#EtsySellerNews

[cindylouwho-2]

Please share this everywhere, including other social media and forums - people need to know that Etsy is damaging small businesses by removing their legitimate handmade items with no way to appeal in most cases.

[cindylouwho-2]

Etsy's Search Visibility Page Announcement and Upcoming Changes

Last week, Etsy rolled out the new "Search Visibility Page", and announced that starting October 1, US search will give benefits to US items shipping for under $6.

You can read my thoughts here:

[cindylouwho-2]

Etsy's Adult Content Ban: Some Things You Might Have Missed, & Some Reasons Almost Everyone Has Missed

As almost everyone knows, Etsy announced a wide-ranging ban of many types of sex-related items on June 27, to take effect on July 29, 2024.

While the corporation was predictably vague about the reasons for this change, it's not overly-difficult to figure out why this happened, although at least one reason seems to have slipped by many. It's slightly more trying to make the logic work when we consider what they still allow. It may be more interesting (and vital, for some sellers) to consider what Etsy might ban next, or ban by accident when this policy takes effect.

While this post isn't intended to be a deep dive into all of the revisions to Etsy's official policies, I will briefly go through certain highlights of the new rules, followed a few alternative ideas for both sellers and shoppers. I'll then discuss why Etsy did this, and we should expect in the coming weeks, months and years.

First. here are the relevant materials:

the much-quoted announcement

Etsy's new Adult Nudity and Sexual Content Policy

the revised Mature Content Policy

as well as some of the media coverage:

Mashable was the first large outlet to publish

The New York Times (soft paywall)

The Guardian

The BBC

Modern Retail (soft paywall)

What's Out, And What's Still OK to Sell or Display

As has widely been reported, Etsy will no longer allow sex toys that touch genitals or enter the body, a female product model's nipples in photos, photos or "photo-realistic" images of sexual acts, types of nudity with "sexual context", fetish items such as used underwear and foot pics, and "sexual language referencing familial relationships". (Pornography was already banned before now.)

Plenty of other items are still permitted, though, including:

BDSM accessories

body harnesses

kegel weights

sex furniture

non-photorealistic nudity and "sex acts without visible genitalia or anuses"

female nipples in photos if the photo is the product and the first listing image obscures them

These exceptions lead to all kinds of questions. For example:

Etsy likes to position itself as LGBTQ2S+ positive. That means a topless photo of a trans male with visible nipples is ok even if they never had top surgery, right? Especially if they have legally transitioned and have government-issued ID that lists them as male, correct?

Where is the "non-photorealistic" line drawn? If a painter attempts to be photorealistic, but is not very skilled at the process, is that painting ok to sell on Etsy?

I am sure you can think of plenty more. But holes in the policies are not my main concern in this article, so I will move on (after noting that Etsy is going to have some enforcement messes with the policies as written).

Where Should Sellers and Shoppers Go After July 29?

(Mention in this section is not an endorsement of the platform. Please carefully research any option before signing up. Some links are not "safe for work".)

Etsy gave business owners just one month's warning that they were no longer wanted on the site. Many are still scrambling to replace their steady income that their Etsy shop provided. The alternatives are not always simple, and it does depend on what a shop sold.

There are a few small marketplaces for adult items, including https://spicerack.market/ and https://charmskoolshop.com/ (links not safe for work). These are not going to have the level of traffic Etsy had, but that also might improve now that many businesses and shoppers are looking for new venues.

There are also larger marketplaces that do allow many of the products Etsy banned, but each has its own restrictions and exceptions, making it risky to copy existing Etsy listings over directly. Always carefully research the rules everywhere. Amazon does have a sexual wellness category, but it is not part of Amazon's Handmade section. eBay also has sex toys. The Artisans Cooperative currently has some adult items listed, but the site is still in beta, so only coop members can sell there at the moment.

Freestanding websites and self-promotion are another approach, but this can be daunting for makers who chose Etsy for its built-in traffic, plus some platforms and payment processors do have rules against certain types of adult content. Shopify's Shop app bans pornography and "sexually gratifying" fetishes, and the bot filters can sometimes block allowed content by mistake.

If you have a favourite seller, they have likely already posted where they plan on going next; if not, ask them.

Why Did Etsy Ban Many Adult Listings, and Why Now?

The various media articles lay out numerous possible reasons for the new sex policies. They include:

Some jurisdictions have laws that limit what children or under-18s can see online, which is likely why Etsy's short announcement uses the word "safe" in 3 different places.

Some social media sites restrict adult content - "evolving industry standards", perhaps?

Some payment processors restrict what adult items can be sold.

We're forced to speculate, because Etsy has refused to answer questions or release additional statements since June 27. That's problematic when talking about destroying livelihoods, because none of these reasons seem to dictate an absolute ban.

As mentioned above, many sites still allow most of the prohibited products, either openly, with age minimums, or with siloed categories that don't appear in generic searches. A big tech company should easily be able to program for this. There's been no indication that any of Etsy's payment processors have withdrawn due to this content, either. So that list simply doesn't add up.

Instead, it's clear that the core explanation is that Etsy wants a bigger slice of the ecommerce pie, and is willing to reject long-standing sellers and product lines to better appeal to shoppers who find sex and related topics distasteful. But again, why not just separate the categories better, as Amazon and eBay do? Amazon is certainly not lacking for customers despite having a sexual wellness category where many things Etsy disallowed still happily reside.

This all boils down to a key reason few are discussing: Etsy's faulty algorithms don't seem capable of keeping such merchandise out of sight of really picky shoppers. They've in fact been trying to do that for a few years now, as the 2022 Transparency report detailed. Etsy stated that the “mature content classifier” led to "a 17% decrease in flags of mature content from our member community". Let's be honest - 17% isn't a great reduction. Even worse, that classifier led to shadow banning such innocuous items as dog diapers and "nude" coloured leggings, while endlessly missing actual porn, including deep-fake AI celebrity images [Forbes; soft paywall].

CEO Josh Silverman has made it clear that Etsy isn't going to focus on improving search relevancy any more, and will instead be focussing on product quality and shops' customer service records to determine search ranking. Problem is, niche searches still display tons of irrelevant items - go check; I'll wait - and this is frequently where one might see things they weren't looking for. If the search and other algorithms aren't able to give shoppers accurate results even when Etsy is attempting to filter out mature items, then Etsy's alternative is to ban the items outright.

Let's face it: if the real problem was female nipples being seen by kids, they'd all have to be blurred out, instead of just the first image. The first image is what shows up in search, ads, and recommendations across the site, so that is what Etsy is censoring. Kids are welcome to look at butt cracks to their hearts' content, as long as they click on the listing first. The real problem is instead that Etsy can't deliver accurate searches and tailored recommendations that people want to see, and regularly serves up things shoppers were not expecting.

But why now? Other than the recent promises to change the search focus from relevancy to quality, what made Etsy drop this notice on unsuspecting sellers on June 27?

The answer appears to be Etsy's new creativity standards, released on July 9. Those standards codify previously unofficial exceptions to Etsy policy, such as allowing 100% commercial goods to be sold in gift boxes. They are also the first official mention of Etsy permitting AI art to be sold on the site, although Silverman had already announced that unofficially.

The policy changes are likely to increase the number of listings on the site that are not handmade, vintage or craft supplies, and Etsy obviously felt the need to stem the eventual tide of sexual gift boxes of dildos from AliExpress - yes, there are already some listed on Etsy - and even more AI-generated nudity etc.

Note as well that July 29 falls just 2 days before the second quarter report is given to investors, providing Etsy with a topic to discuss during that call. They can claim they are taking action against mature listings without being expected to have removed 100% just 2 days after the ban, and the topic will likely be forgotten 3 months later when the third-quarter call happens. It's possible that, 3 months from now, no analysts will check to see if the ban was actually successful. Perfect timing, I'd say.

What Next?

First, any experienced Etsy seller knows that Etsy attempts to remove now-banned items will result in plenty of legitimate listings being deactivated as well; see the dog diaper example above. Items won't even have to be related to the prohibited categories, as the image recognition bots can be particularly bad. Every time Etsy bans something, even if only within one country or area, there is always collateral damage in the form of non-offending listings being removed. (I've had items deactivated for being amber, drug paraphernalia and illegal plant material, when they were nothing of the sort.)

At one time, you could expect Etsy to reinstate such items after an investigation, but that is less common these days, and frequently takes weeks to months when it does happen. This means all sellers should be alert and watch their deactivated listings folder in the coming weeks, and be resigned to losing best-selling products for no good reason, due to bad bots.

