decision even worse. As I have mentioned many times, Etsy has too many items, and this certainly seems like one way to reduce the crowding.

If, on the other hand, you sell upwards of 100 items a month and have decent margins, the imposed tier rates could actually work out to far less than an extra 20 cents per listing, as the relatively low set charge per month would be spread across a lot of renew solds/renew expireds. For example, shops selling 1000 items a month would pay less than than 2.5 cents per listing extra compared to now. You’d also have access to additional opportunities and tools which may or may not be worth it, all included in that set charge. Some of these options would also potentially reduce your competition on Etsy, including the competition for being featured. If some of the tools work - and I admit that is a big “if” - you could actually come out ahead. If any of these changes happen, you might end up pleased with Etsy's decision.

Considering all the other changes Etsy is discussing right now, everyone currently selling there should review their business plans and make sure their income is well-diversified. 2024 will be a bumpy ride for many. 

Reminder that you can sign up to receive my Tumblr and website blog posts via email.

UPDATED: February 29, 2024

#ecommerce #EtsySellerNews #etsy #EtsyNews #microbusiness #cindylouwho2

[cindylouwho-2]

RECENT ECOMMERCE NEWS (INCLUDING ETSY), January 2024

Welcome to my first commerce news update of 2024!

Now that we are through the intensity of the holiday rush, I plan on getting a few of these out each month. Please follow me on Bluesky or on LinkedIn if you want more timely updates. (New ways to get updates coming soon!)

TOP NEWS & ARTICLES 

Some Etsy listings now have a link which displays some shop owners' names and home addresses under the seller contact info, which says “Meet your seller”. This may be legally required in some jurisdictions, including within the US if you don’t have a proper location on your shop, but here is how to remove it if you don’t need it. Here’s some of the info on the US INFORM Act which could require disclosure of your information; the EU and UK are other jurisdictions which sometimes may require this info if you sell to them. 

Reminder that UK small sellers may end up having their taxable income reported by the platforms they sell on starting for 2024. “The first deadline for firms to report details of transactions is the end of January 2025 – a year after the rules come into force. Bank account details and the cost of transactions made by sellers with sizable trading activity must be reported.” Etsy reminded shop owners that there is no change in taxes owed in the UK; the changes force platforms to report income so that people can’t evade taxes as easily. 

In case you missed it, many USPS rates, as well as forever stamps, went up again on January 21. Some label services such as eBay may actually offer decreases in certain categories, however.

ETSY NEWS 

Etsy announced 2 (very different) “privacy” changes at the beginning of January: limiting some third-party apps from receiving buyer email addresses, and making the Etsy forum a seller-only site in the near future. Shops will have to log in to read anything other than Announcements and the Technical Issues sections. We are not yet sure if this applies to shops in long-term vacation mode. 

Etsy teased a promotional announcement on Jan. 16, which is likely that the site will be launching Gift Mode [post by me with a link to another post with screenshots]. I’ll write more on that once it is officially released, but here is one of my screenshots from today, with lots of infringement. Also, the site is apparently buying a Super Bowl ad. This year’s ads are expected to cost at least $7 million USD. Etsy forum thread discussing both topics here. 

Etsy chose not to respond to this article about AI art sold as indigenous creations. “Etsy has a policy that prohibits users from selling items falsely listed as being produced by Indigenous peoples — but only in Northern America, and allows “Indigenous-style” products by non-Indigenous people.”

Some shop owners from Turkey claim their shops are being shut down at a high rate, with no explanation. At least some had issues with items that cannot be sold on Etsy, and there appeared to be some with ID or financial anomalies. I am still interested in hearing more, if anyone knows anything. 

EcommerceBytes covered the Etsy problems with the domestic pricing tool charging some international buyers domestic prices, which have been going on since May 2023. While some sellers have managed to get refunds from the company, others report no such luck. 

ECOMMERCE NEWS (minus social media)

General

The Indie Sellers Guild is running a virtual convention in April; read the panel ideas here. 

Amazon

Amazon product pages now have a link to get AI-answers to your questions. Expect to see a lot more of this on many types of sites. 

There are several keyword tools that can help you optimize your Amazon products; 5 are discussed here, but note that some may be pricy.

The latest layoffs at Amazon include people working for the “Buy with Prime” department. 

Amazon’s difficult-to-navigate system for suspensions and other punishments has led to entire law firms dedicated to supporting shops that have been closed or have had listings removed. 

BigCommerce

BigCommerce sites can now have a marketplace component, meaning that a single business site can now have other sellers on it. 

eBay

eBay had to pay $3 million over its behaviour in the cyberstalking case against Ina and David Steiner, owners of EcommerceBytes. The Steiners issued a victim impact statement; the civil lawsuit in this matter goes to trial in March 2025. 

eBay’s discounted Tracked Packet rate from Canada Post has been extended to March 31, 2024. 

Buyers and sellers are getting annoyed with long delays in product authentication. 

eBay called a few sellers and pushed them to offer cheaper shipping rates, based on the discounted rates for eBay’s labels. (They seem to have forgotten that they charge fees on those shipping rates.)

Poshmark

Poshmark’s recent policy changes included a class action waiver. Changes are effective February 5. 

All Other Marketplaces

Depop released its first Trends Report, similar to those put out by its parent company, Etsy. 

Bonanza is introducing a combo website builder/inventory integration and accounting platform called Vercado. Price will be $99 a month, so I strongly suggest investigating what - if any - advantages it provides over its competitors. 

Payment Processing

PayPal and Venmo are teasing some big ecommerce plans for this year, to be announced on Jan. 25. It involves use of AI, and the possibility of improving engagement rates. 

Shipping 

There have been numerous reports of major USPS shipping delays, especially in Texas.

#ecommerce #etsy #microbusiness #EtsySellerNews #EtsyNews #ebay #amazon #CindyLouWho2

[cindylouwho-2]

RECENT ECOMMERCE NEWS (INCLUDING ETSY), Early April 2024

Welcome to my coverage of all the important Etsy and other ecommerce news that microbusinesses need to know! It's been a few weeks since my last update, so there is a fair amount to report.

Want to get the news more often and in a more timely fashion? Please sign up to support my Patreon site, where among other features, I will soon be starting periodical live chats on important topics. (I promise there will be one the day Etsy announces a fee increase)

TOP NEWS & ARTICLES 

Etsy has made changes to how processing times and estimated delivery dates work; I covered everything you need to know in this post. 

Etsy seems to be sending more Messages to the spam folder, so you may miss a real message. After reading that thread, I checked, and there was one from another seller needing help from just 5 hours ago. Etsy did say engineers are looking into it. 

UPS has won the USPS air cargo contract, currently held by FedEx. It kicks in at the end of September. “As of May 31, 2023, FedEx counted the USPS as the largest customer of its Express unit.” 

