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TechCrunch published a lengthy article on September 11 by Steven Carpenter, TC Teardown: Etsy, It’s Crafty, an article worth reading just for what it leaves out.
The author provides a rather shallow view of the actual Etsy fee structure here:Etsy makes money in two ways: it charges sellers $0.20 to list a product for 4 months, regardless of the price of the item, and then it receives a flat 3.5% commission for each completed transaction.
Carpenter fails to mention that Etsy also makes a huge chunk of change from sellers who constantly renew thousands of items per day, which goes on at such a high volume that it could actually equal the totals spent on new listings.
We don’t know the actual dollar totals on relisting fees paid because Etsy keeps all its real number under wraps.
What we do know is that the original fee structure, which is based on 3 profit streams (listing, renewing, and sales commissions) that underlies the Etsy of today compared to the Etsy of 2006 no longer support the argument that "renewing is worth it" and results in actual sales on a site with 6.7 million items.
Renewal fees and the aggressive push to relist is based on a site format that LISTS BY MOST RECENT DATE.
The renewing deal, along with a site structure that is designed to grow by volume is based entirely on upping the numbers: more new sellers list more new items while current sellers list new items and relist items in a never-ending cycle that costs sellers big gobs of dough.
If relisting/renewing (a significant Etsy revenue stream) gets you to the top of the heap on a site with 6.7 million listings with thousands of sellers relisting hundreds of thousands of items per day and week, how much time to you think your item is going to stay at the top of that heap (the heap that sellers use to get traffic)? Less than a second.
The REAL question is, does relisting have the same meaning, significance or value to sellers that it did in 2006?
Be sure to stop by TC and let them know what you think about Etsy's revenue streams.
Wednesday, September 15, 2010
Making Money the Etsy Way - The Untold Story About Renewing
Posted by The Funny One at 4:00 PM
Tagged: Etsy, tech crunch
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56 Comments:
That is a brilliant post. I was lead to believe, by other sellers even, that relisting was the way to get noticed. I think I might just stop that practice today. Thanks.
I had never relisted anything on etsy. It definitely seemed like a money grab to me.
I closed up my Etsy shop for this very reason- paying Etsy to get a better spot in searches- it was a joke and I feel like a fool because I initially fell for it!
I do miss it though, when it was good it was very good!!! But now its bad and its very very bad!!
Thanks for the interesting article.
I stopped playing the relisting game months before I closed my shop there. Maybe this post will get some folks to open their eyes and realize that etsy is out for etsy and only etsy.
I take it you are referring to "renewing" vs "relisting"?
Renewing is a total waste of money for the seller. At one time years ago sellers could get good results for renewing an item, but those days are long gone.
Renewing got you to the Front Page under Recently Listed and those 15 seconds of FP exposure could bring in anywhere from 25-30 views. Today since only a chosen few make it to the Recently Listed, sellers are lucky if they get two views within the first 12 hours of renewing a listing.
But there are still so many believers on Etsy that "renewing" is the answer, it is evident with all the threads that are started.
So sad.
Goodbye, Etsy. You don't have Bijoutiful to push around anymore.
Off topic but I wanted to mention that tonight is a real clusterfuck on Etsy. If you're at all inclined, it won't be difficult to see what's going on with a quick visit to the forum.
The site has been riddled with uh-oh's and oopsies like crazy this week. Last night, the whole site went out. Tonight (and for some part of the day) people can't list or complete sales transactions.
The real kicker? Admin posts in announcements about 45 minutes ago, that they're rolling out the new check out system next week with the tax coding supposedly done properly.
Hey guys! Ya think it might have been wise to hold off on that announcement since your customers can't even do BASIC THINGS LIKE LIST right now? The only way I can forgive this is if it was a post that was somehow scheduled ahead of time and just went live. We have no way of knowing, but I'm not giving any benefit of the doubt here. I do when it's deserved. They don't deserve it. 60 engineers and the site is a piece of shit. And ONE...count them...ONE admin has bothered to address everyone's concerns in the forum tonight. Unforgiveable.
People are pissed, the site is a veritable, unusable mess, and of course, here come the holidays.
Sorry this was off topic but I had to vent.
And don't forget this little gem:
"If you look at Etsy’s online marketing efforts, it spends next to nothing on customer acquisition."
