Why we have decided to quit Etsy: Are you thinking about it too?
Updated: Apr 21
It's with a mix of emotions that we are stepping away from Etsy after two years. The platform offered a fantastic launchpad for our products, but after careful consideration and a heap of frustrations, we have decided to pursue a different path for for our store, Closer Lives Emporium.
In this post, we share the many reasons behind our decision and our major concerns with the platform. Things that drove a massive 32% drop in Etsy's stock price in 2023, other sellers leaving in droves, and the tripling of Etsy's seller fees. Not to mention the hugely controversial Etsy reserve fiasco. What did we learn on Etsy, and what exciting things do we see coming next? Read on to find out!
Table of Contents
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First things first, what is Etsy?
Etsy is an online marketplace that caters to those who appreciate unique and handcrafted items. It's a popular destination for people looking to support independent sellers and artists from all over the world. The platform offers a wide range of products, from jewelry and clothing to home decor and art. If you're looking for something special and bespoke, Etsy is a great place to browse.
Imagine Etsy as a giant online version of a craft fair. Here, you'll find a vast selection of handmade and vintage items created by independent sellers. This means you're directly supporting creative individuals who put their heart and soul into their work. So if you're looking for a one-of-a-kind piece or a gift with a personal touch, Etsy is definitely worth checking out.
⪢ Drop Shipping and Print-on-Demand
In addition to handcrafted items, Etsy is also a platform that is an outlet for the masses of drop-shippers and print-on-demand companies who have exploded onto the scene in recent years. Drop-shipping and print on demand (POD) companies like Printify are fulfillment models that allow you to sell products online without holding any inventory. With drop-shipping, you partner with a supplier who stores and ships products directly to your customers after you make a sale.
POD takes it a step further - you design custom products (like t-shirts or mugs) and the POD provider prints them on demand only when someone orders, handling the fulfillment for you. Both models free you up from managing stock and allow you to test out a wider range of products without upfront investment.
How is Etsy performing?
In Q4 2023, Etsy reached 7.9 million active sellers, with a year-over-year growth of 3.8%.
One reason why selling on Etsy can be profitable is the growing number of buyers on the platform. According to Etsy, the number of active buyers went up by 3.4% to 97.3 million. This shows that Etsy is becoming a bigger market where sellers can make good money.
In 2023, Etsy’s consolidated Gross Merchandise Sales (GMS) decreased slightly to $13.16 billion from $13.32 billion in 2022, with a 1.2% decrease.
However, annual consolidated revenue notably increased, reaching $2.75 billion, marking a 7.1% YoY increase from $2.57 billion in 2022. Particularly noteworthy is the fourth quarter performance, where revenue marks a new record of $842.2 million, a 4.3% increase compared to Q4 2022, highlighting Etsy’s ongoing strength and resilience.
In February 2024, Etsy received 474.1 million visits, according to the web traffic collected by Similarweb. This number has made Etsy the 4th player in the Marketplace and Shopping category, only after Amazon, eBay, and Walmart.
Despite this 'increase', 2023 was actually not such a good year for the platform when you really drill down into the numbers. While its revenue seems to have grown, actual sales on the Etsy have stalled. On Etsy, the money from sales goes directly to the millions of sellers on the platform, not Etsy itself. Etsy makes its money by charging sellers fees for various services they use to list and sell their products.
Here's the interesting part: Even though Etsy's own revenue has increased from a very aggressive seller fee strategy to counter losses, the total amount of sales on the platform (called Gross Merchandise Sales or GMS) has dipped. This means sellers are making a less money overall. This trend worried investors in 2023, and it's why Etsy took action. In December of that year, they announced they were laying off 11% of their staff to focus on initiatives that will help sellers grow their sales on the platform. Initiatives which we will look at throughout this post. Funnily enough, they do not seem to be helping one bit.
Why we choose Etsy for Closer Lives Emporium
Fresh into our full-time travel adventure and with an eye on not depleting our savings too much, we started looking around for some serious ways to earn on the go. Etsy was by no means our only option, as we were already teaching English online when we decided to give it a try. That being said, we liked the idea of earning money without having to do much; it kind of seemed to good to be true!