ETSY NEWS 

Etsy is rolling out a new seller pricing tool, and it is just as useless as the old version. I posted some early thoughts (with screenshots). 

Some shop owners are struggling to cancel Etsy coupons, while others are not having the same problem. Support says the company is aware of the issue. 

If you still can't access most of the Etsy forum after the changes on Tuesday March 26, post in this Technical Issues thread so that your account can be fixed.

Periodically, some shops suddenly stop getting deposits. If your shop has recently had a security warning, you may want to check to see if your bank account is still verified with Etsy. 

Looks like Etsy has an issue with misrepresenting how many items are left for each listing on the app; I wrote about it here.

Canadians getting harassed by Etsy to sign up for TurboTax should know that the company has told a seller that it doesn’t import Etsy data into your tax return for you; that is only available for Americans. [If you can’t import your info from your various platforms, my suggestion is use a free online program to file instead; I’ve used Wealthsimple for several years with no issues filing small business taxes; the T-2125 is part of the program.]

Etsy’s activist investor seems to think that the marketplace can “…add more buyers and increase the amount of money they spend on the platform”. But “monetization opportunities” were also mentioned. 

Etsy is yet again called out for allowing AI-generated porn on the site. “Several of the available listings also appear to violate existing trademarks — TheStreet identified listings that sell NSFW (not safe for work) AI-generated, suggestive images that appear to mimic Rapunzel from Disney's "Tangled," Princess Jasmine from Disney's "Aladdin" and She-Hulk from Marvel's "She-Hulk."

Etsy has been talking a lot about "image quality" lately, but doesn't really define the term anywhere. While I agree with those that say it is more than image size - Etsy would not have humans curating images to train its AI if "quality" could simply be measured by pixels - note that Google Shopping Ads describe image quality as size. “The resolution of your product images determines its quality. Google considers images with more than 1024 pixels as high-resolution images.” 

Apparently Etsy CEO Josh Silverman likes to make “unorthodox, downright risky career decisions” that often involve a ton of responsibility. [Link to podcast in article; I haven’t listened to it]

ECOMMERCE NEWS (minus social media)

General

Patreon’s live chats are now accessible on the web (instead of just the app). A creator can assign moderators, and have chats for different categories of members. 

Canadians: beware that new tax rules requiring digital platform operators to report their users’ income to the Canada Revenue Agency are expected for 2025. These laws would make Canada similar to the United States and the United Kingdom, among others. 

Amazon

Amazon is struggling to verify the VAT status of many UK sellers, and the fact the company holds all funds until the process is complete means many sellers are without income. 

eBay

eBay is offering 3 free “express payouts” to select US sellers by email only, available until June 30th. Money is paid to seller debit cards and can take a half hour or more to receive. (The usual cost is 1.5%.)

If you use eBay For Charity, you may want to check to see if the charity is getting paid, as some apparently are not. 

If you advertise on eBay, or just list inconsistently, you may be interested in the marketing trends calendar for 2024. It shows you when certain types of searches peak. 

Michaels Makerplace

The landing page for Makerplace sellers doesn’t provide a lot of hard details; some of the actual policies appear once you begin to sign up. Here’s how they define handmade: 

Thanks to Bluesky user Brushfeather for the info.

Shopify

Shopify is putting more effort into large businesses these days, despite its core offerings targeting small and medium-sized businesses for years. [soft paywall; Business Insider] The company “...has made a concerted effort over the last 18 months to introduce more software solutions to win over larger merchants. It has enhanced Shopify Plus, a higher-tier subscription with more features, and launched Hydrogen, a more custom framework geared toward retailers with more complex needs...Shopify introduced Commerce Components, an offering that allows merchants to integrate parts of Shopify's software into their existing tech stack. Mattel was its first retail partner for that product, and Everlane has since adopted Shop Pay as a stand-alone component.”

CEO Tobi Lutke recently received almost $200 million CAD in Shopify stock options, “one of the largest compensation packages in Canadian history.” As company founder, he now has around $8 billion worth of Shopify stock.

CIRRO Fulfillment now integrates with Shopify. 

Squarespace

Squarespace is rolling out Squarespace Payments to sellers in the United States, and they expect to add more countries later this year. Fees are in line with other payment processors. 

All Other Marketplaces

Mercari is following Depop and is ending seller transaction fees while adding a buyer fee. There is now a seller earnings withdrawal fee of $2, however, plus the pricing only applies to items listed after the announcement on March 27th, and sellers now have to accept returns for any reason, within 72 hours of receipt.  I suppose this fee might work for buyers if many are also sellers on Mercari or elsewhere, and are buying stock. If you see a good deal you know you can flip with a good margin, you might not mind paying a buyers fee on top of the listing price. The only other way I can see being willing to pay a buyers fee is if you are so enamoured with the platform and its culture that it is worth paying more for. Or maybe I am just out of touch… The Mercari CEO basically calls out Etsy for raising seller fees too much [soft paywall; Modern Retail]: “I’m not going to mention them by name, but you have marketplaces that have a lot of makers, a lot of people that create things, and the fees around selling on those platforms have just been going up a lot very aggressively”. [my emphasis] Mercari wants fees to remain competitive while attracting better inventory. Another article on Mercari’s announcement mentions Etsy by name when discussing seller fees. 

Mercari might want to consult lawyers the next time the site makes changes, though, as many sellers were furious that their existing balances were now subject to withdrawal fees without any warning, leading some to file complaints with the FTC. That led the company to announce that “On March 27, 2024, Mercari announced that it would begin charging a $2 fee(s) (“ACH Charge”) for all ACH direct deposit requests. Effective immediately through April 3, 2024 at 11:59 P.M. Pacific Daylight Time (“Waiver Period”), Mercari will waive the ACH Charge for ACH direct deposit requests made prior to the end of the Waiver Period for all eligible account holders.” Those who already incurred withdrawal charges will get refunds.

And because apparently you can never have enough Mercari news, they’ve introduced a listing importer for eBay and Depop. It uses AI. 

AliExpress will now do livestream shopping events in the UK. 

Payment Processing

PayPal users in the US will soon have only 30 days after delivery to file a significantly not described claim in most cases. Items not delivered by 180 days will still have the full 180 days. 

Shipping 

UPS is planning on closing about 200 facilities in the United States, and hopes to save money by instead using more automated hubs. Having fewer employees and consolidating locations is expected to save the company around $3 billion by the end of 2028. 

FedEx is continuing to combine its Express and Ground pickups and deliveries, both to save money and to make pickups easier on customers. 

#EtsySellerNews #etsy #ecommerce #ebay #microbusiness #cindylouwho2 #mercari

[cindylouwho-2]

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:

LINKEDIN

BLUESKY

REDDIT

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

[cindylouwho-2]

Etsy Moving to Square Photos on Shop Home Pages

Screenshot of my shop home page in July; these photos will change to squares in "early August".