And why should they when the real money is coming from renewing, renewing, renewing???
Agreed, renewing gets you nothing but a higher monthly bill...no views per day plus a renewal that gives you no more views per day equals... BUT wait, yesterday, daniellxo had a helpful etsy success post explaining that using all 14 tags will help your items get found. Really? That's Freaking Genius! Now I know how to be an etsy success!
Why hop on to Artfire's special $5.95 per month deal when etsy can ensure you'll never get your items seen and won't sell a thing? Duh!
I wouldn't mind paying my money to Etsy if I had any sense that they would use it to run a reasonably decent venue for me.
WTF is up with the new Handmade Code Challenge in the Dorque?
They've got 60 programmers fucking up dozens of updates and regularly crashing the site, and they are offering up a $5000 prize for:
"the best applications built with v2 of the Etsy API in the areas of Buyer Tools, Seller Tools and Mobile! It’s a win-win — Etsy members get access to helpful new tools and engineers get fame and fortune for their inventiveness."
What the hell are those 60 programmers doing, if they have to solicit freelancers to code seller & buyer tools?
And do you really think those idiots who can't engineer the site will be able to integrate freelance coding without bugs & crashes? They haven't even figured out how to integrate EtsyHacks yet.
Yeah, Etsy, tell everyone to renew multiple items daily to show up in search, and spend those 2,400 programmer-hours per week making videos and tweaking the graphics.
Then give freelancers a prize for doing your own job. Assholes.
Yea Artfire's deal is win-win deal. If they get 20,000 sellers, everyone who signs up gets 5.95/month. Even if you sign up as a basic seller, they won't upgrade you until the number is reached, so no 15.95 fees in the interim
Thanks for the clarification NoMoreRenewing, you are right. This renewing-relisting gimmick was a goner 4 years ago.
It underlines why Etsy-by-volume-formula is so damaging to handmade as a valuable endeavor and product. It also explains why Etsy lets resellers run amok because it's all about volume, not about quality or quality control. And certainly not about reputation.
125 people in Brooklyn are making a lotta money off of a pedestrian, boring, and oh so last decade big-box retail formula that has nothing to do with the product, but has everything to do with finding the lowest possible selling price at the highest volume.
Etsy jumped on their "success" by taking an extremely limited view to make their "jobs" as easy as possible.
More sellers, more listings, take 40% of your employees and let them plug the 50-100 sellers who sell by volume, construct a myth telling people what to buy and watch those paychecks pile up in their bank accounts.
More sellers, more listings, more renewals, more rip-off showcase fees, more bullshit and that's the total sum of their "success."
It doesn't take a lot of effort.
However, this limited approach is starting to show at the seams; the hiccups today are just a warning of what's to come.
Volume without scalability has its limits, and Etsy has no clue they already went over the edge, nor do they care.
Volume at Etsy is one big steamroller that has already put would-be sellers at a huge disadvantage, decimated pricing, and all but destroyed the reputation of the handmade product.
Do you want to hang around through December 24 and find out (again) that most sellers NEVER sell anything on Etsy?
The worst thing about Etsy is that is has this insidious effect on sellers who think they are doing something wrong when they don't sell on Etsy -------- when it's Etsy (& it's out-moded structure)that's preventing them from selling.
Etsy set it up that way. A dime a dozen sums it up perfectly.
re: WTF is up with the new Handmade Code Challenge in the Dorque?
They are doing this to drum up interest in their API. Christ, they have hired FOUR apparently full time people to work on it, so they're probably hoping a few people other than craftopolis and craftcult and couple of incompetent hobbyists will make something, I guess.
This isn't the way to do it, though. There are some pretty important features missing from what I understand and maybe they could pay one of the programmers overtime to put them in instead of giving away money.
this isn't about freelancing, really - you PAY freelancers. this is more about getting VOLUNTEERS to do work for etsy.
What they really need is a way for people to make money from third party programs. not a one time contest - an affiliate program or an app store.
great time to do it, too etsy - you know people have tons of free time right before the holidays and we're all eager to donate months of work to the community in hopes of winning a contest that might pay something like an average wage for how long it takes to make a good program.