We were inspired by many hours of researching YouTubers and successful entrepreneurs who were sharing their Etsy success stories. Some were demonstrating hundreds of thousands of sales on POD items, in particular tees. With plenty of creative ideas as content creators on social media, we sensed an opportunity for us too. If they could do it, why couldn't we?
At the time, we were in the midst of establishing this website, which was born from Closer Lives Poetry on Instagram, a community page, which Jenn had founded. closerlives.com was actually intended to be a Creator Academy initially, to expand the concept beyond the confines of IG at the time.
With very little experience in website building, establishing our POD range on Closer Lives did not seem like the best idea, given the fact it would take some time to garner domain authority, and we wanted to start earning straight away. So familiar with the brand and prowess of Etsy, it seemed like the perfect spot to build. And so, Closer Lives Emporium was born.
The journey to 300 products
We started creating our range in Merida, Mexico (of all places). We had a super cute Airbnb in the middle of a quiet urban sector of the city. It was a good spot to relax and get creative, and once we got started, our range just exploded!
There are a few platforms you can try for POD services, the main two being printiful.com and printify.com. We set up an account with both, but opted to use Printify more as it felt a little more user friendly, and it synchronised with Etsy pretty seamlessly. For those who may not know, POD companies usually have tie ups with the big players like Etsy and Shopify, whereby products you create upload directly to the respective selling platform. Any time a product sells, the order automatically generates in the POD platform, and aside from some customer service should you so choose, the process is entirely automated from point of order to the customer receiving the goods.
There are some nuances and processes you can put in place, like manually authorising orders, sending thank you emails and such, but even postal tracking is automated so you really don't have to. All this takes a little bit of work to set up and get right, but once you have it done, you can sit back, and earn money in your sleep as they say.
We kind of lost track of how many items we were creating at one point, if anything we were just having fun with it. We quickly made it to over 100 products, and before we knew it, we hit over 300 across 17 categories. Woah!!!
Understanding the SEO > product descriptions, alt tags, size charts etc. Mistakes spell a time-consuming disaster!
One of the biggest challenges was actually marketing the products, which goes far beyond just making it and sticking it on your Etsy storefront. There are things like flat-lays, descriptions, alt tags, getting the title right, terms and conditions, refund policies, privacy policies, size charts, fulfillment times, actual delivery times etc. Say what now? We thought this was going to be easy! Such things are not exactly talked about when people share their glossy charts advertising thousands of sales.
This was exactly where the time starts to become a factor. Creating a ton of designs, popping them onto a product template and pressing 'publish' is honestly the easy part. Getting these items on the virtual shelf properly is another matter entirely. Especially if you don't know what your doing, and make some critical mistakes along the way.
Let's give you an example. Alt tags. Yes alt tags. You may have heard of them, and in the past year or so they have grown into the conversation so much so that you can even see them given as an option for you in your Instagram posts. An alt tag is a hidden description for an image on a webpage, helping visually impaired people understand the image. It also provides backup text if the image fails to load, but perhaps most crucially, improves search engine ranking. And search engine ranking is a biggie. Like the biggest, actually.
Funnily enough, alt tags weren't actually a thing on Etsy. In fact when we started in 2021, they weren't prevalent at all. So we did not make them. Just as we did not make size chart thumbs for our items, or fulfillment information graphics. A BIG mistake we had no clue we were making.
Let us tell you, when you have 300 items, and realise you need to update them all with critical things like size chart graphics, that is hours of work. Then Etsy comes along and hits you with alt tags. Then you realise you aren't making sales potentially because of these issues. Then the panic sets in when you realise on average each of your items has at least 10 photos, which means potentially 3000 alt tags. Say what now?
So hopefully we are able to paint the picture now! After all of our initial hype of getting things onto Etsy, we realised our shop was always going to struggle without some serious time being put into the background. SEO-effective product titles and descriptions was not something we did prior to uploading the item from Printify. They were just generic. We had to design a whole bunch of things like our size charts and product flat-lays. Then upload those and figure out how the hell to write a good alt tag, let alone 3000 of them.