Although Etsy hasn't sent out warning emails or posted notifications on shop manager dashboards yet, the forum Announcements section let us know that Etsy would be changing the ratio of images on shop home pages in early August. (Yes, they are only giving us a few weeks notice. Perfectly reasonable, right? 🙄) The decision was based on the much-maligned tests run in June and July, where many shops saw their product photographs bizarrely zoomed and cropped, with no explanation from Etsy.

Turns out that those tests showed a higher conversion rate for squares, so that is where Etsy is headed. Problem is, we don't know if they are going to properly adjust the crops or not, which they did not do when testing. During that experiment, many of my square photos were zoomed then cropped off on one side, in part because Etsy hadn't removed my previous use of the cropping tool for rectangular shapes. The issues were just as bad or even worse for sellers who mostly used rectangular photos to match the shape of Etsy's gallery displays.

Many sellers are panicking, worrying that they will have to redo thousands of photos in just a few weeks time. Etsy states that "No immediate action is required, however, you may want to start taking and uploading images with this format in mind." Since search pages will still have rectangular product images, squares will not always work (unless set up to look decent in both shapes).

What should sellers do?

I suggest waiting to see what your items look like in this new format before making changes to older images. We don't know whether or not Etsy is going to fix the problems displayed during the experiments. Shooting new listings with both shapes in mind is definitely a good idea, but it is possible your older photographs will look good enough to avoid getting out your camera again.

My best guess is that they will not make the same weird cropping errors with already square photos like mine, as they are not currently doing that on Market pages, where square photos are the norm. See an example below, and compare to the screenshot of my shop home page rectangles above:

Note that my earrings show up fine as a square on the Market page. This listing photo was shown cropped off on each side during the shop home page square test. However, my original photo was taken to look okay as both a square and an Etsy gallery rectangle: a square shape with extra space above and below the earrings. The listing photo in the top right corner above was apparently taken to fill the rectangle shape on each side, so the earrings on the right and left are cut off in square view. This is a problem that many shops may face, depending on how Etsy formats the new home pages.

If you want to check how your current photos look as squares, use this trick to see them on a Market page. (You may need to narrow results by price to find your listing easily.) However, remember that we cannot be certain this is how Etsy will display pics on home pages come August. If we learn more about it, I will update this post.

UPDATE (August 2, 2023): Unfortunately, Etsy went live with the changes today and didn't fix any of the shop home coding, so my photos are weirdly cropped again, and I cannot fix them with Etsy's cropping tool. This shouldn't happen, as my photos are already square!

This is what Etsy has chosen to do with my square photos. Why not just, you know, display the squares I uploaded? Sigh...

If you are taking new photos and want them to work in both formats, you will need to leave space around the outer rim of the image, so you don't lose vital parts of your product when Etsy changes the photo shape. I've been using squares with empty space on the top and bottom of each shot, which is so far working fine on the Market page squares. This may not work for all types of products, however.

If you learn anything from Etsy about this, please post below, or send me an email, so we can share this info with other sellers.

#EtsySellerNews #etsy #ecommerce #etsynews #cindylouwho2 #microbusiness

[cindylouwho-2]

Recent SEO & Marketing News for Ecommerce, November 2023

As promised, here is the separate report on marketing and SEO news for ecommerce businesses, up to the end of November. This is now separate from the ecommerce report (which will be out in the next week or so).

I probably won't be posting SEO and marketing news again until the new year, so this is my chance to remind you that I plan on leaving Twitter soon. You can still keep caught up here on Tumblr, plus daily on Bluesky and on LinkedIn. My plan is to have a new way to follow my news posts in a more timely fashion early in 2024, so stay tuned!

SEO: GOOGLE & OTHER SEARCH ENGINES 

Google launched another core ranking update on August 22, which ended on Sept. 7. eBay, Amazon and Etsy lost a fair amount of page visibility in the UK, according to this analysis. The US version of the same study saw large drops for the same 3 sites, while sites with “user-generated content” did well. Then Google released a Helpful Content update, which finished on September 28. Sites with poor UX (user experience, for example too many pop-up ads) and too much focus on on-page SEO seem to be experiencing the worst effects. Google also gave out tips on what might be considered “unhelpful.” Then, Google rolled out the October Core update, which ended October 19. But wait, there’s more! They also did a November core update, which finished at the end of the month. 

Google has long denied using click data to determine search ranking, but the current antitrust hearings have revealed a different story. We also learned that it cost $26.3 billion in 2021 alone to buy spots as the default search engine in many browsers and devices. Here are more revelations about search ranking from the trial. 

Deleting old content will not necessarily help your Google rankings or traffic. However, if Google is penalizing your pages because it deems them “unhelpful”, removing those less-helpful pages will probably help the site overall. 

Internal links on each important page of your website will generally result in better Google traffic. The study covers 23 million links, but the author notes it only demonstrates correlation, not causation. Different anchor text for the same link is an even better predictor of Google search traffic. Note that Google staff recently stated links aren’t a top-3 ranking factor any more, though. 

Optimizing category/collection/section pages can provide a big SEO boost on an ecommerce website. Here are some tips. 

Google recently started showing follower counts for social media links in search results, but says they are not a ranking factor. 

Large media sites overwhelmingly rank at the top of Google search for common queries in many areas. It’s an interesting read. 

My periodic reminder that “LSI keywords” don’t help your SEO. LSI is an outdated method of data analysis that tries to find connections between words, but it was invented before the internet as we know it existed, and simply isn’t relevant for Google. Yes, related words are good, but LSI is not the way to find them. 

Semi-advanced content: how to figure out your potential buyers’ path to your product through Google data. This is a little more detailed than figuring out which problems people have and how you can solve them, but the basic idea is there. 

In case you missed everything on Google in August, here is a roundup, then you can catch up on September, and finally, October’s changes. 

Not Google

Bing Chat (basically, regular Bing search with Chat GPT involved) is now known as “Copilot”. The name change alone is unlikely to increase traffic, though, which is showing very little gain on Google despite the AI-driven search experience. 

Yahoo’s search redesign is expected to start appearing in early 2024. 

Yandex, the top Russian search engine, is for sale.

SOCIAL MEDIA - All Aspects, By Site

General

Branding is an important part of social media for businesses; here are some good tips on representing your business well and getting seen. As I always remind folks, you don’t need to be on every platform; that can actually be harmful. “It’s unlikely your audience will be active on every single social media platform, especially considering how many are out there in this day and age. Be thoughtful about which platforms you want to leverage for your social media presence. Once you know where your audience is most active, ask yourself whether the platform itself aligns with your brand values, story, identity, and tone of voice.”