Long term, I doubt this is the last time Etsy narrows what can be sold in the interests of appeasing sensitive shoppers. Even if you 100% support Etsy banning everything that they did last month, you should be uneasy about what could be coming next. If age-limit laws were really behind some of this recent decision, what happens when some US jurisdictions start restricting no-fault divorce? Everything from party supplies to t-shirt slogans to happy divorce gifts could be on the chopping block.

It's also possible the company will try to continue to refine its bots and algorithms instead of outright banning other products. Since Etsy is already shadow banning items for certain searches, are shops with a few LGBTQ2S+ articles invisible right now in places where laws are discriminatory? In places where birth control is illegal or severely restricted, are birth control pill cases still ok? I am not sure we can assume Etsy won't continue down this path.

Whatever your thoughts on the listings Etsy is currently banning, remember that these are businesses who were allowed to sell their wares on the marketplace until this month, and have therefore done nothing wrong. Things you believe in could be the next target.

[cindylouwho-2]

Etsy Delays Canadian Regulatory Operating Fee For Shops It Failed to Notify

On August 14, Etsy sent the above email to some Canadian shop owners, admitting they failed to notify some of us - "a small group of sellers" - that the corporation introduced a 1.15% Regulatory Operating Fee for all Canadian shops that starts August 15. Sellers who received this email will not be subject to the fee until August 29th, and even got an apology!

We should expect a lot of complaints tomorrow as some Canadian sellers become aware of this fee increase for the first time. I have still not received any notification for my jewellery shop - no emails, no dashboard pop ups that some others have reported. (I even logged into my closed shop to check, and it also lacked a notification.) It's extremely unlikely I am the only one.

Given that Google and Amazon are implementing similar fees but are waiting until October, only delaying the fee for 14 days when Etsy admits responsibility for the lack of earlier notification seems quite unfair. Why does everyone else get 30 days warning, but "a small group" only gets 15 days, solely because Etsy screwed up?

What Is Going On?

If you missed my other reports and don't know what this is about, the Canadian Digital Services Tax Act now charges companies 3% on several different categories of digital income such as marketplace service revenue and advertising services revenue. 

Etsy is not charged 3% tax on sellers' gross income; they are being taxed on some of the fees they charge us. If the goal is to force Canadian sellers to cover the whole amount owed, it's not clear why the company is not just applying a 3% fee on our fees, instead of this much higher cash grab. My calculations show that 1.15% of my gross income on Etsy's platform is almost 3 times as much money as 3% of the fees I pay Etsy would be. It's also a 10% fee increase for me, and they still haven't told me they will will be doing this.

Remember, Etsy pays a lot of tax in the United States (see this financial report at page 105) but does not charge US sellers any extra amount to cover those taxes. Forcing sellers from other countries to pay more when Americans don't is just another way Etsy loves to keep commerce inhumane for its non-US shops.

[cindylouwho-2]

RECENT ECOMMERCE NEWS (INCLUDING ETSY), AUGUST 2024

Hello, and welcome to my very last Ecommerce News update here on Tumblr.

After today, these reports will now be found at least twice a week on my Patreon, available to all paid members. See more about this change here on my website blog: https://www.cindylouwho2.com/blog/2024/8/12/a-new-way-to-get-ecommerce-news-and-help-welcome-to-my-patreon-page

Don't worry! I will still be posting some short pieces here on Tumblr (as well as some free pieces on my Patreon, plus longer posts on my website blog). However, the news updates and some other posts will be moving to Patreon permanently.

Please follow me there! https://www.patreon.com/CindyLouWho2

TOP NEWS & ARTICLES 

Etsy has banned gift certificates/cards sold by individual shops, as of Sept 15. Only Etsy Gift Cards are now allowed. The second quarter report press release says they plan on selling Etsy Gift Cards through third parties, but no official word on how and when yet.

Many Amazon Handmade sellers were unable to list new items after a site update on July 31 [post by me on LinkedIn]. While Amazon told sellers to apply for an exemption from the Product ID requirement, some report that is not working, or that they do not have the option to apply for one. 

Reminder that Canadian Etsy shops will be charged a 1.15% Regulatory Operating fee on the item price and shipping cost as of August 15. [I’ve set a bunch of things to expire. If Etsy isn’t profitable enough to pay its taxes, maybe they should consider cutting executive pay instead of squeezing microbusinesses even more.]

ETSY NEWS 

Etsy has updated its Privacy Policy, to take effect August 31. Changes include mention of biometric data. Note that some parts of the policy are screenshots, and therefore not easily searchable nor accessible to screen readers - I am not sure how they can get away with that. I used the Wayback Machine to do a comparison of the parts that software can actually read.   There’s also a new US regional privacy policy, which currently covers laws in several states.  

Etsy is promoting a Labour Day sale August 21-September 2, and has already set up the "Cyber Savings Sale" (November 18-December 3) for Cyber Week. You can schedule the official sales through links in the announcement.

Forbes covered Etsy’s sex toy ban [soft paywall; not safe for work photos]. To no one's surprise, plenty of the banned items are still found on site, including toys and vintage Playboy magazines. 

Etsy is accused of allowing shops based in “illegal Israeli settlements in the occupied Palestinian territory” and profiting off of them. Etsy’s response: "[W]e have shared this information internally with the appropriate teams for review."

Etsy's promised program for buyers - Etsy Insider - will be rolling out as invite-only beta in September. It's a paid membership for US buyers and includes:

Free US domestic shipping on millions of items

A birthday bonus

Limited edition annual gift, designed by an Etsy seller

First access to special discounts and select merchandise

While some of the "special discounts" are paid by sellers, that is a voluntary program shops can sign up for here. That form also allows you to sign up to offer new items to Etsy Insiders first - “drops” - which does not involve offering discounts. Etsy has done these sorts of "offers" in the past, and I believe they have already reached out to sellers for the first round of offers in September (based on some emails I have received from shop owners).

You can now sign up for “Etsy Up”, the virtual sellers conference scheduled for September 10. However, despite saying they have announced “our agenda”, all that is provided is a vague set of topics (other than the fact they will be announcing the Etsy Design Awards Finalists). It makes me wonder if there are official Etsy announcements coming soon that they don’t want to reveal too early by posting the real agenda. If yes, around August 15 is a good bet, given that  Etsy’s Search Analytics will end that day, and many new policies kick in on September 15, just one month later.

The Etsy app is showing rectangular listing images in search for some visitors, but it appears to be a test [Reddit thread with screenshot]. I wouldn’t change anything at this time. 

No, Etsy has not replaced your listing tags. I covered that topic here on LinkedIn. 

I wrote about the new Listing Image Requirement policy and the email Etsy sent to some sellers on Monday July 29. [post by me on Patreon] And not everyone is being fooled by Etsy’s new Creativity Standards, but some acknowledge it will be difficult for Etsy to turn away factory-made goods at this point. [Disclosure: I am quoted in that article]

ECOMMERCE NEWS (minus social media)

Amazon

Amazon’s second quarter revenue was below expectations, and the company predicts nothing better in the third quarter. 

In a surprising change, Amazon has decided to cancel overage fees for Fulfillment by Amazon (FBA) inventory storage, retroactive to July 1. 

Canadian Amazon sellers will be subject to a new digital services fee as of October 1. This is due to Canada’s new digital services tax. 

In a case that may have an impact on other larger ecommerce sites, a court ruled that Amazon is responsible for recalls of products sold through Amazon, including through “Fulfilled By Amazon”. 

US Amazon shoppers can now link their Pinterest and TikTok accounts to Amazon to be able to buy directly from Amazon ads on social media. This is already available on Facebook, Instagram and Snap. 

Amazon is changing its refund policy for Fulfillment by Amazon (FBA) users: if sellers do not receive an automatic reimbursement for loss, damage and returns, they will now only have 60 days to apply for one.  A lot of ecommerce experts think Amazon is making a mistake in setting up a China to US section on the site.

eBay

eBay second quarter revenue and profit was higher than expected, but the third quarter projections are low.  

The eBay app has taken a lot of flack for inserting ads between each item in a purchase history. 

Poshmark

As marketplaces popular for pre-owned items compete for the best new stock, Poshmark is offering “rewards” for listing at least 1 item a week. 

Shopify

Shopify had a better-than-expected second quarter, and expects a decent third quarter as well. Getting larger businesses to use Shopify has helped the tech company, but I still wonder how that affects the small and micro businesses who used to be the target market.

Walmart

The Walmart Marketplace has added Chile as its fourth country, after the US, Canada and Mexico. 

All Other Marketplaces

Hundreds of business owners who sell on Temu held a protest at the marketplace headquarters on July 29. Fines for returns are one cited issue. 