NoMoreRenewing - the "relist" switch with "renew" was my fault, Funny trusted me to check it before it went live and I missed the difference. They are technically different things, I agree, so I made a few corrections in the article.
Either way though - is relisting or renewing or even listing worth it anymore - it's 20 cents regardless
Love the Etsy thread on AF's deal http://www.etsy.com/forums_thread.php?thread_id=6627661&page=1 right now 72 pages and still going.
The thread was started under Business, (I think) and now it's in Promos. That means that they've seen it, and the only reason why it's still open is they want to keep an eye on it, and they would prefer ONE easily buried thread instead of having to lock the 10 that would pop up if they locked this one.
Oh yeah, Etsy wants to keep an eye on AF's $5.95 deal because they so missed the opportunity to convert Etsy to a subscription model when they had the chance 4 yrs ago. They're stuck with their high-volume (aka Walmart) model because they were too lazy to figure out a DIFFERENT way to do ecommerce for the handmade product.
Handmade doesn't fit the big box model, but Etsy forced it into one by pushing a simple myth based on their handpicked, heavily editorialized faves (plus volume). Produce what they tell you to (clearly not handmade - that's produce-to-order) and price it below cost (producing like products & product-types increases competetition & forces prices downwards rapidly when you rely on volume).
AF actually provides seller support services that more than justify the $5.95 deal; Etsy provides no similar value to 99.9% of its sellers.
Etsy won't be able to stop the exodus or stop the increase in seller disastisfaction which will eventually impact their ability to attract new sellers.
And that, in a nutshell, is their "by-volume" mistake. Etsy left out the other half of the equation and didn't take care of their sellers when they had the chance. The damage is done, and their negative attitudes towards sellers has only gotten worse.
It's a collapse waiting to happen.
NO no no - this whole renewing thing really bothers me. I don't renew unless something is ready to expire and it hasn't sold. There is no benefit to the seller in renewing and I don't get why so many folks are posting in their "I am successful and this is how I did it" forum entries that renewing is a key aspect of that. For goodness sakes, if you sell on etsy take the money that you would use for renewing and buy an ad off site or even buy yourself a several cups of coffee - renewing really does nothing - in a crowded category such as jewelry you get buried in a matter of seconds. It is pointless, and it really makes me frustrated to see people touting this as a business strategy. It only benefits etsy and it's so easy to forget how much you've done it until you get your monthly bill. I liken it to dumping quarters in a slot machine - a basic waste of money.
Interesting. I just posted a little Etsy business analysis that talks about just this topic over at Creative Grease: http://hotgluemedia.com/blog/e-commerce-fail-reloaded/
Remember Relevancy??? A couple months ago???
Etsy tried to change the search structure to something more viable to sellers - something based on relevancy rather than most recently listed (which is what every other site uses. . .). Yes, it had kinks to work out (like the tag and keyword abuse to get to the top, also a problem everywhere), but they only tested it for a couple days and everyone made such a huge stink about it not being fair because they could no longer pay to get to the top.
I do believe that at some point Etsy will implode. I am not sure in what manner but I think it will. There are just too many problems. It has become just too big. How long can people keep throwing money down the drain by re-listing/renewing all day long?
I'm letting items in both my shops expire one by one. I've had it. Not one more pair of thin dimes from me, Etsy. Gonna go look elsewhere for venues.
I've been saying this for years.
The whole "relist" structure is based on the fact that the site lists "newly listed" items as default in search.
If that were to change to "most relevant" (a shocking concept), Etsy would lose its biggest revenue stream.
(terminology fail - I meant RENEWING, not relisting).
I'm just sick of renewing. I was told that's the only way to be seen. Everytime I renew a hat or scarf I'm buried in minutes by cheap imports.
Maybe Xenotees or Polestar or ThePeachTree can tell us who they pay to get on the front page every single day. 200-300 times so far this year. Each of them. Now, that I'd pay for.
Speaking of Polestar, they're on the front page right as I am typing this.
I never found re-listing to be particularly helpful, especially in the jewelry pages, since the stuff just gets buried in about four nanoseconds under the mountains of other items that are being frantically relisted by other sellers who are trying to make a sale.
If you want to get your stuff noticed, you need to post the links to your Etsy shop on other places online: Facebook, Twitter. And guess what - those are FREE!