Facebook (includes relevant general news from Meta)

European users can soon pay a subscription to opt out of advertising on Facebook and Instagram. 

Facebook uses member information to train its artificial intelligence models, but you can opt some of your data out of that process. Unfortunately, “[t]here’s no guarantee from the company that it’ll delete it, or that it’ll provide you with the information you’re asking for, even if it’s yours.” Also, this only includes the outside data and not your actual posts. 

Meta has new AI-tools for its ads, but not all accounts have access yet, as they continue to test. Ad revenue was up 23% in the third quarter.  

Instagram

Just like many other platforms, Instagram has issues with people advertising illegal things for sale. They are also blocking people posting research on the problem, instead of blocking the illegal ads. 

The basics of Instagram SEO: “The platform says there isn’t one Instagram algorithm. Instead, there’s a personalized set of classifiers and processes for each user.”

LinkedIn

Like most sites, LinkedIn is looking to upgrade some features with AI, but unlike most sites, it is planning on summarizing the feeds of its Premium subscribers so they don’t have to read everything. 

Yes, SEO can help you get found on LinkedIn.

Pinterest

Pinterest is now a bigger shopping destination for Gen Z, who are now the site’s “fastest-growing audience”. 

Reddit

Reddit removed its awards earlier this year, and will be replacing them with gold awards only, and will also pay top creators who earn at least 10 gold a month. 

Reddit may end up blocking Google and Bing from crawling the site, as a way to stop AI training. 

Snapchat

Snapchat ad revenue led to an improved 3rd quarter for Snap, but the company is still losing money. 

Threads

Threads - Meta’s Twitter competitor - continues to get upgrades, with polls and GIFs added recently. Apparently the site has almost 100 million users every month. They are now planning to launch in the EU by the end of the year.

TikTok

TikTok may be considering a ban on links to products for sale on other sites, although the company denied it. This may be to protect their own shopping platform: “Consumers in the U.S. are currently spending around $3 million to $4 million a day on TikTok Shop, up from around half a million to $1 million a day in June, the report says. TikTok staffers expect this number to exceed $10 million by the end of the year.”

That beta test is now live: TikTok Shop is officially in the United States. “As part of the rollout, the company is bringing features such as a dedicated shop tab on the home screen, live video shopping, shoppable ads and affiliate programs for creators…TikTok execs told The New York Times that more than 90% of sellers on TikTok Shop were based out of the U.S.” 

Longer videos may be a TikTok goal, as they are easier to place ads with.

Twitter

Twitter continues to die, losing users since it was sold. Advertisers are leaving completely, and others are not posting content. (Etsy has not posted any promotions on Twitter since November 14.)

Musk keeps stating Twitter may start charging users, and the company is forcing new members in New Zealand and the Philippines to pay $1 a year if they join via the web and want to tweet or retweet, i.e., they can still read without paying. A phone number is also needed for verification of new accounts in these countries. 

Twitter removed headlines from news link cards, but will be bringing them back soon. 

Tumblr

Tumblr will be rolling back some changes and focussing on “the core functionality” of the site, after many new features failed to gain traction. 

YouTube

Look for new AI video tools on YouTube in the near future; the new “Create” app is currently in beta for Android. 

If you produce Shorts for YouTube, you will want to know how that algorithm works. 

(CONTENT) MARKETING (includes blogging, emails, and strategies) 

Gmail, Yahoo and AOL are all implementing new email rules in 2024 that may impact some types of email newsletters, although most major companies have already complied with the new requirements. 

While Gmail hides your promotional emails, Yahoo is now offering new AI tools that will find those missing “gift cards, discount codes and store credits that people may have forgotten about.”

Newsletter option TinyLetter is being shut down by Malichimp. 

Substack users: be aware that your subscribers may see your address and phone number unless you change the default setting. 

The first step in writing content isn’t necessarily doing SEO keyword research [I’d argue that products are different than content, though, and that even forum or social driven content could benefit from a bit of SEO.] 

Looking for content marketing topics for December? Here are 5 ideas to get working on, and if you have some free time, get a head start on January.

ONLINE ADVERTISING (EXCEPT INDIVIDUAL SOCIAL MEDIA AND ECOMMERCE SITES) 

Did you know there are tools to track ads from different companies on many ad sites? Some are even free. [includes TikTok, Meta, Google and LinkedIn]

Ecommerce advertisers may find Amazon a better place to spend their budget compared to Google Ads. “Amazon’s search volume comprises 54% of all product-related searches in the United States.”

Google’s third quarter was decent, but Cloud revenue was below projections while ad money was up. Microsoft’s ad revenue also improved. 

Chrome plans on ending all third-party cookies by the end of the third quarter 2024, and will start with 1% of users in early 2024. This will affect some types of ads, if you are wondering why platforms start changing. 

Anyone using Google’s Performance Max campaigns may be interested in this overview of how to get the most out of them, with screenshots. 

STATS, DATA, TRACKING 

Since a lot of people still can’t figure out Google Analytics 4, here is yet another good overview. 

This new YouTube video from Google shows you how to figure out traffic sources in Google Analytics 4. 

Still working on moving to GA4? Here’s a bit more info, including how to save your old UA data. 

For video learners, here is “5 reasons for using Google Search Console”. [YouTube, 3 mins.]

BUSINESS & CONSUMER TRENDS, STATS & REPORTS; SOCIOLOGY & PSYCHOLOGY, CUSTOMER SERVICE 

A report out of the UK on small business use of online platforms calls for the UK government to better protect small businesses from the power differential often evident in these relationships. 

Amazon’s Prime Day sales barely beat last year, while their competitors actually dropped. [Washington Post gift link] Some analysts think this bodes poorly for the holiday season, and that consumers are looking for discounts.

Around 50% of Generation Zers in the US plan to shop in malls this holiday season, and people in general plan on spending less this year. But another study said nearly half of Gen Z shoppers will make at least some purchases on social media, while the US average is just ⅓. Most online holiday shopping will take place on mobile instead of computers, and ecommerce shopping will be up less than 5% per some reports, and over 10% according to others. Black Friday stats also indicate that mobile outpaced desktop - smart phones delivered 54% of online sales. “Global data from Shopify also showed strong mobile performance for merchants on that platform. Mobile versus desktop 76% to 24%, respectively.”

Large companies report that various types of consumer fraud are on the increase, and cost $100 billion annually. 

IMAGES, VIDEO, GRAPHIC DESIGN, & FREE ONLINE TOOLS

Thinking of using AI to create some products and images to sell? Be aware that AI art is not copyright-protected, at least in the US at the moment. A recent case led the court to rule that “human authorship is a bedrock requirement of copyright.” [article includes a copy of the entire case]

Need some free web design tools? Practical Ecommerce has a recent list of 19, and an even more recent list of 17. 

