Etsy to force sellers to advertise off-site taking 15% cut
Etsy has told its sellers that it will begin advertising their goods automatically offsite and taking a cut of up to 15 per cent on every sale.
Amid the online marketplace’s successful fourth quarter results, it announced the controversial new update to its seller advertising service, first launched in 2019.
While all sellers will be added to the programme, shops doing more than $10,000 in sales per year will be unable to opt-out of the advertising programme, which will post adverts on “high-traffic” sites like Google, Facebook and Instagram.
Some sellers have criticised the move which will charge up to three times the usual five per cent fee it takes for items sold on its site.
This new focus on advert revenue comes amid the marketplace’s fourth quarter results which beat analyst expectations and saw its share prices jump 10 per cent.
Gross merchandise sales increased 33 per cent to $1.66 billion (£1.29 billion) for the three months to December 31, ahead of average analyst estimates of $1.6 billion (£1.24 billion).
Its revenues also increased a healthy 35 per cent to $270 million (£209.5 million), comfortably ahead of average estimates of $264.8 million (£205.4 million).
Etsy also raised its outlook for the year ahead, estimating revenues between $1.04 billion (£810 million) and $1.06 billion (£820 million), once again topping estimates of $1.02 billion (£790 million).
These stellar results point to the growing success of Etsy’s similarly controversial free delivery initiative, which requires all sellers to offer on order over $35.