Front Burner - Etsy sellers go on 'strike'

Episode Date: April 14, 2022

Etsy wants a place among the giants of online commerce. The handmade and vintage item marketplace has seen sales explode during the pandemic, doubling since 2019 and passing $12 billion US last year. CEO Josh Silverman says it's competing to be "the starting point for your e-commerce journey." But some of the creators and sellers on Etsy say, amid this growth, the site has been shrinking their profits and devaluing their labour. Thousands of sellers are on what they call a "strike" this week, pausing their shops to protest growing fees. Today, a conversation with an organizer behind the effort, Gothic and Victorian dress- and costume-maker Kristi Cassidy.

In the Dragon's Den, a simple pitch can lead to a life-changing connection. Watch new episodes of Dragon's Den free on CBC Gem. Brought to you in part by National Angel Capital Organization, empowering Canada's entrepreneurs through angel investment and industry connections. This is a CBC Podcast. Hey, I'm JB Poisson. It was back in 2013. My cat got really ill and I was getting vet bills, you know, through the roof and I couldn't afford to pay them. And so I created an illustration inspired by him

and I started an Etsy shop and sold it in my Etsy shop to help pay my vet bills. And so... Trisha Robinson is an artist in Montreal and one of the thousands of Etsy sellers boycotting the platform this week. The online marketplace is supposed to be for just handmade, unique, or vintage goods.

And almost a decade ago, Etsy helped Trisha realize she could turn her art into a career. It was really like a marketplace that you felt good being a part of because you were a maker and celebrating, you know, like local business, shopping locally. And, you know, something wholesome about the handmade aspect of it. But right from the beginning, Trisha saw signs that Etsy wasn't all good vibes. But I remember the first time that I received a payment from them, I noticed how different the amount was from what I made versus what they put into my account.

And at first I was like, hey, are they robbing me? Like, what's happening? Like any e-commerce platform, there's a lot of truly niche and weird stuff in the depths of Etsy. Rubber spurs that clip on the back of your Crocs. Baby bibs with the face of Nicholas Cage printed on them. Bread, bread, bread. Taxidermied rats dressed up like the Joker. Let's put a smile on that face. But I'd also bet someone you know is obsessed with Etsy for buying gifts or art or furnishing their home. Take it from Frontburner's Etsy connoisseur, our producer, Simi. Okay, so right now in my Etsy cart, I have a mid-century modern Danish

Scandinavian teak sideboard credenza from the 60s. The last thing I purchased was a bib that says, what about second breakfast on it? What about elevensies? For a friend who's having a baby. Don't include that in the episode. So you may or may not be surprised to hear that Etsy is fighting for a spot in the big leagues of tech commerce. Sales have boomed over the pandemic, more than doubling since 2019 and passing $12 billion U.S. last year. And just listen to CEO Josh Silverman speaking to shareholders in February. One of my favorite investor questions is when someone asks what my big, hairy, audacious goal is for Etsy. Well, it's to make Etsy the starting point for your e-commerce journey.

We understand that's quite a bold goal, given that to make that ambition a reality, we must and are competing against the biggest names in e-commerce and all of retail for that matter. But we believe we have a real opportunity to win. Etsy has also made it its mission to, quote, keep commerce human. And this is where a rift has opened up with some sellers. Justine Hickey is in Regina and runs a shop called Avocado Girl Crafts. It's a side hustle where she sells a bunch of sculpted clay items like cupcake earrings. So they charge you 20 cents per listing. And then they also charge when you make a sale.

And when I joined Etsy, the sale, the percentage that they would charge you was around 3%. And in 2018, they raised it to 5%, which is a huge chunk of my sale. And now they want to go And on Monday, Etsy raised the transaction fee another 30%, bringing it to 6.5% of each sale, among other and possibly bigger fees. They're making this huge thing saying, oh, we had so much profit in 2020 and you guys did amazing. And now we want to accommodate this growth. Etsy says it'll use these fees to improve support and marketing for everyone. But starting on Monday and running through Sunday,