Payment Processing

Credit cards issued by Chase in the US will no longer allow third-party buy-now-pay-later purchases, as of October 10. Conveniently, they offer their own option, Chase Pay Over Time. PayPal has expanded the quicker checkout solution Fastlane to all US businesses, which fills in customer information without a log in.

[cindylouwho-2]

Etsy Second Quarter 2024 Earnings Report: Sales Still Down, But Not As Much

Above: Slide 8 from Etsy's Q2 Financial Results Call, © Etsy.

The company is doubling down on gifts, AI, and "the quality, diversity, and differentiation of our sellers' most unique inventory"

While sales were still down in Etsy's second quarter, the trend is slowly changing, and the number of sellers is dropping as well, hinting that the site clean-up may be working a bit.

We also got some key information on recent Etsy search changes, more on specific ways engineers are using AI, and some interesting details on the new Etsy Insider program announced the same day. This is definitely a report you don't want to miss!

First, here are the official sources:

the press release

transcript of the conference call

slides from the conference call

video of the call (click on “Webcast”)

my summaries of the second quarter 2023, and the first quarter 2024 for comparison

And the key numbers (covering April to June 2024, compared to the same period in 2023):

Sales on Etsy were $2.5 billion, down 3.2% year over year

Total sales for all 3 marketplaces (Etsy, Reverb, and Depop) were $2.9 billion, down 2.1%. [Elo7 was officially sold in mid-August 2023, so its numbers were included in the comparison totals]

Etsy’s revenue (including all 3 sites) was $647.8 million, up 3.0%

Seller service revenue was up 0.9% , while marketplace revenue was up 3.8% across all 3 sites

Net income was $53.0 million, down 14.4% “reflecting a $7.2 million retroactive non-income tax expense” that Canada is to blame for [note that Canadian sellers will now be paying a ~10% increase in fees starting August 15, with a 1.15% regulatory operating fee almost certainly related to this tax change]

Active buyers on Etsy alone stand at 91.5 million, up 1%

Active sellers on Etsy alone are at 6.6 million, up 300,000 from the second quarter 2023 but down 400,000 from the first quarter 2024. [Note that “active” means one charge or transaction in the past 12 months; many “active” shops currently have nothing for sale]

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

What Sellers Need To Know About Search

As you already know, from previous quarterly results calls and other presentations, Etsy is moving away from serving up the most relevant search results - which often might be very similar in nature - and is instead focussing on the quality of the listings now. CEO Josh Silverman now revealed that they are trying to reduce repetition of items and of individual shops in the search results, as a push to show the wide variety of products and styles available on the marketplace. This part regarding recent search tests is worth reading in full:

"In the past, our search algorithms ranked each listing individually based on likelihood to convert, which often resulted in buyers seeing far too many similar items rather than a more holistic set. Here's some powerful data. We roughly cut in half the percentage of searches where a high percentage of listings seen on page one are from a single seller. We reduced the percentage of searches that have two or more listings that may appear identical by over 70%. We're incredibly excited about what this might mean for future visitation, as buyers see a more diverse and higher quality set of listings each time they visit Etsy. In addition to helping buyers, these initiatives also support our sellers, given how important it is that we nurture the best of Etsy across our seller base. Our latest search experiments resulted in approximately 70% of shops having more visibility in search, with the share of search impressions from small and medium shops increasing by nearly 30%." [my emphasis]

That's right: almost out of nowhere, Etsy is suddenly worried about giving visibility to smaller-volume shops with (possibly) fewer items. They were not only cutting down the number of times a shop can appear on page 1, but are also reducing the number of listings that look very similar. If they adopt some version of these tests in the future, this has the potential to harm resellers, shops that only personalize common finished goods, and shops using print-on-demand (POD) services. I know some sellers are upset that POD shops can still use mock-ups - I wrote more about that here - but if looking the same as other merchants may be a huge drawback later this year, suddenly original photos sound like a great advantage.

They didn't mention when they tested this, but we should assume that search changes will keep coming in this area. Given that Silverman also repeated the promise to soon provide better information about how our listings are ranked in search, definitely expect more volatility in the near future. For bigger businesses with tons of listings, you may want to think about how to get your lines into a broader array of searches instead of depending on competing with yourself in a smaller number of large queries.

AI: It Knows Better

Silverman's ideal world is apparently one where the corporation ignores sellers' own descriptions of their wares and instead lets a machine figure it out for us.

His own words are perhaps the best description of what I mean:

"...to better curate merchandise to improve the buyer experience and drive GMS, we're making it easier for buyers to find quality listings for mid-price jewelry, known as demifine, by having human experts determine what jewelry attributes are most important to a buyer's search, think material, gold purity, or hot trends, then utilizing GenAI to infer those attributes to create new search discovery modules and pathways, and incorporate this into on-site experiences such as landing pages. While this search is very much in progress, these better on-site shopping experiences, combined with targeted marketing initiatives, such as tailored social media content, CRM efforts, and improved data feed curation for paid and organic search, contributed to a 9% year-over-year increase in GMS for demifine jewelry in the quarter." [my emphasis]

To summarize: human merchandising experts figure out what the average shopper wants in jewellery in the $100-$200 range, then AI looks at listings and figures out which have those elements. [Sadly, that means that shops making less trendy items could have even less visibility in generic searches, which kind of goes against the diversity thing he was pushing when discussing search earlier.]

Given that Etsy's AIs currently tell me that my pendants are a completely different size than the actual measurements I've already written into the listing, and still sometimes think that something turquoise-coloured is a turquoise gemstone, I'm not looking forward to more of this. [I am intrigued by the fact they are trying to push sales of jewellery in that price range, though, so that's something.]

The New Creativity Standards

No real news here. As promised in previous calls, the July 9th announcement was about ditching the broad concept of handmade - which both buyers and sellers could find confusing - for different levels of contribution by the shop owner. The accompanying ad campaigns are about changing the public perception of Etsy and focussing on the shop owners themselves. Silverman thinks that emphasizing that Etsy has artisan goods may lead to sellers feeling better able to raise their prices.

Etsy isn't expecting the new standards to increase conversion, but instead to bring people who already know Etsy back to shop more often. Silverman also linked this to the search testing discussed above; showing buyers more variety should also encourage more repeat visitors.

Being a Gift Hub Is Still A Big Goal

Some sellers seem to think Etsy is going to give up on being a gift destination any time now, but that seems really unlikely, given that the proportion of orders marked as gifts went up 4% in the quarter while overall marketplace sales were down 3.2%. Furthermore, "we're utilizing monthly US buyer surveys to gauge the impact of our gifting strategies, and this data shows a significant year-over-year increase in prompted consideration of Etsy for gifts." The press release even mentions selling Etsy gift cards through third parties, although that hasn't otherwise been announced or discussed just yet.

As the company keeps adding new gift features - such as video gift teasers and gift purchase reminders - it's clear this is a long-term plan. If you haven't already, look at how your shop can innovate for the gift buyers Etsy is going after, because the focus on gifting is not going away.

"Etsy Insider" Is A Test; It Might Disappear, Or Change

While some sellers are upset about the new Etsy Insider program that will be offered to US buyers via invite only in September, there are a few facts you need to know:

It's a test. It may not go beyond beta, although they are hopeful.

Silverman is really excited about seeing if offering free US shipping will bring people back in more shopping situations. [Since shipping costs have skyrocketed but Etsy hasn't raised the US free shipping minimum set before the pandemic, this point does not bode well for sellers.]

The target Insider members are not Etsy's best buyers, but "people who shop only occasionally on Etsy. Think people who shop three or four times a year...We're targeting more occasional shoppers and seeing if we can upgrade them."

Miscellaneous

Expect even more pressure to use the buyer app, as 42% of sales now come from it. They are even running paid ads for the app, because shoppers who download it come back more and spend more on Etsy in the long term.

Chief Financial Officer Rachel Glaser is retiring, but not until they find a replacement for her, and she will be staying on as a consultant into 2025.

Offsite Ads are up, in part because they are expanding where they are shown, with way more social media ads. Those tend to bring existing buyers back sooner rather than attracting new buyers as Google Shopping does.

While Offsite Ads spending was up, brand spending was down, because they spent so much on hyping Gift Mode in the first quarter.

98% of sales now go through Etsy Payments [while that led to more income this quarter, it also means there isn't much real growth to come, with only 2% of sales going to other payment processors today.]

The new shop fee is cutting down on fraud and also the number of new sellers. Fraud tends to go way up in the fourth quarter, and they feel they are much better prepared to prevent it this year.