Weeks and months passed before we were finally able to get these kind of things done. Let us tell you, those weeks and months are measured in actual time spent, or at least it certainly feels like it looking back.
Would you be interested in some how-to guides in the future for things like flat-lays, alt tags and product info best practices?
Yes please 👍
No thanks 👎
The importance of Branding
So things were starting to move, and after the rough months at the beginning, we were starting to learn a lot, and were making some serious progress on getting our listings up to scratch. We could see the difference it was making too; picking up some sales here or there, and getting excited about the future prospects. Our product wall was looking better by the day, and our products themselves were looking professional and organised.
One of the key elements to this was our branding, something we took great care to curate right from the off. Again we were very in-experienced with this kind of thing, and quickly found out why people pay big-bucks for logo designers and high performance graphics. Just so you know, Canva is great and all, but it is very limiting when it comes to logos. We never did end up paying big bucks, but then again the offset against changing our logo several times, and having issues with pixelation and poor quality, perhaps we should have done in hindsight.
The crux of the branding comes in with all of the 'peripheral' stuff that the big drop-shippers do not tell you about. Those fulfillment charts and delivery info charts are very important. A brand is more than just a flashy logo; it is in the details, the way you market your products, the follow up emails, the terms and conditions. These things can make-or-break a business and are often sidelined in the short-term pursuit of mega bucks. Fortunately with our business experience we did particularly well in this area, but again, that dreaded time count was dding up. Yet more hours, days and weeks to get it spot on!
The Etsy Ads disaster
So at the point in our journey where we finally felt like our store was how we wanted it, in terms of all of the above, we were still struggling to hit consistent sales. We had got over the 20 mark, which had felt like quite a lot of work for not really that much. With all of the effort we had put in to getting the descriptions, titles and alt tags right, we were hoping for far more return than that.
With our reach pretty low, and our confidence in our products pretty high, we came to the conclusion that we should invest some cash into the store. Now sure, time is money, so the months of work it had taken to get to this point should always be considered as investment, but we are talking cold hard bucks in the system. We were averaging about ten visitors a day to our store, and simple logic told us that this was never going to be enough to take off. Besides, Etsy are obsessed with pushing its advertising-to-sales potential at you, so we decided to bite. And wait for the sales to roll in.
This is where our frustration with the platform really started to kick in. Now you might think that paying some money for a bigger slice of the reach pie might automatically boost your profits. But with Etsy, this is a big no no.
⪢ Etsy Ads offers two ways to promote your products to a wider audience on Etsy and beyond:
⪢ Onsite Ads: These work on a cost-per-click (CPC) basis. You set a daily budget and Etsy will display your ads in various locations throughout the Etsy platform, like search results or product pages. You only pay when someone clicks on your ad, not when they just see it.
⪢ Offsite Ads: This is a commission-based advertising program. Etsy automatically enrolls all sellers and displays your product listings on other platforms like Google, Pinterest, or Instagram. You only pay a commission (12-15% of the sale price) if someone clicks on your ad and then makes a purchase within 30 days.
Funnily enough, it seemed like every ad-based sale we were making was coming from 'offsite ads'. So we were losing 12-15% every time. Not to mention the taxes on top (which we will get into later).
Now the average margin on your items, especially if you want to remain competitive and soak up the delivery charge, might only be 20%. Take away Etsy ad fees, taxes, and Etsy listing fees, and yes folks, you are losing money. Sadly for us, at least 80% of our sales were barely breaking even. Before we even factored the time spent on creating the damn things. Etsy's cut was easily approaching 25-30% with offsite ads factored in, and without them, the chances of selling though onsite ads was basically zero. We quickly realised that Etsy was starting to demonstrate itself as a little bit of a scam. With the platform raking in billions, where on earth was the support for the sellers that make it? 25% ? Absolutely madness.
⪢ Was there even a good reach?