thousands of Etsy sellers have gone on what they call a strike. They've paused their stores and have emblazoned their social media with messages like, don't iron while the strike is hot. A lot of Etsy sellers are planning on going on strike from April 11th through April 18th. We will be putting our shops into vacation mode for that time, and we ask that buyers refrain from buying anything from an Etsy shop during that time as well. So I'm not really one to make all these claims on here, but as a small business owner, I just want to say, what are they doing? Okay, so I originally wasn't sure how I felt about the Etsy strike, but then I looked at my fees for the past three months,

and this is how much they've taken from me, $5.97 and $6. Only a small percentage of Etsy's millions of sellers are participating. And some sellers hate that buyers are being urged to boycott as well. Now on paper, this all sounds like a great idea, but it's going to hurt a lot of small creators. Still, what's going on here is kind of unique because creators on Etsy don't work for Etsy. So technically, it's not really a strike. But as Trisha and Justine put it, it is still, you know, by definition, a workplace, they are profiting off of the labor that we do.

And so why should we not have a say into the policies that they create? Like, I wish they would recognize that without the artists, they don't have the profit that they're seeing. I'm Jamie Poisson, and I'm joined today by the woman who started a growing petition against Etsy's rate hike, and who's organizing the so-called Etsy strike, Christy Cassidy. Hey, Christy, thank you very much for being here. Thank you for having me. I know that you started your Etsy shop in 2006, just a year after the site was founded. In those early years, I wonder what made the site such an attractive place for you to sell? It's basically, I mean, I used to talk to people about it with like so much excitement. It was like eBay for artists is what I

used to call it. And it's just like the fact that it was a place that was entirely designed to connect people that make things with people that want to buy something that's made by another person. And that was just absolutely magical that that, you know, human to human connection of, you know, making things for people through a website. What kind of things do you sell in your shop? So I make Gothic Victorian wedding dresses and steampunk and fantasy costumes. Cool. What do people who buys those? What do people use those for? Weddings, special events. There's a lot of like really interesting, you know, fancy parties where people dress up and get to, you know, be someone else for an evening, you know? Yeah, that sounds like a lot of fun.

So I want to get into with you today how you think the platform has changed over the years. You described it at the beginning as like an eBay for artists. Categories are the perfect way to see all the types of items available on Etsy. Simply choose a category. Have you seen the products that were offered on the platform change over the years, the offering? change over the years, the offering? So the way the products have changed is that very, very, very gradually, Etsy has been getting worse and worse at enforcing their terms. And they've let more and more people that are not making their items, not even designing their items, we call them resellers. And it's basically people that are buying stuff that's made in a factory and

tricking buyers into thinking that they make these items themselves. And it's just kind of gotten gradually worse over time. So maybe I'm on Etsy and I think I'm buying like a bespoke iPad holder. And really, it's something that maybe somebody bought hundreds of at a factory in China or something like that. Have I got that right? Yes. Yeah, actually, there's a BBC Watchdog special on it. People were buying stuff in discount, like a discount store in England and selling it on Etsy even. The shelf cost £15.99 and was clearly advertised as handmade. But when it arrived, Kate found evidence suggesting otherwise.

It was in a plain box, but then when I opened that box, it was in a B&M box. Kate went straight to the B&M website, where she saw a photo of the exact same shelf for sale, but for just a fiver. I felt a bit like a mug. I know that we've heard from sellers that Etsy's culture has really changed in the years after 2017. That year, its CEO was suddenly fired and replaced by a guy named Josh Silverman, who is focused on growing Etsy. Hi, I'm Josh. It's a real honor and a privilege to be here. I spent a lot of time in my first

three months speaking with many of you, and I've heard a very consistent message. It's time to cut out the distractions and double down on the core Etsy marketplace to make it grow faster and grow sales for all of you. I couldn't agree more. One of the changes Tricia and Montreal ran into in 2019 was a free shipping program. And the policy stated that we will optimize your shop to U.S. buyers if you offer free shipping above $35 U.S. And I was like, no way, I'm not going to offer free shipping that bites into my profit. So as soon as I didn't opt into that new policy that they had, all of my U.S. buyers disappeared. And so Tricia opted in for a time, but she said that wasn't any better. Then I was getting maybe a bit more U.S. sellers.