Sales were up at Depop, and Reverb continues to do better than the average musical instrument business.

The economy is still volatile.

Finally, while all of Etsy's top 6 categories were down in the first quarter, 3 were down less in the second, paper and party supplies were about even, and toys and games actually increased.

My Thoughts

It would be easy to criticize Etsy for not managing to increase sales again this quarter, and for expecting to be slightly down in the third quarter as well, but the truth is lots of non-essential ecommerce is still down or struggling. Ecommerce stocks were down this week after several other companies such as Wayfair reported poor numbers. Amazon's online sales were only up 5% in the quarter, which is a bad result for them, especially given that they sell a lot of essentials and grocery items. Amazon revenue missed projections as well.

On the other hand, it would also be understandable if some people fell for the "increasing impressions for small shops/marketing true artisan goods/reducing scammy sellers" rhetoric. It sounds great, but to me it's all a bit too good to be true, especially given that the site just allowed AI art, and 100% commercial gift baskets and commercially-made holiday decor to be sold, competing with genuine handmade artisan creations. We'll have to see how much visibility wreath and pillow resellers get once they realize they are allowed now.

More importantly, Etsy might have tried pivoting a lot earlier instead of losing so much goodwill over the past several years with the increasing quality decline of the site's offerings. I guess someone at head office finally noticed all the articles and social media posts about how Etsy is just AliExpress-lite with a veneer of handmade now. The time to retain core buyers instead of disappointing them arrived well before 2024. What took them so long?

In other news, it's looking there will not just be new insights for Etsy search coming soon, but also actual new changes to search. Silverman discussed the search tests as if they were the plan going forward, while still calling them tests. The increased use of AI to identify attributes for listings is disturbing, given how horrid Etsy has been at this for years now, but no one should be surprised. Expect a lot more of this, and expect it to disrupt traffic for some.

Wanting more diverse search results is actually great if it works and shows people what they are searching for. That doesn't always happen right now, of course. Getting rid of some mock-ups is also a strong idea, as long as Etsy follows through and makes the correct creativity standards very evident to shoppers, thereby elevating items sellers truly made by hand over simple POD. Right now, though, the creativity standards are frequently applied incorrectly, and way too many handmade shops are having items removed when they have done nothing wrong. Without an effective way to appeal bad image bot decisions, many of the proposals might harm more legitimate shop owners than they help.

I wish I felt like Etsy could truly pull this out of the fire, but we should not be surprised if the final 5 months of this year give us buckets of chaos randomly tossed about various features on the site, and even more instability for many sellers. Plan for major disruptions while still hoping for improvements.

[cindylouwho-2]

RECENT ECOMMERCE NEWS (INCLUDING ETSY), LATE JULY 2024

Things have been hectic so this is a long one update - all the Etsy and other ecommerce news from the past month, broken down for your convenience!

Next week could be a big Etsy news week, with the 2nd quarter report being released, and the mature items ban kicking in. I'm also working on analysis of the new Creativity Standards, but we may not have more substantial information on those until Etsy makes another move. Right now the categories are a mess, but that could change.

A reminder that you can receive more timely updates plus exclusive content - including live chats with me on select topics such as Etsy's new Creativity Standards - by supporting my Patreon: patreon.com/CindyLouWho2

TOP NEWS & ARTICLES 

The European Union is considering making packages valued under 150 euros subject to customs duties when entering the EU. This is widely seen as a way to reduce Shein and Temu orders. 

The Etsy Creativity Standards announced on July 9th have a lot going on; here is my short summary so far. [post by me on Patreon] While I would not worry too much about this just yet, I expect them to be more important in the near future.  Etsy adding "Made by", "Handpicked by" to every listing is currently full of errors, but more disturbingly, even when a seller points out these errors with arguments from the written policy, Etsy Support is sometimes insisting that the designations are correct. For example, original paintings are lumped in with AI designs and digital downloads. [Post by me on LinkedIn] 

Amazon is imposing new rules regarding on-time delivery rates (OTDR); sellers that do not meet the standard of 90% on time delivery will not be able to continue selling. Businesses are exempted if they use the following tools: Shipping Settings Automation, Automated handling time, and Amazon Buy Shipping. Amazon is allowing only 5 days after shipment for products to arrive within the US. You can read the announcement and vigorous forum discussion here, and EcommerceBytes did a summary of the changes and some complaints.

ETSY NEWS 

As Etsy's widespread ban on many adult-themed products is about to take effect on Monday, I considered why Etsy felt the need to take far more drastic steps than Amazon & eBay has in the same markets. [post by me on Tumblr] The upcoming ban started by getting media attention from Mashable, and quickly escalated to the New York Times [not a gift link; soft paywall]. Etsy is still not commenting on why they are doing this. From the NYT article: "Even before the ban, it was getting harder to run his business, Mr. Goldstein said. So, he thought, “Why don’t we just make our own marketplace?” This year, he started the website Spicerack as an independent alternative to Etsy. The online boutique already has about 75 sellers, which are vetted to make sure they’re not “dropshippers” or simultaneously listing products on e-commerce behemoths like AliExpress or Amazon. Mr. Goldstein said that Spicerack is in the process of adding about 100 more sellers, half of whom signed up when the Etsy ban was announced." From the BBC: “In many countries there is pressure on platforms, sometimes backed by new legislation, to do more to prevent under-18s from encountering explicit content, and to remove illegal or "harmful" content from their platforms. Payment processors are also increasingly wary of working with platforms that enable sex based commerce....those concerns could be addressed by more clearly labelling and separating adult product listings..." The Guardian interviewed a few sellers who are affected.

While Etsy previously stated that the new shop set-up fee would be $15 USD, they quietly changed that, to whatever they feel like charging. [post by me on Patreon]

In case you missed it, the new listing form seems to be triggering Etsy Ads campaigns to start without the seller’s knowledge. [post by me on LinkedIn] Since my post, there are still more reports of this happening, and even more. 

I regret to inform you that Etsy’s Search Analytics are going to disappear after August 14 [post by me on LinkedIn], per a banner on the page.

Canadian sellers will have to pay a 1.15% “Regulatory Operating Fee” on all of their sales income (including shipping and gift wrap) starting August 15. This is likely due to a new law taxing large ecommerce platforms 3% of their Canadian income, which came into effect June 28. The tax applies retroactively back to the beginning of 2022, so Etsy is likely overcharging us to cover those earlier amounts. 

Sellers having difficulties with the domestic pricing tool not working correctly may want to try these tips from an Etsy forum thread: Set the domestic price to the global price amount, save, and then go back in and change the domestic price to your preferred amount, then save again. This apparently works for both new and existing listings, but there are 3 drawbacks: 1) it is time-consuming, 2) it needs to be done any time a listing is changed/edited (including renewals), and 3) it doesn’t seem to work for France. (I don’t ship to France so I cannot test the last point.) Remember, if you have a sale go through for the wrong price, contact Etsy and demand to be compensated the difference. 

Still don’t believe that Etsy is serious about shipping on time? See this Reddit thread by a seller who ignored a 30-day warning, so all of their items were removed from search. From this screenshot, it appears their average order value was fairly high, but that doesn’t mean Etsy will tolerate late shipping from shops with cheaper items, so beware. 

Etsy is testing filtering out digital items from search results unless the terms match a digital item search. See Etsy forum threads here and also here. 

A new academic study calls out Etsy and other online marketplaces for allowing illegally-killed bats to be sold on their sites. “We refute any assertion that the online bat trade is ethical. Again, statements that bats were captive-bred are absurd—bat farms are nonexistent—and it would be impossible for suppliers to find bats that have died naturally in the kind of condition and numbers needed to supply an ornamental trade. These bats were hunted.” The New York Times has also now covered this story [soft paywall]. 

The virtual seller education event Etsy Up is scheduled for September 10. You can register here, but there is no program yet. Usually this event has almost nothing worthwhile for experienced shops, and Etsy generally uses it to push their paid services and integrations along with basic info. 

Etsy is looking for sellers to join their Advocacy program and “share your story”. Beware that sometimes Etsy’s “advocacy” is as much for Etsy as for its sellers, so they are looking for stories that fit Etsy’s own goals. 

The Etsy Design Awards have opened; the final date for submissions is August 8. 

Etsy’s second quarter results for 2024 will be released July 31.