The year is only 3/4 gone. Is that true? Sellers get to be on the front page every day? Every fucking day?
I just checked craft cult. It IS true.
I thought etsy had a new CEO. I thought things were going to change.
The only thing I saw was MaryMary came to one of the forums and told another lie.
HAHAHAHAHA!
Someone is just messing with us today, they must be. Freaking Polestar is on the front page again right now, this time with a pair of earrings.
And I just turned on my computer and polestar is on the front page again.
It's like they use her shop to thumb their nose at us.
People said...
Remember Relevancy??? A couple months ago???
that one amazed me- sellers whining that they spent 200/month to be on top and now they weren't. What is wrong with seeing items that were listed a week ago if they are more relevant.
I'd rather find what I'm looking for than spend 200/month renewing
Renewals are NOT the majority of Etsy's revenue at all. Initial listings fees and commissions are way more. And showcases. Renewals were like 10-15%, in 2007-2008 anyway.
If we knew how much Etsy actually makes from renewals, 15% is still one hell of a chunk of monthy income for a "tool" that has no value to sellers whatsoever.
Renewal profits (which Etsy found so lucrative for their bottom line)on a by-volume site structure with 6.7 million listings ensures that the original premise behind most-recently listed does not work. Etsy pushes it as a seller-promotion tool when it is not.
It's the same scam that Showcase spots are since Etsy took over 100%control of all site promotions 2.5 years ago. Etsy negated their value when they decided to dictate what gets promoted and how often (and moved Showcases to low-value site real estate locations that shoppers can't find).
Etsy actually screwed itself, then talked a tanker-load of gullible sellers into forking over money for nothing. Pure profit, no Etsy effort involved!
There is actually little seller-value left on Etsy. What shocks me is that would-be-sellers aren't pitching a fit about Etsy's unfair business practices that make it impossible for most sellers to sell.
There's a new fred Wilson post via Twitter rationalising the why's of pampering the staff.
http://www.avc.com/a_vc/2010/09/the-office-matters.html
for the hell of it...thanks for posting that link. It simply reinforces my opinion of the man being a complete blow-hard, as my Mother used to say.
Trying to justify the large number of engineers, and "highly qualified" (sic) employees that do a shitty job of running things....give me a freekin' break.
Plus they get catered meals 3 times a week? Anyone know of any other companies who do that for their employees? Especially those who don't seem to be able to do their jobs efficiently and effectively?
Guess I was born in the wrong generation....no, I'm glad I'm as old as I am, so that I can see through all the rainbows and unicorns to the rotten underbelly of the beast called Etsy.
There, I've said it an I'm glad!
I stopped renewing years ago because i saw through their shit. Its only good if you want to stay on "listing roll," if you will, and keep current if you need a day off or etc.
So Etsy has reached the point after five years where they can afford to spend money on extras like lunches, ductwork cozies and phone booths. That must mean all the issues are taken care of. Check out is working, search is a go and they have full on customer service. Wow, I must have missed all that.
I totally can't believe I am finally going to post a comment here. I have been lurking and reading for months now, but this topic is one I feel compelled to speak up on. The only way I ever get any views is by renewing. If I don't renew any items on a given day, then I check GA the next day, I'd have maybe 5 total views to my entire shop. If I renew 2 or 3 things once or twice during the day, then I'm likely to have 50+ views. There has to be something said for that. I have yet to calculate if I'm losing money yet tho, b/c renewing at a cost of $1.00 a day to sell an item that is $12, plus saying the 3.5% commission and the paypal fees. . .I think I must be still in the red. And for me, a front page. . .nuh,uh! Thanks for listening
"You may laugh and say this stuff is frivilous (sp!) and a waste of time. But I can assure you that is not true. Etsy is a recruiting machine. They are getting the best talent in NYC to come to their company now. It is not just the vibe for sure. They have big and interesting engineering challenges. They are doing cutting edge things in marketing and customer service."
So that's what they told you, huh? Some shitty reporting. He can't spell, either. "Cutting edge, best talent" my ass.
Fed Up With Fools said...
Plus they get catered meals 3 times a week? Anyone know of any other companies who do that for their employees? Especially those who don't seem to be able to do their jobs efficiently and effectively?
---------
Not since I worked in Silicon Valley during the first boom.