MISCELLANEOUS (including humour) 

A snarky article in the Verge had SEOs all worked up, and some were very defensive about it. I thought the whole thing was hilarious. 

Reminder that there are usually consequences for (and laws against) improper use of a customer’s private information, which includes asking them on a date. “Almost one in three people aged 18-34 have received unwanted romantic contact after giving their personal information to a business, a UK poll has shown.”

Do you know what happens to your website and social media accounts when you die? Sometimes, even the platforms get confused about this, and there are few laws. 

Jewellery finding company TierraCast is closing by the end of 2023. 

UPDATED: December 4, 2023

#seo #social media #microbusiness #cindylouwho2 #search engine optimization #marketing #content marketing

[cindylouwho-2]

Etsy Third Quarter Earnings 2023 - It's the Economy, Not Upper Management's Fault (Apparently)

Slide 12 from Etsy's 3rd Q earnings call, © Etsy; they are definitely going all out to let US buyers know about the Purchase Protection changes.

Etsy's third quarter 2023 didn't show any real sales growth, and upper management is projecting an even weaker holiday season. However, economic issues and geopolitical instability bore the brunt of the blame, along with ecommerce competition that is spending too much money on ads (compared to Etsy, of course). The top brass doesn't think it has made any big mistakes, and surprisingly, didn't announce any new ideas to get things moving again, largely repeating what's been said for the past year or more.

That doesn't mean we didn't learn anything new, though, so let's dive into the aspects that will most interest sellers. In portions where I am reporting on what was said or posted, I will put my personal commentary in square brackets to separate it out.

First, here are the resources that you should read/watch yourself, if you want to know more:

the press release

transcript of the conference call

slides from the conference call

video of the call (click on “Webcast” under “Latest Quarterly Results”)

my summaries of the third quarter 2022, and the second quarter 2023 for comparison

Second, the basic numbers (covering July to September 2023, compared to the same period in 2022):

Sales on Etsy were $2.7 billion, up 1% 

Total sales for all 4 marketplaces (Etsy, Reverb, Depop, Elo7) were $3.0 billion, up 1.2%. [Elo7 was officially sold in mid August, meaning it was only included for half of the quarter]

Etsy’s revenue (including all 4 sites) was $636.3 million, up 7%

Seller service revenue was up 16.2% to $175.4 million, while marketplace revenue was up 3.9% to $460.9 million

Net Income was $87.9 million, up almost $1 billion due to the loss taken on Depop in the third quarter of 2022

Active buyers on Etsy alone stand at 91.6 million, a second consecutive all-time high

Active sellers on Etsy alone are 6.7 million, the third large jump in a row compared to the previous quarter; numbers had been stagnant through the end of 2021 and all of 2022 [Note that “active” means one charge or transaction in the past 12 months; many “active” shops currently have nothing for sale.]

Sales where the buyer and/or the seller was not in the United States were 47%, up from 43% last year, but most Etsy buyers are still in the US

Sales on mobile are now at 68%, up from 67% last year [this includes both the buyer app and mobile browsers]

The Economy, Pricing & the Consumer Appetite for Discounts

As you may have heard, the economy is not great, especially for lower-income households, and that affects certain products more than others. CEO Josh Silverman actually stated "the volatile macro climate is going to make it challenging for us to grow this quarter." Strikingly, both VP of Investor Relations Deb Wasser and CFO Rachel Glaser urged people to buy their holiday gifts on Etsy [which hit me as a bit desperate during an earnings call!]

However, households in US areas that average above $100,000 in yearly income are actually spending more on Etsy, and the top 10% of US households (by income) spent 20% more on Etsy this quarter than last year. Glaser pointed to this as evidence Etsy was doing fine, all things considered, and a better economy would once again lead to more growth. [That's a fair take based on that evidence; Etsy certainly is doing better than some other ecommerce marketplaces right now.] Is there an overarching plan if the economy doesn't improve? Investors weren't let in on any such plans during this call.

Despite all of this, sales were actually up a bit each month of the third quarter, while dropping in October. Glaser stated this matched US ecommerce trends. Non-US countries were up 7% this quarter, including the UK, Germany and France, continuing the trend of bigger international growth.

"In this economy, we are seeing that mass merchants who sell essentials and whose brands stand for low prices and deep discounts are generally gaining e-commerce share broadly at the expense of most others." Hence, as I pointed out last quarter, Etsy is leaning into discounting and stressing affordability to try to drive sales. This includes at least 3 approaches:

offering discounts paid by Etsy, such as the "GET5" coupon and the $10 off of $40 orders promotion. The former drove orders and paid for itself; the latter did not. They will continue to test these types of offers.

promoting sales that sellers already run, such as through links on the home page and through emails. [This would seem to include the lengthy holiday sale that Etsy is pushing, with at least 25% off.]

giving sellers more data on pricing, including when and how to put items on sale. They touted the [mostly useless] pricing tool as part of this plan, since "our sellers don't have pricing departments, giving them insights into things like how best to price each item and how or when to use promotions. So we need to be the ones to provide those insights and be their advocates."

They also talked a lot about the fact regular Etsy prices can be affordable. [It may be difficult to convincingly present that position to prospective buyers. Spinning shopping on Etsy as buying direct from the maker with no "middlemen" is a bit rich, considering Etsy is the middleman, taking an ever-larger cut in the past few years, through fee increases, Offsite Ads charges we didn't have to pay before 2020, and ever-increasing margins on Etsy Ads.]

In short, consumers are very price conscious right now, and Etsy is aiming to provide them with what they want.

Search - Branching The Biggest and Most Generic Queries

As they have been discussing for a few years now, one of Etsy's biggest goals for search is to better narrow down large searches, which currently produce an overwhelming number of results [a fact not helped by the continuing growth in seller numbers and Etsy adding items to results that don't have the search terms anywhere.]

They are now happy with the relevance of large searches - "[w]e've made a ton of progress on relevance" - [even though smaller searches can be quite poor, as I discussed last quarter], so they aren't going to focus on that as much going forward. Instead, they are finally testing better ways to offer multiple branches from large searches, or "open-ended head query items" [head searches are the opposite of long tail searches, so this is only being done in a small percentage of the total unique queries overall].

Here is the example given in the call, from a test ran recently:

Slide 6 from Etsy's 3rd Q earnings call, © Etsy; shows a test on breaking down a generic search into more specific ones.

This version had multiple rows of top items in specific narrower searches, before the full search results appeared further down the page, which led to a lot of scrolling. However, I am not seeing that version of the test any more when I check. I am seeing this one instead:

Search for "tree" on Etsy, November 3, 2023.

Note that the normal search results are much higher up the page with this one, plus you can see the 4 different options to narrow the results down without having to scroll. While the 4 sub-topics look like they might be categories, clicking on them simply leads to a search using all of the terms, i.e., a search for "tree home decor" instead of a search for "tree" filtered to the Home Decor category.