ECOMMERCE NEWS (minus social media)

General

Shein and Temu are facing investigations under the EU’s Digital Services Act. “In a press release, the EU said it’s asking Shein and Temu for more information about measures they’ve taken to meet DSA obligations related to what’s known as “Notice and Action” mechanisms, which should allow users to notify the marketplaces of illegal products.It has also requested info related to the design of their online interfaces, which the pan-EU law mandates must not deceive or manipulate users, such as via so-called “dark patterns”.” Temu is also being sued by Arkansas for having an invasive app that is accused of harvesting data without user permissions. “According to the complaint, Temu is allegedly obscuring its unauthorized access to data through misleading terms of use and privacy policies that do not alert users to the full scope of data that the app can potentially collect. That includes not telling users about tracking granular locations for no defined purpose and collecting "even biometric information such as users’ fingerprints."

Amazon

Amazon now has an AI shopping “assistant” on its US app, called Rufus. “Customers can ask questions about products, comparisons and buying considerations. The AI can provide suggestions for specific tasks or projects.” As per usual with AI, “tests show Rufus doesn’t always provide accurate information.” A review from Marketplace Pulse notes that “Amazon’s AI assistant fails to help shoppers find the best product among the millions in the catalog. It transforms broad questions like “What are the best cycling gloves for winter?” into a few links to product searches — the same searches a shopper could have typed themselves. It refuses to make product recommendations, show specific products, or suggest from the thousands of options. It can’t directly answer the question, “What are the cheapest batteries for my TV remote?”

Any sellers who had items removed for being plants or seeds when they actually aren’t should follow the instructions linked to here to get the situation resolved. An Amazon employee warned sellers: “Please do not acknowledge the violations as these will result in the deactivation of your listings.” Affected businesses should instead appeal the flags.  

Amazon is planning a discount drop shipping from China section, widely seen to be competition to Temu and Shein. However, “[i]t is not clear if these shipments will be made using a U.S. trade provision that exempts individual packages worth less than $800 from U.S. customs duties.”

The European Commission has asked Amazon for more information on “recommender systems, ads transparency provisions and risk assessment measures.” 

Only 1% of US Amazon sellers also offer their items outside of North America. “Due to its proximity to the U.S., Canada has more successful sellers from the U.S. than Canada.” If you have a unique product, this could be an opportunity.  Amazon returns are creating huge workloads for UPS stores and other retailers that accept them. “Amazon “makes up about one-tenth of our profits, but it takes up about 90 percent of the working day,” said Jeremy Walker, a store associate who worked at a UPS Store near Dallas that received between 300 and 600 returns per day.”

Depop

After trying it out in the UK, Depop is removing selling fees for the United States, starting July 15. Payment processing fees still apply. “[B]buyers will now be charged a "marketplace fee" of up to 5% plus a fixed amount up to $1.”

An interview with Depop CEO Kruti Patel Goyal reveals they plan “to bring Depop to a bigger and broader audience over time.” 

eBay

eBay is slowly rolling out changes to the Active Listings page. 

eBay sellers can now get cash advance loans through Liberis, the balance of which gets paid as a percentage of the seller's sales. 

New sellers in the UK might see “automated feedback” on some of their orders, to "help [users] buy and sell with confidence". It will say "This seller successfully completed an order", and is removed once the actual buyer leaves feedback. 

Michaels MakerPlace

Abby Glassenberg reviews Michaels’ MakerPlace popups inside their retail stores. Results seem mixed.

Shopify

A few hundred thousand Shopify users may have had their names, addresses and other data put up for sale on July 3 after a breach. Shopify denies it had any security issues and claims the data came from a third-party app. There was a known data breach at Evolve Bank and Trust in June; that institution is a supporting partner for Shopify Balance. It does appear that Shopify is notifying the affected individuals.

Walmart Walmart is adding pre-owned collectibles to its marketplace. “Eligible categories include Toys (Figures, Dolls, Trains, Plushies, Games, LEGO, Funko, Diecast Cars & Hot Wheels); Media & Music (Movies, Vinyl, Music, SteelBooks, Musical Instruments & Entertainment Replicas); Trading Cards; Comic Books & Books; Sports Memorabilia; and Coins.”

All Other Marketplaces

Indiegogo is opening an ecommerce website for items created through crowdfunding campaigns on the platform, called IndieShop. 

Etsy-owned Reverb now has an “outlet” page, where businesses can sell off their overstock, seconds and out-of-date models for 20% off and free shipping. Most products sold through the main portion of Reverb are used, not new, so this competes with regular sellers. 

Not sure if selling on Faire is right for your business? Here’s a handmade-focussed review of the wholesale site.

Payment Processing

Klarna is now available through Adobe Commerce (previously Magento). 

Shipping

USPS rates for labels on most platforms went up July 1, ahead of the previously-announced July 14th increases. Ina Steiner re-posted the numbers from eBay and Pirate Ship. 

USPS released the addresses and other data of logged-in Informed Delivery users to Meta, LinkedIn and Snap. The company claims it didn’t know the data transfer was happening. 

The free USPS Priority medium shipping tubes are no longer being made, but you can still order existing stock. 

Royal Mail’s Tracked 28 & 48 are now available at post offices. 

UPS’s holiday surcharge rates for the US have been released; the lower surcharges start September 29th.

Shippo has new Canada Post rates from now until January, and the Tracked Packet rates to everywhere but the United States are cheaper than Etsy’s (which are based on Level 4 of Solutions for Small Business). Remember that Shippo makes you pay for a higher tier of service if you use over 30 labels per month.

[cindylouwho-2]

Etsy Deletes the Reselling and Gift Baskets Legal Policies In Favour of New "Creativity Standards"

This morning (July 9, 2024) Etsy released several announcements regarding what can be sold on Etsy, new categorizations for items sold on Etsy, and a new ad campaign. You can read my early thoughts on that here.

As part of this overhaul, they abolished 2 longstanding site policies, namely the ban on reselling in the handmade category, and the ban on almost all gift baskets containing commercial goods. Since they deleted those pages and didn't even mention those rules in any of their announcements, I have preserved those now-dead policies below. Thanks to Bing for still having caches of deleted pages!

First , the Reselling policy (text follows the screenshot)

text of screenshot:

"You have reached the cached page for https://www.etsy.com/legal/policy/reselling/239324376512

Below is a snapshot of the Web page as it appeared on 2024-07-08 

Reselling

“Reselling” is selling an item that you, the seller, did not make or design. Etsy's marketplace includes handmade items, vintage items, and craft supplies. Reselling is only allowed in the vintage and craft supplies categories.

Everything listed in our Handmade category must be made or designed by you, the seller. Reselling is not allowed in Handmade. Read more in our Handmade Policy.

Examples of prohibited reselling include the following:

Creatively repackaging commercial items (for example a gift basket consisting of non-handmade items)

Curating a collection of others’ handmade goods that you did not design or make

Selling items made or designed by another seller who is not part of your shop

Selling traditional handicrafts or fair trade items that you did not design or make

Offering personalization as optional, or featured as a separate item (i.e. an add-on card, gift tag or written note), without altering or changing the commercial item.

Etsy reserves the right to remove listings that do not follow our policies. Sellers remain obligated to pay any fees incurred in listing such items.

Last updated on Jul 25, 2023"

And finally, the policy Etsy outright ignored for many years, the Gift Baskets policy:

"You have reached the cached page for https://www.etsy.com/legal/policy/gift-baskets/239976666926

Below is a snapshot of the Web page as it appeared on 2024-07-07 (the last time our crawler visited it).

Gift Baskets

Repackaging or creatively curating commercial items for resale as a gift basket or set is not allowed in the Handmade category, unless it is part of a new structure (see below).

You may not group new items you did not make into a basket or set even when based on a theme, idea, or life event.

For example, a care package for new parents, a college student, or somebody experiencing an illness containing any new items you did not make is not allowed, no matter how caringly curated it otherwise is.

DO: Include only qualifying handmade, vintage, or crafting supply items. DON’T: Include any mass produced item in a gift basket, unless it is part of a new structure.

If you wish to sell an item that contains some commercial components, this may be possible only if the commercial items 1) have been used as components that form a new structure or sculpture and 2) are physically attached to one another.

For example, a diaper cake is an item where components are creatively attached to each other to create a new item.

DO: Creatively use mass-produced items to form a new structure where the items are physically attached to one another. DON’T: Include newly-made, mass-produced items in a gift basket unless they are part of a qualifying structure.

Last updated on May 3, 2022"

I will have more thoughts on this on my main website blog soon, but yes, this means that many commercial items are now officially allowed to be sold on Etsy, as long as they are listed correctly.

[cindylouwho-2]

RECENT ECOMMERCE NEWS (INCLUDING ETSY), LATE JUNE 2024

Welcome to my latest summary of Etsy and other ecommerce news, relevant for small and microbusinesses online!