In all fairness, the reach on Etsy ads did seem okay. We saw an uptick of around 100 visitors a day to our store at one point, although that cost us a cool $130 in a month before we cut it off. It just was not worth it with the offset against sales barely breaking even. A shortage of actual buyers on the platform? Or were our products just not good enough? Definitely an argument for the later, although we had sold at least one across 30% of our range. Deep down we just knew the exposure was not good enough.
Etsy's direction... too concerned with updates and apps
With the amount of money Etsy was charging us for listings and ads, we were wondering if there was going to be some sort of major investment in the system to boost reach or something. Yes we know that is wishful thinking, but at this point, we had put way to much work in to simply give up. We turned the ads on and then off, then on again, desperately hoping they would spur the organic reach we craved. A few sales trickled in, we lost money, and we eventually decided to keep them off.
In 2022, it felt like the money was going into constant updates and tweaks. A whole new app to replace one that was not broken, a slew of changes to product features and parameters (which meant yet another 300 changes), and then one of the most frustrating of all, an enforced delivery lead-time update which led to another 300 changes. There were plenty of others besides, and we seemed to be spending far more time catering to the platform than sending out 'thank you for your custom' emails. Sales were few and far between, but the time demanded was off the charts.
In the past two years (roughly April 2022 - April 2024), Etsy has implemented several changes to improve the platform for both sellers and buyers. There have been adjustments to fee structures, though as ever with Etsy the specifics are ridiculously complex.
After major seller backlash campaigns in the past few years, Etsy has made efforts to improve search algorithms and introduce new features to help buyers discover unique products. This involved better filtering options or promoting (apparently) high-quality listings. There have also been updates to the offsite ads program, such as offering sellers more control over their ad placements and budgets. Honestly, it is all company bluster to keep us going and paying our fees. Sadly hardly any of it has worked.
Crazy Etsy charges
The crazy Etsy charges. The crazy Etsy statements. It really is one of the worst parts of the platform. Even to this day, we still cannot make sense of the chaos. Etsy provides a monthly statement, and on it is a barrage of costs that no amount of terms and conditions reading can understand!
For example, we sold a pair of green sneakers and a pair of brown sneakers. 2 items, that's it, that's all. On Etsy's statement - TWENTY separate charges. Yes 20! Let's give you more of an idea:
The sale of the two pairs of sneakers came to $74.08 (CAD).
Charges applied by Etsy (we have added both charges together, but they are all separately placed on your statement, for each item, just to confuse you):
● Bill for click-throughs to your shop: $2.65
● VAT on Etsy Ads: $0.53
● Listing Fee: $0.27
● VAT auto-renew sold: $0.10
● Processing Fee: $3.21
● VAT on Processing Fee: $1.28
● Sales tax paid by buyer: $9.70
● Transaction Fee: $9.24
● Regulatory Operating Fee: $0.36
● VAT on Transaction: $1.84
TOTAL: $29.18
So given that our profit margin on both the pairs of sneakers is $36, that leaves us with $6. Raising prices is not an option as we are trying to stay competitive with others in the market... given all of the work involved in launching the product, $6 is not a lot. And the more money thrown at advertising for no returns equals a loss sadly.
⪢ Oh, and the listing fees...
We were aware of the listing fees prior to joining, however it is another expense that can seem to sneak up on you without you realising. Every item comes with an initial listing fee, which renews every 4 months, and also is charged on each sale. While 27 cents might not seem a lot, when you factor in 300 products, it really starts to add up and eat into the margins.
Time vs effort - is it worth it?
Now none of this is to say all is completely at a loss. From what we understand, for drop-shippers, Etsy is all about volume. If you can sell a thousand sneakers, that becomes $6000 profit. But the offshoot is that you simply cannot reach volume without Etsy ads, and Etsy ads are totally unsustainable and unprofitable. It is all geared towards raking in money for the platform, leaving the sellers with nothing but years of hard work with little to show for it.