Note that Etsy plans that these options will ideally include personalization and contextualization, and are also likely to feature more "quality" items [which so far seems to mean items that have the Etsy's Pick badge in other areas, even though that hasn't happened in this type of test, or at least not that I have seen up until now].

Other changes in search mentioned include "utilizing ML [machine learning] models designed to determine the visual appeal of items and incorporating that information into our search algorithms." [It's hard to say how far they have gotten in testing that versus using it across the site; often these types of musings during calls turn out to be works in progress instead of live algorithm factors. I am trying to formulate a few tests on this, though, so stay tuned!]

Enforcing Etsy Policies To Entice More Shoppers

Etsy is finally aware of the negative image it has in some circles, and is making a big deal out of how it is now enforcing the rules and removing more handmade violations. "Handmade policy takedowns are up over 120% for the third quarter" sounds great [but they didn't mention that the overwhelming majority of their takedowns - roughly 95% - are wrong, and that innocent sellers' businesses are damaged when this happens.]

Because the job of cleaning up handmade violations is so overwhelming to program bots for, they are now approaching it by trying to deactivate the most visible items first, and claim that "we've nearly cut in half the percentage of visits where a buyer comes across a violating listing." [This explains the glut of long-time sellers complaining that their best sellers have been deactivated for handmade violations. Etsy is going for the items with good quality scores first, and as I have noted, they do a poor job of distinguishing real violations from legitimate listings. Aiming to remove non-handmade items from the biggest searches etc. first is a good idea, but you would need competent programing and quick human review to do this fairly and effectively, and Etsy has neither. By the way, despite promising in late September to review all handmade bot flags within 48 hours or reinstate them, and to deindex listings from search rather than deactivate them entirely, they are still not doing that.]

One of the investment group reps said they had seen an improvement in enforcement, and asked how much it was affecting sales. Silverman replied "I'm also proud to say that we are seeing no deleterious effect to GMS from that. People don't come to Etsy wanting mass-produced product, and we're finding that as we do even more to suppress those listings on the site, the site experience only gets better." [In other news, I am not at all proud to say that the packaged snack seller who is violating Etsy's gift basket policy by selling mass-produced foods in cardboard boxes is still on Etsy, and is now a Star Seller, despite me reporting them twice in 2 1/2 years. Since the corporation isn't removing this stuff - which sells well - I am not surprised that the gross marketplace sales have not been affected yet.]

Purchase Protection and On-Time Delivery Guarantees

As shown at the top of this post, Etsy's recent changes to the Purchase Protection Plan - officially stating that eligible orders arriving after the last estimated delivery date will be fully refunded after a case is opened - are a key part of the holiday marketing plan in the United States only, even though the policy applies worldwide.

Slide 9 notes that over 98% of orders were delivered on time in the US last holiday season [but of course sellers could enter their own custom delivery windows then, which is no longer possible in the US or the UK]. The slide did not note if that included items where tracking doesn't always get updated on Etsy, such as envelopes with Pitney-Bowes labels, or services Etsy doesn't program the tracking for. Were those part of the late items, or were they not included at all? We just do not know.

[Remember, if your order qualifies for seller protection, Etsy is the one who pays the refund, not you. They've been doing this for over a year now. Of course, some countries and classes of items are less likely to quality for seller protection, largely due to shipping and tracking differences. Review how seller protection works if you are concerned.]

Advertising

One of the most interesting parts of the call was both Silverman and Glaser blaming Temu and Shein for running massive ad campaigns that were not sustainable if they wanted to be profitable. They explicitly stated Etsy may reduce the spending on Offsite Ads if the other companies are driving bids up higher than they are worth, and also said they are increasing paid social media as one way to compensate. [So if you rely on sales from Offsite Ads, watch those number in the next few months.]

Overall, Etsy spent more on marketing/advertising this quarter than the previous year, up 9% to $161 million. As part of that, new commercials will come out in the UK and the US for the holidays, while Etsy tried TV commercials in Austria and Switzerland during the quarter.

"Etsy Ads was the primary driver of [services revenue] strength as we optimized our XWalk functionality to better value potential listing conversion and pricing into our ad ranking system." [Since I don't use Etsy Ads any more, I can't test this at all. They've previously said they incorporated listing prices into the search algorithm, but my testing demonstrated little effect. This is something I will test in search again.]

Miscellaneous

Etsy alone has added nearly 1 million sellers over 3 quarters after that number being relatively flat for a year, and Silverman says they've done nothing to go after those new folks. More people selling on Etsy was attributed to economic factors [but I suspect AI availability is also involved, as the tutorials for setting up an AI-generated shop on Etsy are all over the web now. Note this increase means that while gross marketplace sales have been roughly flat this year, the average amount per seller has dropped.]

Etsy spent around $1 million covering the October bills of sellers affected by war in Israel and Gaza.

Depop had an excellent quarter; "GMS and revenue both grew double digits on a year-over-year basis with growth in active buyers sparked by strong new buyer growth in the U.S." Reverb was down a bit, but kept ahead of other musical instrument businesses.

Silverman has mentioned that Etsy isn't the first place many people think to shop for certain types of items over several different calls now. For example, "Only 12% of buyers will name Etsy top of mind as the place to shop for gifts." They don't seem to have any updated numbers showing how they've been improving that situation. [It's time to go after that "enormous opportunity", Josh!]

I wish I could report there is a light at the end of the tunnel, but just waiting for the economy to improve is probably not the best way to increase sales. Yes, economic factors are a big part of Etsy's sales stagnation, and Etsy is doing better than many of its competitors, but they are going to have to present some new plans soon if they expect to keep investors happy.

Don't be surprised if there are major site changes in 2024, because this can't continue.

#ecommerce #EtsySellerNews #etsy #microbusiness #cindylouwho2

[cindylouwho-2]

Etsy's Removal of the "Other" Shipping Option - What Sellers Need to Know

Late in September, Etsy removed the "Other" option from the US and UK shipping carrier lists that sellers choose from when setting up shipping options. They also initially removed it from all print-on-demand (POD) items made in those two countries, although Etsy staff later claimed that was an error.

This is problematic for both shop owners who ship using services Etsy does not recognize in their pre-set lists, and those who find the carriers' estimated times to be too short. Many types of packages are more easily and cheaply sent through carriers Etsy doesn't have an option for, including furniture items. Sellers in many countries have relied on "Other" to protect them from angry shoppers who expect instant delivery, even overseas. This is even more important now that Etsy has updated its legal policies to confirm that packages arriving after the expected delivery date are eligible for full refunds under the Purchase Protection Program.

Right now, listings can be sold and relisted without updating the shipping profile information, but sellers in the UK and the US cannot edit old listings or create new ones using the "Other" option. We should expect that the existing "Other" listings will eventually be deactivated if not updated to Etsy's new requirements.