Get these updates plus my website blog posts via email: http://bit.ly/CindyLouWho2Blog Get all of the most timely updates plus exclusive content by supporting my Patreon: patreon.com/CindyLouWho2

TOP NEWS & ARTICLES 

Etsy has yet again changed how processing times work for some countries, and this time, they’ve opted everyone into working on every national holiday. [post by me on LinkedIn, with screenshots] Many people are happy they can officially opt out of working on some days, but not so happy Etsy opted them in. The next day, Etsy clarified that this is currently only available for Canada and the US, and is only for national holidays, not regional or provincial ones. 

The old Etsy listing form disappeared as promised on June 25, and the new one is still a mess [post by me on LinkedIn]. Etsy claims to have fixed numerous issues with the new listing form, including manual translations, bulk editing, and sharing to Pattern. No word on the numerous pricing issues that have affected non-US sellers in particular through the domestic pricing tool, and that have apparently changed both variations and shipping prices for US sellers. The latest new listing form fix is the inability to save drafts, although it doesn’t seem to be working for everyone. 

USPS seems to have reused its tracking numbers early recently, with widespread reports of labels created June 18 and later showing as already being delivered in April or May. I’ve updated that linked Patreon post with info on how to get Etsy to correct their own records, so that seller protection and Star Seller status are not affected. 

ETSY NEWS 

Wondering if your images meet Etsy’s minimum size requirements? I did a video for you [on Patreon] so you can easily check for yourself. 

Etsy is still pushing shop loans through YouLend, “up to two times your monthly revenue.” Thanks to Michele from Artologica for the screenshot of the dashboard notification, and some of what you see once you click it:

and a link to the Etsy program at YouLend. Please read the terms carefully, as they get repaid through your future sales. It appears to be US-sellers only. 

There’s a new “Made for You” page with a lot of links to various features for buyers, but I don’t see it linked anywhere on the desktop version of the site. I also don’t really see the point, but maybe we’ll have to wait and see how they use it. 

Apologies for missing this one, but sellers in Turkey must now use “ShipEntegra” to mail orders, unless they already use another service. In effect, this means all new shops in Turkey are required to sign up and only ship orders through ShipEntegra, as of June 3. 

Apparently the “Buy More and Save” badge Etsy applied to some listings that already had multiple quantity discounts is just a test [item 2] per Etsy.

ECOMMERCE NEWS (minus social media)

General

Facebook appears to be removing links to EcommerceBytes on its platforms. 

Amazon

Amazon's "Subscribe & Save" feature will be available for products that are not Fulfilled By Amazon items, as of June 27. 

Amazon's Prime Day 2024 is July 16-17th. 

“Ad Relevance” is Amazon’s proposed solution to the end of ad cookies; it has AI at its core. 

North American Amazon orders will stop using plastic air pillows by the end of the year. 

Amazon is facing another lawsuit on copying successful sellers’ products and manipulating the Buy Box, this time in the UK. 

eBay

As of July 1, eBay will be charging most of its sellers more for Express Payouts: $2 each time instead of 1.5% of the total. 

eBay is now charging buyers of luxury wallets and handbags an optional $40 for authentication, for items between $200-$499.99. Items $500 and up are still authenticated for free. 

The eBay Summer 2024 Seller Update included new tools and renamed programs, but some of them had already been announced. 

If you are using the eBay seller app, watch for draft listings disappearing. 

Shopify

Businesses selling through Shopify can now apply to sell on Target Plus, a third-party marketplace that currently has around 1200 sellers. 

Shopify now has a chatbot for site owners, called Sidekick, but it is currently only available to English stores in North America. 

Walmart

Walmart+ Week started June 17th, almost a month before Amazon’s Prime Day. 

All Other Marketplaces

Just a few months after ending selling fees, Mercari is laying off a substantial portion of its US-based workers. It’s also still looking for new sellers, offering credits that can be spent on the site for opening a new shop and inviting friends. 

Payment Processing

Apple Pay Later is being phased out in favour of “Affirm”, a third-party Buy Now Pay Later app that will be available in more countries than Apple’s own product. 

Shipping

USPS hopes to change its non-standard package surcharges by region, charging more when the package travels further. 

[cindylouwho-2]

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

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

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

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

First, here are the official sources:

the press release

transcript of the conference call

slides from the conference call

video of the call (click on “Webcast”)

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

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

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

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

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

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

Net income was $63 million, down 15.5%

Active buyers on Etsy alone stand at 91.6 million

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

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

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

Gift Mode and Gifting Initiatives Aren't Going Away

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

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

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

Etsy Search and Discovery

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

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

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

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

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

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

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

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

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

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

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

"Keep Commerce Human" and Handmade Policy "Violations"

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

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

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

The Economy

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

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

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

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

Miscellaneous

In shipping updates, Silverman reported that:

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

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

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

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

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

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

My Commentary

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

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

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

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

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

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

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

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

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

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

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

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

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

[cindylouwho-2]

Etsy Sellers In At Least Some EU Countries Can Opt Out Of Offsite Ads

...but Etsy doesn’t want you to know that

When Etsy announced their Offsite Ads program in 2020, one of the biggest complaints was its compulsory nature for some sellers. Anyone who had grossed $10,000 USD or more in the previous 12 months is automatically enrolled for life. The few sellers who consulted legal experts at the time were told the program was legal. 

Turns out, that apparently isn’t true, at least in some parts of the European Union. Although no one I’ve talked to can cite the actual legislation, some EU sellers just need to mention the fact to Etsy staff if they want to be removed from this advertising due to EU law, and that has been going on for a few years now. Here’s one older post on Reddit explaining what to do, and here is a much more recent thread from the Etsy forum. So far, we know that sellers in France and Germany have been able to opt out permanently. If you are in another EU country and are not allowed to remove yourself from the Offsite Ads program, please let me know. 

UPDATE (August 4 2023): Etsy has allowed a few shops in the United Kingdom to opt out. (September 7, 2023): Etsy Support now says that sellers in the UK can opt out of Offsite Ads as of February 2024, due to the Digital Services Act. 

UPDATES (March 15-April 19 2023):   Etsy Support told a seller in The Netherlands that only "Germany, France, Austria, and Italy" can opt out, but that hasn't been confirmed by an independent source. 

Per Etsy Support, sellers in Spain are allowed to opt out, but sellers in Ireland are not. 

Etsy Support is now allowing sellers in The Netherlands to opt out, despite previous denials. A seller in Belgium also now reports a successful opt out. 

A seller from Greece was told they could not opt out. 

Poland is now confirmed as the 8th country that can opt out.

Greece and Bulgaria are the 9th and 10th countries that can opt out, despite Etsy Support previously telling another Greek seller they were not eligible. 

Now adding Croatia, Portugal and Switzerland to the list. 

No one will be surprised to learn that Ireland can also opt out. 

Received an email adding Slovenia to the opt-out list. 

How To Opt Out Of Etsy Offsite Ads In The EU If You Sold Over $10,000 In 12 Months

Contact Etsy Support, through chat, your dashboard, or this link: https://help.etsy.com/hc/en-us/requests/new?segment=selling#issue_sell_offsite_ads-contact_select  

Tell them that you wish to opt out of Offsite Ads as allowed by European Union law. 

Most sellers report being removed almost immediately. One even reports getting a month’s worth of Ads fees back after complaining that Etsy should have disclosed this option. 

Is There A Downside To Opting Out? 

There could be, if your shop currently gets a lot of sales from those ads. Those orders won’t automatically be replaced by orders from elsewhere for all shops. In the summer of 2021 during the Facebook boycott, some sellers who were able to leave Offsite Ads for the month were shocked to discover that their sales really dropped, as the orders from the ads were at least partially carrying their shop momentum. [Etsy also removed my shop from the program for one month, at my request. At the time, I was getting around 15% of my sales from these ads. When Etsy reinstituted my participation after the boycott, those sales dried up for many, many months, although they have more than rebounded now.] Note that some lost no sales at all; it really depends on a shop’s traffic sources and momentum. 

You may think that you will do fine without the program, but there is no way to be sure until you try. If you find you prefer using Offsite Ads after all, re-enrolling may not bring those orders back. So think carefully before acting!

If you know more about which legislation allows this, or what countries are permitted to leave Offsite Ads, please contact me here, on Twitter, or via email with the information. 

I will update this post as needed. 

Updated: September 7, 2023

[cindylouwho-2]

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

[cindylouwho-2]

Etsy Listing Removals Under The Creativity Standards - How To Appeal

As I detailed last month, Etsy has recently been deactivating quite a few listings under the new-ish Creativity Standards, and is not allowing many sellers any right to appeal. A lot of items have been removed simply because their photos were stolen and used on other sites. Some shops have been suspended, again without any real ability to appeal.