And all of the companies that gave us free lunches several times a week?
All bankrupt. No kidding.
"They are getting the best talent in NYC to come to their company now."
Wow.. If this really is the best, I'm very worried for you, NYC!
Quoting TRush:
"The only way I ever get any views is by renewing. If I don't renew any items on a given day, then I check GA the next day, I'd have maybe 5 total views to my entire shop. If I renew 2 or 3 things once or twice during the day, then I'm likely to have 50+ views."
**
You only need ONE view -- from a bonafide buyer. Collecting Etsy views is about as lucrative as collecting Facebook "friends" -- good for your ego, but not much real use.
So what if your item gets 50+ views. The bottom line is: Does anyone BUY?
I don't have any problems with free lunches, a warm and fuzzy office, even down to tea cozies on the heating ducts. However, every corporation that I'm familiar with, other than Google, (I have two friends who work there and the perks are unbelievable...but they work 80 hours a week) that laid on every possible employee perk is bankrupt.
Google is set up so that an employee almost NEVER has to go home. You can get your dry-cleaning done, bring your pets, the cafeteria is always open, there are places to rest and chill out, there is free massage, unbelievable. Google picks you up from home and brings you back, so you don't even have to focus on driving. And Google hires the very best people with the most dedication. The REASON Google is set up this way is to get the most out of the talent it hires. It has never lost sight of its mission.
Unlike Google, Etsy seems to have no clear mission, which should be to serve its sellers. Instead, like many business failures, Etsy is concerned with what they look like, not the reality of what is going on, so the cute office seems to be its selling point. It's all about the Etsy image, not the job it is doing. Etsy has confused image and function to an extent that will lead to a giant fail.
I am the daughter of one of the original "Ad Men." I learned very young to see advertising with a very jaundiced eye. Even in grade school I knew it was bull shit. Advertising permeates almost everything in our society. The misfortune is that very few people can separate substance and image. Advertising is so ubiquitous that few people see it, even on an individual basis. It's like this...as long as I look good, even though I might have a giant breast lump, even though I drink half a fifth of Vodka every night and smoke two packs a day, even though I scream at my husband and my kids when I am home alone with them, just as long as I am fashionably thin and wearing the right clothes, I can look in the mirror and say I am ok. As long as I look good, I am good. And that leads to individual failures on a massive basis.
It's interesting to note that Google never blatantly advertises. It just is, like air, water and sunlight. Try to imagine life without Google and the mind boggles. The reason for Google's success is that it handles advertising for billions of other companies. Ironic, no?
Unlike Google, Rokali and friends are rewarding incompetent non-workers. If he were rewarding the caliber of people who work as hard as they do at Google, I would be fine with every possible perk. If Etsy worked for me the way Google does, I would never leave. I'd be a happy seller and this blog would probably have never come into being.
I'm at Artfire now. Funny, I have NO idea what the office at AF looks like, what perks they have, and I don't care. I do know that I have placed my little business in competent hands and I hope they have nice perks. Another thing about the people at AF, Tony, John, Jen, etc...they look like normal people who could be my neighbors. I do not see any false images, anyone trying to be something they are not. And damn, I love it.
Sorry for the rant. Mistaking image for reality is something that I think about a lot. ~~~ Libby
I don't see how Fred Wilson can sit on etsy's board and tell the public these lies.
Customer serivce, after 6 years is still a cut and paste email after a week of waiting.
Sellers still cannot offer their customers a coupon code or batch discount like any other freaking website on the planet.
Good thing they get a free lunch.
I've been in business for 20 years. I also saw those dot.com perks. I cannot understand how etsy treats the employees like kings and yet they treat the sellers like dirt.
If it truly is a million dollar company why don't they have a customer serivce department? Why can non paying buyers still ruin a seller's reputation with negative feedback?
And why does the front page of the site always have wire wrapped jewelry, acorns and cowls?
@RRobin
It's pretty hard to have people buy your stuff if they haven't even seen it. So yes, views count for something.
Well, boys and girls, Fred Wilson can very easily be followed on Twitter. Most of his posts lead directly to his blog, where it IS possible to comment.
It seems to me that he has begun "his" promoing towards a decent IPO.
Maybe the investors to be need to know about how the profit margin is maintained, ...
No refunds to sellers who take returns from "their" customers.