It really is not worth it in our opinion. Maybe a few years ago in the early days of Etsy it was, but in this day and age it is a false economy. It all feels a little like working for a public company where you bust a gut for minimum wage while the fat cats at the top flood their paychecks with millions of dollars. And you can bet they aren't working nearly as hard. Etsy works on the same principal and we decided we were no longer going to fall for it!
Competition – how tough is it?
The competition on Etsy can be quite tough as we have already mentioned, but it also depends on several factors:
⪢ Saturation: Certain niches on Etsy (like printed tees) are highly saturated, meaning there are many sellers offering similar products. This can make it challenging for new shops to stand out, especially for popular items like clothing or travel accessories (like ours).
⪢ Search Ranking: Etsy's search algorithm plays a big role in determining which shops appear first in search results. Understanding SEO principles and optimizing your listings with relevant keywords is crucial for getting your products seen according to Etsy, but by no means guaranteed. In our experience, the big accounts gobble up about 90%, leaving the remaining 10% feeding off of the scraps. Ok, we cannot back up those numbers, but it certainly felt like that in the 2 years we went at it.
⪢ Product Differentiation: What makes your products unique? Do you offer a special design element, use high-quality materials, or cater to a specific niche within a broader category? Standing out from the crowd is essential for attracting customers. That is what the Etsy 'experts' tell you anyway. Thumbnails are crucial, as are titles, but that takes time and money (Canva pro or flat-lay app subscriptions for example). All while eating into the little-to-no profit margins you have.
⪢ Marketing & Branding: Successful Etsy shops often invest in marketing their products beyond just the Etsy platform. This could involve social media promotion, influencer partnerships, or running targeted ads. Building a strong brand identity also helps you resonate with potential customers. Again this all costs a lot of time and money, and can be very draining. It is a hard slog, with absolutely no guarantees. Especially when you are fighting against millions of others.
The infamous Etsy 'reserve' debacle
The Etsy "reserve" debacle refers to a policy change implemented in 2021 that caused significant frustration among many sellers. Here's a breakdown of what happened:
⪢ The Policy: Etsy introduced a system where they could withhold a portion (usually 75%, yes 75%!) of seller's funds in a reserve account. This meant sellers wouldn't have immediate access to the full amount from their sales.
⪢ Reasons for Reserve: The purpose, according to Etsy, was to protect the platform and buyers from potential fraud. They would hold the reserve until specific criteria were met, such as the order being shipped with tracking or a certain timeframe passing (typically 45 days).
⪢ Sellers' Frustration: Several aspects of the policy caused major problems for sellers, with the lack of transparency quite shocking. Many sellers felt Etsy wasn't clear about why their funds were being placed in reserve, making it difficult to address the issue.
⪢ Cash Flow Impact: Holding a significant portion of funds could strain a seller's cash flow, especially for those who rely on Etsy income to purchase materials or cover other business expenses.
⪢ Impact on New Shops: New shops (like us at the time), which are more susceptible to being flagged for reserve due to limited sales history, could find it challenging to gain momentum if their earnings are restricted.
⪢ Aftermath: The policy received significant pushback from the seller community, with many voicing their concerns online and through petitions and boycotts. While Etsy has made adjustments to the policy since its initial implementation, the "reserve" debacle remains a point of contention for many sellers.
This shambolic policy was not quite the final straw when it was first implemented, but coupled with the insane charges, constant changes to the platform, the awful ad program and terrible reach, we were really getting there.
Poor store customization
Another major source of frustration for us came with the lack of customization for our storefront, which honestly is pretty poor given the amount of changes Etsy loves to implement practically anywhere else but. For example, items sold always go to no 1 spot in the feed, which means if you have a layout aesthetic you are constantly re-organizing it. And the re-organisation process absolutely sucks and is very time consuming.
The store banner is a nightmare, has poor rendering and is a pain to size correctly. Yu can get additional layout options but of course, you must pay monthly for the privilege. The product layouts cannot be customised and it is very difficult to showcase your brand beyond the small profile picture. These are just a few frustrations, there are plenty more plastered all over the internet. Very disappointing from Etsy given how much money it is extracting from its sellers.