However, some shop owners - including myself - managed to get listings reinstated despite initially being told that was impossible. While there is currently no guaranteed way to force Etsy to look at your evidence their bots erred in some way, there are methods that seem to help, and also some things sellers should never, ever do.

Below, I am sharing my best tips for forcing Etsy to reconsider takedowns and suspensions under the Creativity Standards, as well as ways you can draw attention to this very serious issue.

Step 1: Make Sure The Removal Was Due To The Creativity Standards

There are numerous reasons Etsy might close a shop or place an item in your inactive folder, so don't assume it is a breach of the creativity standards unless Etsy tells you that. For example, sellers often get suspended for perceived risks based on their personal or financial information, or their customer service history.

Even when just a single listing is removed, Etsy may have done this based on the rules in the Prohibited Items policy. There are lots of things that cannot be sold on Etsy, including recalled vintage products, many sex toys, and listings making medical claims. Other reasons for deactivations include legal claims of intellectual property infringement. Those are treated much differently than violations of most other policies, and therefore need a different approach by the seller.

While Etsy does make mistakes, usually the email will state the correct policy. So check that email first before assuming this is about someone stealing your photos.

Step 2: Make Sure Your Item Was Actually Allowed Under The Creativity Standards

This step may sound obvious, but so many rules have changed lately that we are seeing people assuming Etsy is wrong when in fact the shop's listings are no longer allowed. Even if you know your photos were stolen by AliExpress, for example, make sure you take the additional step of being completely sure you have a legitimate reason to appeal.

Etsy used to permit the following items on the site under the previous handmade rules - or sometimes didn't enforce those handmade rules - but now bans the following:

bundles of AI prompts

"mystery boxes" where the contents are truly a mystery - every item must be clearly described

a commercially-made pendant on a commercially-made chain - note that the hand-assembled rules now require using jewellery tools to add a charm to a chain, so just sliding a pendant you bought onto a chain you bought is no longer sufficient.

We've seen all of the above removed, and Etsy will likely get more aggressive in this area in the future.

There is also the issue of mockups being used in the first image when a physical product is shipped and the seller is not using a production partner. Etsy banned that as of July 9, and although I am not aware of any takedowns that were positively due to that rule yet, we should expect it eventually.

Personally, I would not be inclined to appeal a takedown where my listing might have another violation, except maybe when Etsy confirmed that they removed my item because its photo was found elsewhere. It's always best not to call attention to yourself when dealing with Etsy policies.

Step 3: Check To See If You Can File An Automated Appeal

So you are sure that Etsy made an error when they removed your item under the Creativity Standards, or suspended your shop due to multiple such removals. What next?

Etsy has an Appeals page, and when you click on it, it tells you whether or not you have any issues that can be appealed. When Etsy removed my listing, this is what I saw:

So I could not file an automated appeal, and had to open a regular Support ticket.

Suspended shops are more likely to have the official right to appeal, and should appeal through that page if possible.

Step 4: Pull Together All Of Your Evidence

One of the biggest mistakes Etsy shop owners make is automatically appealing as soon as they have an item removed or are suspended. Don't appeal right away. Make sure you have everything you might need - including video of you making the items and of your supply purchases, and proof you have filed legal takedowns for any of your stolen photos elsewhere - before even considering hitting that appeal button. Telling Etsy "I would be happy to provide X" in your appeal is not going to help you; submit everything they could possibly want upfront.

Depending on your situation, you might need:

video of you or your shop members making the item. Showing your supply stock in the video is extra proof

proof of supply purchases - invoices, photos or video of labelled supplies

for stolen photo claims, proof of DMCA takedowns or other copyright removal cases you opened

for stolen photo claims, the original photos before you cropped or otherwise changed them. Having the original data still attached is best

proof you own the other shops or sites where you sold this product and used the photos

any previous correspondence you had with Etsy regarding the affected listings - some shops have the same items removed repeatedly, even after Etsy staff previously admitted the deactivation was an error

for vintage items, proof of age, or certificates of authentication

If you appealed in haste and now realize you forgot something, try to update the information. This may be as simple as adding to an open ticket (which you can do here), or contacting Support through chat or a call back so they can do it for you.

Step 5: Appeal

Once you have collected everything, you are ready to appeal.

If doing this through Etsy's Appeals Center, you will have to answer questions in their format. If you cannot use the Appeals Center, you will need to submit a regular Support ticket using this link for listings. [Shop suspensions should usually have the right to appeal through the Appeals Center.]

Keep it short, professional and factual, and only speak directly to the suspected reasons. Don't tell them the history of your shop, or how much money you lose daily while the listing is deactivated, or how frustrated you are with Etsy. All of those things are valid, but they do not matter to Etsy Trust and Safety. Give yourself the best chance of winning this by being concise and calm. Save the rest for if you have to go public with your complaints.

Which leads us to...

Step 6: Escalate After Etsy Rejects Your Appeal

At the moment, Etsy Support is telling most sellers they cannot appeal listing removals, so almost all tickets opened will receive a boring cut and paste telling you why they can't help and how you need to read the email you received carefully to learn what you did wrong. Of course, that email gave you almost no useful information, so you seem to be back at square one.

Fortunately, there are several different ways you can try to get Etsy to consider your appeal:

Keep trying with Support/Trust and Safety; I was rejected the first 5 times. Stick with one ticket until they close it; only then should you open another. Try live chat on your Shop Manager page (bottom right corner) or request a callback if that option is available to you. [Please note that any phone numbers you find online for Etsy are likely scammers; there is no line to call in. You need to request they call you back.] Mention that Josh Silverman said we could appeal listing takedowns that were due to the reverse image search bot, as I did. Sometimes Support will give you more information about your deactivation, including links to the stolen photos, or links to very similar items they say prove your item isn't handmade. This could be very useful in solving the problem. However, whatever Support says, do not relist the item yourself. Some shop owners have followed Etsy advice to create a new listing and then had those taken down too. Even relisting with different photos can be risky, especially if Etsy has not told you that stolen photos were the issue.

Post a thread in the Etsy forum. Although a moderator will almost certainly close the thread, they also usually escalate your complaint with other departments. I've seen people get help within 24 hours after posting there, although not very often lately.

Go public with your complaint; Etsy hates being called out publicly, especially if the post gets traction. For example, tag Etsy on a post about this on different social networks. LinkedIn has worked for some people. A few sellers got their problem fixed after filing a complaint with the Better Business Bureau, for some reason. (Even though the BBB has no real power, Etsy seems to take them seriously.)

Try to get media attention. Etsy hates that even more than viral social media posts. Feel free to show them my article.

Get legal advice. Depending on the jurisdiction, there could be significant issues with Etsy removing items and suspending shops without proper notice and accountability. You may be able to report this to government authorities. Some people are reluctant to even look at legal options, but they can sometimes be the best solution to some Etsy problems. Unfortunately, I am not aware of anyone currently willing to take on all of these cases at once, but many areas have free or discounted legal advice for artists and small businesses, so many sellers should be able to find a lawyer if they want one. Call around and ask for referral advice if the first office you reach cannot take your case.

How Can Etsy Shops Avoid Takedowns Due To Stolen Photos?

Let me be clear right off the bat - there is no way to guarantee Etsy will not deactivate your items or suspend your shop over stolen pictures. Since some of the removals have been for selling items similar to those on other sites and not the exact same photos, anyone could be caught by these image bots. It's not even limited to handmade items; some vintage sellers and supply shops have had Creativity Standards takedowns as well.

The most important thing you can do to prevent this is go after as many photo thieves as you can. If you have a small shop, you may be able to do this yourself, doing reverse image searches and filing DMCA/copyright claims. I've found this Chrome extension very useful for tracking down images, because it covers many different reverse image search engines. It's not enough to just look at one, as they all have different results. TinEye, for example, often misses Etsy listings.

Here are the reporting portals for the top sites that Etsy seems to be searching for duplicate images:

Shein

Temu

Alibaba (includes Aliexpress)

If this job seems overwhelming, your other option is to hire someone to do it for you. You can go with an individual agent, or register with an online service such as Pixsy. They will continuously scan for your copied photos, with the first 500 for free. Pixsy is probably the best known company like this, but there are plenty of others out there.

Yes, all of this costs time and/or money. But Etsy doesn't care how much it hurts you. It seems unlikely that the company will roll back this aggressive set of bots doing Creativity Standard removals, or that they will hire more staff to monitor these claims without charging sellers even more for basic services such as Support. So, these are the options available - protect yourself as much as possible, or risk having items removed.