Since Etsy started first doing this in May, and since the corporation has increasingly pressured sellers to ship with tracking Etsy recognizes for a few years now, this change is unlikely to be reversed; at best, it might be delayed. I strongly suggest pressuring Etsy to offer more options in their pre-set list, and to make those delivery time frames more accurate.

However, the good news is that Etsy is correct about something: the fact that the companies and times on the pre-set options sellers are now forced to use are not visible to buyers at any point, and Etsy often relies on modified delivery estimates instead of the ones shown, as confirmed in the screenshot above. That means some sellers can follow Etsy's suggestion of choosing the closest available option to replace "Other"; the delivery estimates shown to customers will frequently be longer than those shown in the pre-sets. You can change 1 listing and then try shopping as a guest incognito to see what times are shown to buyers in different areas to confirm this. Etsy will later update the expected delivery date if necessary once it has valid tracking it can read, even if that tracking is not one of the options sellers could choose initially.

Is this an acceptable solution? No, not at all. The times will still be off for some sellers, occasionally by quite a lot - my inbox is full of examples. There is no reason Etsy could not update its list of pre-set shipping options for listings to include more of them, with more accurate delivery time frames. Heck, they apparently do not even include some of the specific services that are available as Etsy Labels! But updating the company's software costs money; it's cheaper to foist all of the work and a lot of the risk onto the sellers.

If you aren't in the US or the UK, be aware this will likely spread to other countries soon enough, so keep an eye out for problems with your listings, and make a plan now.

#EtsySellerNews #etsy #ecommerce #microbusiness #cindylouwho2 #marketplace

[cindylouwho-2]

Etsy Updates Case and Purchase Protection Policies, Just a Little Bit

I've highlighted the major change above.

While some Etsy shop owners have already been held to these standards in the past, everyone selling on Etsy should be aware that the corporation has finally edited and clarified both its Cases Policy and the Purchase Protection Program for Sellers Policy as of today (September 13, 2023). These changes were unannounced; thank you to JMOldeVintage for pointing out the update.

In short, buyers will be eligible for a full refund if their order "arrived after the estimated delivery date window". The previous "[i]tems that are received after the agreed-upon delivery date due to shipping delays" exception to case eligibility has been removed.

This applies whether you or Etsy set that delivery date estimate. While Etsy sometimes adjusts the site's official delivery estimates, it is often well behind known delays, and usually does not accommodate for events such as weather and other natural disasters (unless they are widespread and in the US, of course).

We've known for a while now that Etsy was already refunding "late" packages in some cases; I commented on how those buyer refunds violated Etsy's own eligibility policy in my blog post on Etsy's Seller Protection Program. Sellers have also argued about the definition of "estimate" in the Etsy Forum regarding this point. Today's updates seem designed to correct the legal policies for this previous anomaly.

Of course, this change is not a serious problem for the average seller so long as the order qualifies for seller protection. In those situations, Etsy will refund the buyer out of Etsy's own money. The seller will keep the money they originally received.

However, this means this official change will again put many sellers outside of the United States in a tough spot, since our orders are, on average, less likely to comply with the official Seller Protection requirements. Most countries do not have Etsy Labels available, and some of those also don't have tracking available that Etsy can recognize. Those with access to Etsy Labels often find that the services they use aren't offered through Etsy (for example, Canada Post oversized lettermail, and many popular services from Royal Mail in the UK).

And of course, do not forget that all orders over $250 USD (including shipping fees) are also ineligible for seller protection. Shop owners should not expect Etsy to make many (if any) exceptions to this rule now that the program has been in place for over a year.

Should be a fun holiday season! 🙄

UPDATE (Nov. 9, 2023):

Etsy has again revised the Cases legal policy as of October 31, 2023, adding the following to part 2 A:

"Items that arrive late due to forces outside the seller’s reasonable control, such as a carrier strike, natural disaster, war, civil unrest or similar force majeure event, as determined by Etsy in its sole discretion, do not qualify for Etsy’s Purchase Protection Program."

Guess they realized their new "refund if it arrives late" plan was a bit too broad.

#EtsySellerNews #etsy #ecommerce #cindylouwho2 #marketplace #microbusiness

[cindylouwho-2]

Etsy Second Quarter 2023 Earnings Report - Get Ready For More Pressure To Discount

Above - Slide 9 from Etsy's Second Quarter 2023 report. © Etsy

Etsy's second quarter 2023 results beat projections, but the outlook for the third quarter was weak, and that has led to a sharp drop off of the stock. No doubt investors were unimpressed that Etsy has no convincing plans to begin increasing sales and profits again. The call announced nothing truly new in that vein.

First, the resources for this post:

the press release

transcript of the conference call

slides from the conference call

video of the call (click on “Webcast” under "Latest Quarterly Results")

my summaries of the second quarter 2022, and the first quarter 2023 for comparison

The basic numbers (covering April to June 2023, compared to the same period in 2022):

Sales on Etsy were $2.6 billion, down 0.7% 

Total sales for all 4 marketplaces (Etsy, Reverb, Depop, Elo7) were $3.0 billion, down 0.6% 

Etsy’s revenue (including all 4 sites) was $628.9 million, up 7.5%

Seller service revenue was up a whopping 20.8% to $175.9 million, while marketplace revenue was up 3.1% to $453 million

Net Income was $61.9 million, down 15.3% (in part due to the impairment charge from the impending sale of Elo7)

Active buyers on Etsy alone stand at 90.6 million, an all-time high

Active sellers on Etsy alone are 6.3 million, the second large jump in a row compared to the previous quarter; numbers had been stagnant through the end of 2021 and all of 2022 [Note that “active” means one charge or transaction in the past 12 months; many “active” shops currently have nothing for sale.]

Sales where the buyer and/or the seller was not in the United States were 47%, up from 44% last year, but most Etsy buyers are still in the US

Sales on mobile are now at 68%, up from 66% last year [this includes both the buyer app and mobile browsers]

I'll cover the points of the biggest interest to sellers below, with my comments in square brackets.

Advertising (On and Off Site)

Etsy Ads (the onsite ones) again helped increase the services income. CFO Rachel Glaser mentioned that "XWalk, our real time retrieval engine" was now a part of the Ads algorithm. [It was previously introduced in search results, to help draw connections between multiple sets of data rapidly as someone is searching.] They are now able to show ads in more places, increasing site profit.

Offsite Ads (aka performance marketing) cost roughly the same in the quarter, due to testing which led to Etsy reducing money spent on some platforms.

From the press release: "We expanded performance marketing investments from 13 to 20 non-core countries, now including the Czech Republic, Greece, Hungary, Poland, Portugal, Romania, and Slovakia."