And what was happening was they were, you know, reaching that threshold where I had to offer them free shipping. And that was eating over 50% of my profit. And so... Tell me about another one of these programs you've come up against, one where Etsy features your product in ads placed on other websites. How does that work? So yes, the way it works is Etsy purchases ads on my behalf, which I do not want. ads on my behalf, which I do not want. If a customer clicks on one of these ads and then purchases anything from my shop in the next 30 days, I pay 12%, an additional 12% fee to Etsy

on top of all the other fees I already pay. And like my stuff is really, really labor intensive. The amount that I charge is based on the time that it takes me to make it. If Etsy is giving me extra sales, but not paying me as much as what I want to earn for my time, it's like the equivalent of, you know, your boss saying, come work for us extra time, but we won't pay you as much. You'd be like, yeah, no thanks. But we're forced to. We have to. There's also this program from last year called the Star Seller Program. And I wonder if you could just explain to me how it changed the way sellers are supposed to operate.

Yes. So the Star Seller, you have three metrics that you're supposed to try to qualify for with it. The first one is 95% five-star ratings on all of your orders. The problem with that is that they've designed the system so that a four-star rating counts the same against your total as a one-star rating. The second metric is responding to 95% of messages within 24 hours. 95% of messages within 24 hours. You have no way to set regular off hours on the weekend. You can't like just, you know, have the timer not start until you get back on Monday. The only way to get around that is to set an auto reply. And the way Etsy is designed, there's this giant message button. So anytime they click that, it opens a new message thread. And I have to respond to all of those threads or I lose my star seller writing.

Oh, really? Yeah. Now it's kind of silly the way that works. Yeah. You have to send like six messages back to the same person. Yes. And then the third one is shipping 95% of your orders on time. And you can imagine how that would be majorly, majorly good for someone who has everything in stock and really bad for someone who's doing everything made to order. Huh. That's so interesting because it feels like sort of antithetical to what Etsy is supposed to be, which is like a platform for custom products, right? For products made by people's hands. Yes. that these programs are designed to make like a better customer service experience and to increase the amount of sales for everyone, including you. Like maybe you wouldn't have sold a dress

without one of those offsite ads. And I wonder how you would respond to that. I don't want to make additional sales at a lower labor rate. I would like to make what I want to actually charge for my designs, please. If I have a choice between selling something, you know, working for cheaper and spending time with my children, I would rather spend time with my children. In the Dragon's Den, a simple pitch can lead to a life-changing connection. Watch new episodes of Dragon's Den free on CBC Gem. Brought to you in part by National Angel Capital Organization, empowering Canada's entrepreneurs through angel investment and industry connections. Hi, it's Ramit Sethi here. You may have seen my money show on Netflix. I've been talking about

money for 20 years. I've talked to millions of people and I have some startling numbers to share with you. Did you know that of the people I speak to, 50% of them do not know their own household income? That's not a typo. 50%. That's because money is confusing. In my new book and podcast, Money for Couples, I help you and your partner create a financial vision together. To listen to this podcast, just search for Money for Couups. So all of this brings us to what Silverman told sellers in an email in February, really what started all of this. And what did that email say? I guess let's start with the good news. Well, good news for Etsy.

It was basically, I didn't do that well during the pandemic. Etsy. It was basically, I didn't do that well during the pandemic. So it sounded kind of like Etsy patting themselves on the back for an absolutely wonderful year where they did absolutely amazing sales. And then at the very end of it, followed by a, yeah, by the way, we're raising your fees. Okay. And tell me about that. Like what, what did the email say about this fee raise? So fees were increasing from 5% on every sale to 6.5%. And it's the basic transaction fee, the thing that you pay to sell items on the platform. You do have other fees that you pay and those have, particularly with the addition of the off-site ad fee but yes that particular fee was going to be increased by 30 percent and like for me whenever my shop is doing

well that fee is about at least sixteen hundred dollars a year so that expense going up by 30 percent is a pretty big difference. I know that Silverman said the extra money from these fees would be used to improve marketing, support, and tech on Etsy. And so is that good? What do you make of that? If I'm going to be frank about it, I don't believe them. Like with marketing, they're already trying to force us to foot Etsy's marketing bill

with the off-site ads. And we definitely do need better support. But it would be great if they would have offered us some of these things from the record sales. What had to have been record profits that they got off of all that money that we made them in years prior. So you've got this petition now to stop the rate hike up on coworker.org. And you're leading this boycott or strike among Etsy sellers that's underway all week. And how many sellers have joined that action? I checked it just before getting online.