More disturbingly, a seller was recently told that a solution to the problem was not to sell the same items on other online marketplaces:

While this was probably yet another error by first-tier Support, it may actually be Etsy's hidden intent with this issue, even if not a written rule. Etsy now wants to be the destination for unique items; I've written about how that is likely to hurt any shop that is posting items for sale that can be found elsewhere or easily replicated.

It would honestly not surprise me at all if Etsy is taking multiple approaches to whittling down repetitive search results and reducing the number of small sellers on the platform, and the faulty bot removals are an official part of that strategy. Make it harder to sign up for the site, then remove or assign lower rank to any listings that appear to be made of common components or from common designs that can be duplicated by others, even if they follow all of Etsy's rules.

If that isn't the corporation's goal, then Etsy needs to fix this problem now, and provide a timely right to appeal.

[cindylouwho-2]

Etsy Misrepresenting Frequency and Discount Level of Seller Sales

A few weeks ago, Cat from the Etsy shop Artsy contacted me about text Etsy had added to some of her sale items. Featured in green right below the sale price, it said "Rarely on Sale! First sale in 6+ months." Might be a good nudge to encourage orders, right? The problem was, it wasn't true. Cat offers regular sales, and was worried that her repeat customers would think to she was lying to them.

I asked around, but could not find any other examples, so filed it away as Etsy glitch #4,289,011 and didn't think much more about it.

...until I found this post on Reddit, where several sellers report similar issues. Entitled "Why does Etsy lie?", the post has a screenshot of a 10% off sale item where Etsy states "New markdown! Biggest sale in 60+ days". The seller said they ran a 25% off sale for Labour Day, which is a much bigger discount.

Is anyone else seeing something similar? I'd love to post more examples.

[cindylouwho-2]

RECENT ECOMMERCE NEWS (INCLUDING ETSY), Early May 2024

Welcome to my latest coverage of Etsy and other ecommerce news, early May edition. I am off for a short vacation Monday, so thought it best to get this report out now.

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TOP NEWS & ARTICLES 

Etsy’s first quarter financial report for 2024 was not great, but that was expected.  The real news is that they no longer expect the current quarter to be much better [Tumblr post by me]. Also, they are still planning on changing search. 

Canadian shipping service Chit Chats is shutting a dozen offices in 4 provinces, starting April 29 through May 15 [LinkedIn Post by me]. It appears they expanded too fast and have much more competition now than when they first opened, so the additional locations were not very busy. Some may be replaced by drop off points. There is a thread in the Etsy forum with more info.

Etsy CEO Josh Silverman made over $16 million in 2023, roughly the same amount as 2022 [pdf; see page 56]. Almost all of that was stock options. Chief Financial Officer Rachel Glaser made over $8 million, as did Chief Technology Officer Rachana Kumar. 

ETSY NEWS 

Etsy buyers are receiving emails asking them to rate their recent purchases, as discussed in this Etsy forum thread. The owner of Garden Path Rosaries at Peter's Square Marketplace sent me the screenshot below, which popped up after they clicked the email to confirm they had received the order.

These questions may be connected to details popping in recent reviews, even though the popups and emails say the feedback “won’t be shared with the seller or shown on Etsy.” See this screenshot from Kathie from PillowDetail’s shop:

It’s also possible these review details come from a different test, or even from the act of leaving a review, as some buyers report getting similar options when they leave public reviews. [As is usual with Etsy, they change a lot of things without explaining how any of it works.]

Etsy seems to have deleted most Messages in seller spam folders without any warning, and some shop owners are not happy about it. [The only one I have left is a recent Message that Etsy moved there erroneously.]

Etsy is still promoting its TurboTax discount to Canadian sellers - even though the integration only works in the US. [post by me on LinkedIn]

Canadians no longer need to have a Canada Post Solutions for Small Business account to use Etsy Labels - and the discount for Tracked Packet to the US is very good. [Patreon post by me]

NBC News calls out Etsy for AI crochet patterns that don’t work. While the article blames the images being made by AI, I’ll bet the patterns were too. 

Despite this type of criticism over allowing AI items to be sold on the site, Silverman told a recent investors conference that he is still all in on AI in many forms. “Many sellers on the platform are generating content in collaboration with a machine, Silverman said, and a large amount of new item listings are generated in collaboration with GenAI. But given that Etsy is a platform for handmade goods, the boundary between man-made and machine-made required some clarification. “We had some discussions about, is that handmade or not? Does that belong on Etsy? And we decided, ultimately, that it was—in the same way that electronic dance music, the most popular form of music in the world right now, is collaborations between humans and synthesizers,” said Silverman. “I think this collaboration between humans and machines to generate art is actually going to be the next frontier.” He did admit that the search chatbot tested on the app many months back was poorly received. [The article is really worth reading, in my opinion.]

Gift Mode has now launched worldwide [text with embedded video], and gift teasers will soon include videos from the giver. The teasers have been growing in popularity, with 7% of gift orders in March using the teaser. 

The Marketplace Trends report for spring & summer is out, and apparently there has been a 266% increase in searches for divorce gifts. Even more impressive is a ”2,159% YoY increase in searches on Etsy for lawn games”. Skim through the whole report if you want to know what is trending up. 

Etsy released 2 different “impact goal” posts on Earth Day, which included Reverb and Depop. While you can read a lot more detail in the 2023 Integrated Annual Report [pdf], here are the individual posts: 

Environmental impact goals: reduced carbon emissions, on track to be net zero carbon emissions by 2030. “[S]ellers created 108 million listings with circular attributes on the Etsy, Depop and Reverb marketplaces, including vintage, upcycled, used and secondhand items.” The document mentions increasing Disaster Response Grants (for U.S sellers only) and “open source resource guides that help makers access climate-related disaster information and funding.” 2024 goals are listed. 

Social impact goals: discusses gender, race and disability representation in its workforce, and funding for “creative entrepreneurs from low-income and underserved communities.” 

Related to the environmental impact goals, Etsy published a disaster guide (mostly US-focussed), and put out a (very short) funding guide for US sellers at the same time.  

ECOMMERCE NEWS (minus social media)

Amazon

Amazon added over 5 million sellers since 2018, 2 million of them in the US. That's only about 100,000 more than Etsy in the same time period, comparing 4th quarter 2018 to the end of 2023. 

There are now Amazon shoppable livestreams on Prime Video and Freevee. “Amazon Live’s FAST channel will feature 24/7 programming from popular creators and celebrities, such as reality TV stars …Brands like Tastemade and The Bump will also host streams to sell their products.”

Amazon drone delivery is ending in California, but continues in Texas and will soon start in Arizona. 

Amazon’s first quarter was great, but note that ⅔ of its operating income comes from the cloud services, not ecommerce. 

BigCommerce

BigCommerce announced many new features, including more country localization, new builder options, syncing inventory through Feedonomics, and of course, AI. 

eBay

eBay is now testing an Explore feature to put together a clothing shopping feed with AI. I don’t have this in Canada yet, but it has been spotted in the US and the UK, and the links in the article do work in Canada. I selected a bunch of women’s options and was presented with a feed that had a lot of men’s clothing, so this appears to work about as well as Etsy’s Gift Mode, which Liz Morton compared it to.

eBay’s sales and revenue were both up slightly in the first quarter, while active buyers were down 1% from the year before. 

Shopify

Shopify is reorganizing Support, in part to inject more AI into the process. Employees are worried about possible layoffs. 

Walmart

Cart.com is now helping new sellers start on Walmart Marketplace, and is offering multi-channel syncing for existing businesses as well. 

All Other Marketplaces

Vinted has turned a profit for the first time, riding the trend of interest in secondhand clothing.

Ruby Lane will be increasing its shop fee to $45 from $25 as of June 1, and will be removing the rebate for listing 15 new items monthly. 

Bonanza’s annual Spring sale runs May 8th to 15th. The coupon code sellers must activate is SpringSale2024. 

The EU has forced Shein under the umbrella of the Digital Services Act.”The European Commission specifically noted new requirements for Shein around illegal products on its site. The company will have four months to submit a risk assessment report and will need to introduce mitigation measures against “the listing and sale of counterfeit goods, unsafe products, and items that infringe on intellectual property rights.”

Shipping 

Labels service Shippo is introducing paid tiers for any businesses printing over 30 labels a month through its service. Anyone printing 30-200 labels a month will be charged $19 monthly; under that is free.

Canadian customers - who are already being charged 5 cents USD per label - are also affected, although we get fewer features and carriers [Shippo just confirmed this via support ticket.] Sounds like there are cheaper options for most of us elsewhere now.

[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.