The turning point: time to QUIT ETSY and move on to OUR OWN PLATFORM closerlives.com
So what was the straw that broke the camels back? Well in all honesty, it was our own website, THIS website, which did it.
Up until mid 2023, our website had taken a bit of a back seat to Etsy, our travels, teaching English online, and YouTube. We had started it as a creator academy, abandoned that, and then started to blog a little. But with limited time and an uncertainty as to how to monetize, it just was not a priority.
After experiencing a dramatic rise and surpassing monetization on YouTube while in Jakarta in 2023, we realised that our website was an opportunity we could no longer avoid. We had blogged a little up until that point, but the design and usability was poor, and it was not bringing in any cash. We were nervous about throwing time at it, as we were concerned that it would be another Etsy situation. A whole lot of work for no payout.
Well, we were very happy to be proved wrong on that front! After some serious research, again that good old time, and some big blogs, we completely overhauled Closer Lives. It has been 6 months of major reconstruction and we are now seeing tangible results; increased ad revenues, over ten thousand visitors a month and even store sales. Our OWN brand, our OWN money, and a GENUINE COMMUNITY that we could never replicate on Etsy. The decision was made. Time to go it alone!
The benefits of building your own site
Building your own website and online store offers several advantages compared to selling on platforms like Etsy; here are but just a few reasons, and things to consider:
⪢ Greater Control & Branding: You have complete control over the design, layout, and branding of your online store. This allows you to create a unique shopping experience that reflects your brand identity and resonates with your target audience. On Etsy, your shop operates within a larger platform with a pre-determined layout and branding elements.
⪢ Lower Fees: While website building and hosting come with costs, you typically avoid the transaction fees and listing fees associated with marketplaces like Etsy. In the long run, this can lead to significant savings, especially for businesses with high sales volume.
⪢ Customer Data Ownership: When you run your own store, you collect customer data directly, allowing you to build targeted email marketing campaigns and gain valuable insights into your customer base. On Etsy, customer data belongs to the platform, limiting your marketing options.
⪢ Flexibility and Customization: With your own website, you have the freedom to customize the functionality of your online store. This could involve adding features like loyalty programs, subscription boxes, or personalized product recommendations, which might not be readily available on marketplaces.
⪢ Scalability: As your business grows, your website can easily scale to accommodate increased traffic and product offerings. Scaling on marketplaces might involve additional fees or limitations depending on the platform's structure.
⪢ Here's a caveat though: Building and maintaining your own website requires more effort and technical expertise compared to using a pre-built platform like Etsy. You'll need to consider factors like web hosting, domain name registration, website design, security measures, and ongoing maintenance. However, the long-term benefits of control, cost-efficiency, and brand ownership can be significant for businesses looking to establish a strong online presence!
The future of Closer Lives Emporium - what have we learnt, and where do we go from here?
This whole experience has been a massive learning curve for us, and as ever hindsight will always demonstrate the could have's, should not's and what could-have-been's. If we could go back and do it all over again, would we? To be honest, as tempting as that might be, we wouldn't. We learnt far too much through our own mistakes, and we appreciate those as much as we do our successes. We did sell on Etsy, we did make a little bit of cash and we did come out of it with almost 300 products that are still very much alive and well right here on our own site.
The learning curve has been steep and challenging, but has not deterred us from making a success of Closer Lives Emporium. That being said, it has also pushed us to developing our own site as a whole, which in turn led to us pursuing one of our biggest passions - writing and blogging! Would that have still been a reality if we were pushing our Etsy store? I guess we will never know, But one thing is for sure, we are having the time of our lives developing this blog, and happiness genuinely is the key to success. The energy this blog continues to give us is the cornerstone of Closer Lives. That all being said, our store is very much operational on here to and you are welcome to take a look!
We hope this post has helped you in some way, and if you have any questions and want to pick our brains at all, feel free to get in touch! Drop a comment or pop us an email; we are always on hand and our advice is free. Helping and making a difference: that to us is a far better use of our time!
Are you considering leaving Etsy?
Yes, I've had enough too
No way
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