And the number of people that checked the I'm a seller box on the petition was 23,300. And I don't remember what. was 23,300 and I don't remember what. So basically 23,000 etc. sellers have just pulled their products from Etsy this week. So we've always wanted to be a movement that could get as many people joining us as possible. And many people, if you depend on Etsy for your income and you have no other way, like you cannot just like stop receiving all of your income for a week. You know, we're not a traditional union. We don't have strike funds. So what we've always done is tried to offer options. So some people are striking for the entire week. Some people are struck just on Monday for the one day. And then there is even

an option to have people just change some images in their shop and whatnot to help spread the word to buyers about what's going on on Etsy. Labor experts have pointed out that this isn't legally a strike because, as you mentioned, sellers are employed by Etsy or you're not part of a union. It's a platform that sells your goods. But in recent years, gig workers for companies like Uber and Lyft have gone on strike and expanded, I think, how we think about labour. Rideshare drivers are on strike in San Diego and in 10 other cities. The one-day strike is designed to rally support for federal legislation that would allow them to unionize. And so, do you consider this action you're leading here a labor movement?

Most definitely. Most definitely. I mean, the problems that we're having with Etsy is that we're making less and less money for our labor over time because they're taking more and less money for our labor over time because they're taking more and more from us. And you get to the point where if you raise your prices anymore, then people won't be able to afford the stuff you make anymore. And it's like, I want to make things for people. I want them to be able to afford it, you know? And it is literally all about labor. I want to earn a livable wage for my time. And that's getting really difficult with Etsy and its current bent. You know, Christy, listening to you talk, and I know some other sellers have said this too,

do you feel like Etsy is moving closer to like an Amazon model than its original iteration or purpose? Most definitely. And I'm not the only person to think that. I think one of the things that made me chuckle at the very beginning is like, we don't need an orange Amazon. one of the things that made me chuckle at the very beginning is like, we don't need an orange Amazon. Somebody said that and it made me laugh. And as someone who's been on the site for so long, how does, how did that make you feel? Horrible. I mean, there's a reason why I don't sell my stuff on Amazon. I'm, I'm more unique than that. You know, people go to Amazon because you just want something random that you need around the house. You know, people go to the old Etsy because they want something special. What do you think we lose if we lose an Etsy that's really for hand crafters and makers? Honestly, you lose the hand crafters and makers eventually. What's happening is that Etsy is pricing us out of business.

That's what it boils down to. I mean, our businesses are becoming more and more unsustainable, and we're not going to be able to stay on Etsy. That's the situation I'm in personally. I cannot stay on Etsy if they do not change some of this stuff because my business is no longer sustainable. do not change some of this stuff because my business is no longer sustainable. Chrissy, I know you've got a list of demands in the petition related to the recent issues that we've talked about here. But I wonder, big picture, what are you hoping comes out of this strike? So obviously, the best thing possible would be for Etsy to listen to us. I mean, we built the Etsy platform, and it was an amazing

place for so long. And we want it to be that place again. We want it to be the place that connects buyers who love handmade items with people who love making things and, you know, the unique vintage things too. I talk too much about handmade because that's what I do. But if that is not as successful as we hope, at the very least, we are so much stronger today now that we have found each other. I mean, the community we've started to build and the, we're not sure what to call it. We're not sure if it's a union or a solidarity organization or what, but the thing that's in the works that is going to come out of this, I am so excited about. Chrissy, I want to thank you so much for coming on to our podcast today. It was really, it was a pleasure talking to you. Thank you. And I wish you the best of luck with

the great products that you make. Thank you so much. We reached out to Etsy with some of the seller's concerns you heard today. Here's what an Etsy spokesperson told us in response. Our seller success is a top priority at Etsy. We are always receptive to seller feedback. And in fact, the new fee structure will enable us to increase our investments in areas outlined in the petition, including marketing, customer support, and removing listings that don't meet our policies. We are committed to providing great value for our 5.3 million sellers

so they are able to grow their businesses while keeping Etsy a beloved, trusted, and thriving marketplace. That's all for today. I'm Jamie Poisson. Thanks so much for listening to FrontBurner. Talk to you tomorrow.