Etsy Search

CEO Josh Silverman feels Etsy has made progress in search relevancy (Slide 6). Therefore, the next step is to "better identify the quality of each listing, so that from this relevant result set, we bring the very best of Etsy to the top. Our data shows that high quality listings attract a higher value buyer than our average listings, attract more repeat and habitual buyers, and most importantly, they often convert over 2 times better than other listings." No actual definition of "high quality listings" is provided. [This may be a refinement of the listing quality score.]

Etsy is training its machine learning software on "...a best of Etsy library, which is curated by expert merchandisers based on the visual appeal, uniqueness, and apparent craftsmanship of an item." (Slide 7) The models are then expected to find the best items out of large search results, and return those for searchers. [I hope these aren't the same human curators who supposedly selected the "Etsy's Pick" listings, as my only Etsy's Pick listing is a commercial pendant on my hand-cut chain. Totally Etsy-legal, and even appealing and well-made, but hardly unique - there are hundreds or maybe even thousands of these pendants on Etsy right now. (In my defense, there were a lot fewer when I started selling them.) Only my chain falls close to the realm of unique, due to the clasp.]

Etsy is also working on "collapsing" similar items on the first few search pages into sets, and offering shoppers several different sets to choose from, "showing you just the very best of each of a set of very different items". [I believe I have seen a test like this, where several rows of slightly different search results are shown for some queries. It could also mean an expansion of the "more like this" link under individual listings on the search page.]

[It appears to be time to accept that Etsy is not interested in being a site for niche searches any more; management only cares about the large searches converting. I understand what the engineers were trying to do with training the systems by adding more items in and letting the customers signal which results were good, but small and niche searches have only gotten worse over the past 3-4 years, and they've now effectively told us we can't expect any more improvement in this area. Search effort is now going to winnowing down large searches, not improving very small ones.]

Upcoming Promotional Plans & Focus

As usual, Etsy is focussed on retaining existing buyers as well as adding new ones. Hitting an all-time high in active buyers this quarter shows some progress in this area.

Given that "[t]here's no question this is a very promotional environment," we should expect to see more features around sales and discounts, as shown in Slide 9 at the top of this post. Those 3 boxes are part of a scrolling banner at the top of the Etsy home page in the US right now. [If you have tried to run a sale lately, you have already noticed that the lowest percentage off sale is 25%. You can enter a custom amount, but 25% is the default if you don't click for more options.]

They are already testing "a new price discovery functionality utilizing buyer demand data to help sellers think about how to price their items and when or how they might best use promotions as part of their mix." An example is shown in the top right corner of Slide 11 - see below:

[If this works as badly as the old tool from years ago - the one that compared hammered sterling silver pendants to plastic ones - then it will be a waste of time. And don't forget the tool that tells us our shipping for large heavy items is overpriced because it is comparing the listing to the shipping rates of the smallest items in the same category. The list goes on... However, many sellers would appreciate knowing more about what similar items are actually selling for, and it is possible Etsy heard that request, so we shouldn't write this test off before we see it.]

The new wedding registry has been doing well, with 14% of sales coming from first-time buyers. Etsy is opening a baby registry in August, and more categories may follow.

Silverman said that the Purchase Protection Program (PPP) "...reduced the issue resolution time for cases by approximately 85%". [I guess when there are rarely humans involved in adjudicating cases, that does tend to save time.] The site will soon mention this in even more places, to increase buyer confidence and bring them back more often.

Also on the way: "Buyers will see some new AI assisted ways to find crafted quality gifts for the loved ones at great value with even more confidence that these gifts will arrive on time." Gifting will continue to be a promotional focus.

Payment Reserves

Following the recent media attention to payment reserves, one analyst asked what the policy was meant to do in terms of benefiting the marketplace, and how the company is addressing the complaints. Silverman fell back on the "sellers not able to fill a rush of sales" example [even though that hasn't been the main reason for most of the recent reserves], and mentioned the previous day's announcement that reserves would be changing.

Depop, Reverb, and the Exit of Elo7

Etsy is selling Elo7, and is apparently taking a loss on it.

Depop's sales and revenue grew this quarter (year over year); new ideas and developments are detailed on Slide 16.

Reverb is still doing better than the general musical instrument market; details on Slide 17.

Miscellaneous

sales were down this quarter due to the month of April; May and June were both up, as was July [so the third quarter is up so far, but they noted the company traditionally has lower sales in August and September]. Silverman stated that the economy is in a down cycle, but that cycles change.

sales are declining in United States zip codes where the average household income is below $100,000 a year, and are growing in the zips above $100K a year.

the increase in marketplace revenue was partially due to having more non-US transactions, which usually have higher payment processing fees charged.

"advances in ML capabilities have enabled our enforcement models to detect an increasing number of policy violations." Slide 10 states they've "...removed 29% more listings for violating our Handmade Policy in 1H 2023 vs. 2H 2022". It's not clear if this includes all the ones they removed in error and later had to reinstate. [It's not just handmade takedowns that were mostly wrong. They caught my 2 "drug paraphernalia" listings earlier this year, as well as many top selling item from big shops, for no reason. As I explained in my coverage of the annual transparency report, only 5% of items Etsy reviews for violations actually need to be removed from the site. Increasing takedowns is a bad thing when they are almost all wrong, and especially when real and easy-to-find violations - such as boxes of commercial potato chip packages and actual roach clips - remain up. This initiative continues to get an F.]

almost 20% of vintage shops are choosing to use the new "Make an Offer" option.

Why Etsy Needs To Do More To Impress Investors

If you watch or read these calls every quarter, or even just read my summaries, you will note that there was very little new here, and certainly not much new that one would expect to substantially increase sales across the site. I think the upper brass recognized that, as the "challenging" times were stressed repeatedly, and they are still occasionally comparing numbers to the pre-pandemic stats.

Yes, it is great that Etsy has basically retained all of its pandemic growth; many other platforms - such as Wayfair and eBay - did not. However, analysts seem to be over that now, and are looking to future growth. Etsy's response seems to be that any substantial increase in marketplace sales will have to wait until the current uncertain world economic cycle improves. While they talk about incremental increases in sales expected from some current projects, their own projections for the third quarter aren't reflecting that growth, given Etsy now has more active buyers and sellers than ever before.

Have they possibly lost too many successful shops due to overreaching with payment reserves? Are buyers expressing concerns on that topic? Now that many more sellers can opt out of Offsite Ads, is that dragging down the company's income at all? Are they truly out of new ideas? These are questions that the analysts and the media need to be asking.

Perhaps Etsy is planning on another release that will lift marketplace sales, but right now they are keeping it secret. The company probably can't afford to wait on this much longer, though, if it cares about the stock price.

#EtsySellerNews #etsy #ecommerce #microbusiness #cindylouwho2 #marketplace