The end result of NO COUPON CODES which allows Etsy to give innaccurate sales totals to the world along with collecting full value FVF.
I'm trying to get him to specify what he was referring to when he said "Cutting edge customer service". He's replied to me once with some jibber jabber but I replied again trying to get him to specify. I'm responding to his blog as Alexmmr.
Your arguments are pretty credible, I would like to see actual data/evidence that shows whether or not renewing is worth it- ie more sales.
I did a quick analysis of my own sales (won't be too accurate b/c I have only 21 sales so far). But here's the run down:
8 = listed once $.20
10=listed once, renewed once ($.40)
2= listed once, renewed twice ($.60)
1= listed once, renewed 4 times ($1)
If data shows it's not worth it to renew, I would not renew again.
What I try to do instead is list a new item once a day. It is hard to do so when I am busy with my day job. But I often make several pieces of jewelry at once, then post them piecemeal.
I would be really interested in seeing large amounts of data comparing listing/renewing fees to sales.
I've never played the frantic renewal game. I will relist some things when they expire, I never renew it before then.
The renewal game does explain people who wail they sold one item but have 600/m in listing fees. people renew the entire shop over and over, bragging they're listed up to 2017.
Of course saying anything contrary to this strategy gets you ripped a new one.But I have consistent stock turnover in my shop, and few things get relisted more than twice.
But hey, it's their money. Its why some people like the penny slots in vegas.
@ for the hell of it
I agree 100%, Fred Wilson is promoting Etsy on his blog to try to raise their profile in hopes that other people will decide to invest when they go public. He can't really believe they are doing a good job, can he? But he's kept giving them more money. I'm sure he'll cash out great on this whole disgusting debacle.
Re: renewing, it USED to work. I was an avid Etsy seller in 2006-2008 too, and the funny thing is, you used to get like FIFTY views on the initial list, and 30 each renewal. These days, you'd have to be anointed by Mary to get views like that. Even the FP is hardly what it used to be. Etsy has just kept giving us less and less and less for the same amount of money. Meanwhile, they're making more and more money.
While the whole renewing game is not a fun one, has anyone here actually played with the Relevancy search or the new Explorer thingy? They're not so hot, either. I tag and title and describe properly with keywords, and my items don't come up at top while items that barely have anything do... It's very frustrating nowadays. I listed 2 new, and renewed 1 yesterday - in 24 hours, they've rec'd 5 & 6 views, each. It didn't used to be that way...
We were on the FP last week (5th or 6th time in 2 years), very odd timing, because I'd been speaking up with the rest in the Forums about the unfair overexposure happening daily. So, anyways, in one hour, these were the stats:
260 item views (on an item that had just 9 in the 4 days since listing)
22 item hearts
15 shop hearts
The highest traffic day in our shop, period, and the bounce rate dropped.
I want to know where else Etsy sellers can get that kind of amazing exposure for free? Anyone who says it doesn't do anything much for you is lying through their teeth.
Anyways, am hoping AF's deal comes through, because we need to diversify. Plus, I'm tired of being invisible.
Damn straight.....as more sellers come to Etsy, renewing (for those of us that actually make stuff ourselves from scratch and don't get to list 1000 items over 5 days LIKE THE RESELLERS DO.) will be terribly expensive. I posted this in a forum yesterday and got accused of being a cool-aid drinking Obama supporter ..(I assume the poster thought I was an African-American and was slightly racially motivated)- thread took forever to get shutdown -guess I'm not a fave...........
close me if you want Etsy - It'll get me off my butt on finishing adding the pay buttons to MY OWN SITE..........
WTF?
http://www.etsy.com/forums_thread.php?thread_id=6641200&page=1
people are excited over an app that buyers have to go to another site to use? are the cupcakes drugged?
etsy ... they are the new on-line bandits. Lock up your well dress children and put bows on your poodles!!
Relist, relist and relist!!
I sell vintage on etsy and this has given me some food for thought. A lot of it I already knew but I always assumed that it was necessary to stay on the first few pages at least. I have decided that starting on February 1, I will do an experiment: no renewing. The amount of money I spent on renewing in January I will spend on paid advertising on strategically chosen other sites in February. It is not a totally controlled experiment, but I will let you know how it goes.
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