Etsy sellers plan to form a union after the strike

In late February, Christy Cassidy logged on to Reddit and called for action by people selling their wares on Etsy.

The day before, Etsy announced that it was raising tariffs by 30%. For Cassidy, a seller of gothic wedding dresses on the e-commerce platform since 2006, the decision seemed an insult to a small business that continued to operate on the site during the pandemic, selling its wares.

“I wonder what would happen if on April 11 so many vendors switch their stores to vacation mode that Etsy will launch [freaking out]”Cassidy wrote.” And then they have no choice but to negotiate us».

Cassidy’s post on Reddit kicked off a week-long strike by Etsy sellers that began Monday. Thousands of Etsy sellers are switching their digital stores to “leisure mode” in protest of the fee increase. As of Thursday evening, an online petition outlining their demands had garnered more than 77,000 signatures.

Etsy has 5.3 million active vendors on its platform, according to the company’s website.

The fee increase comes after a huge period of growth for Etsy. The company was a big winner during the Covid pandemic as consumers cut back on shopping trips and rushed to online stores. In 2021, Etsy sellers accounted for gross sales of $ 12.2 billion, compared to $ 5 billion in 2019.

Etsy, known for its handmade and personalized products, initially noticed an influx of shoppers looking for face masks. Now Etsy is trying to get them back on the site, competing with other e-commerce players such as Amazon and eBay.

Etsy told investors in February that additional proceeds from the fee increase would be reinvested back into various company initiatives.

Raina Muskowitz, Etsy’s chief operating officer, said the company is “committed” to supporting vendors and helping them grow their business.

“We are always committed to feedback from the seller, and, in fact, the new tariff structure will allow us to increase our investment in the areas identified in the petition, including marketing, customer support and removal of lists that do not comply with our policy,” – Muscovite. the statement said.

Investors and analysts tracking the company have welcomed the fee increase and other recent changes. Guggenheim analyst Seth Sigman acknowledged that sellers are likely to bear the brunt of higher costs, but the changes should ultimately benefit “everyone on the platform” in the long run.

“We appreciate the concern of sellers. It’s their livelihood,” said Sigman, who recommends buying Etsy shares. “But the offset is that the company is using this as leverage to reinvest back into the business. Our view is that this should ultimately lead to stronger market share growth.”

Cassidy and other Etsy sellers, interviewed by CNBC, said they were still skeptical about whether the fee increase would lead to improvements to the platform. The company last raised the transaction fee in 2018 from 3.5% to 5%, and the payout was minimal, Cassidy said.

In addition to transaction fees, Etsy sellers also have to pay listing fees, payment processing fees and shipping fees. Under the Offsite Ads program, Etsy sellers also charge an additional fee of 12% to 15% each time shoppers make a purchase after clicking on an ad for their product.

“The last commission for the transaction increased along with [other fees]makes it harder for small creators to make a profit and make their business sustainable, ”said Marie Hart, who sells hairpins, talismans and artwork at her Etsy store.

As part of the week-long strike, Etsy sellers are urging the company to cancel the fee increase, allow them to opt out of ads on the pages and stop a recently launched program called Star Seller, which they say is putting undue pressure on sellers.

“As a little indie creator who designs and manufactures my goods and clothes by hand, I lose hours of work and money using Etsy,” said Sudabe Rohande, who runs Sudibear’s art and clothing store.

Some Etsy veteran vendors are also urging the company to crack down on resellers who they say have tarnished the market.

Since Alex Keatle became a salesman at Etsy in 2010, she said she has noticed an influx of mass market goods and dropshippers. The change feels disconnected from the origins of Etsy as a platform for showcasing handmade products that are often made to order, she said.

“For the most part, I find it a fun and eclectic community, both with friendly sellers and buyers, and a great place to socialize with my type of customers (who are often a bit botanical or alternative in their tastes),” – Kittle said in an email. “In the last few years, it has been expanded to include large businesses, dropshipers, resellers and even fraudulent stores.”

Etsy CEO Josh Silverman told vendors in February that the company expects to allocate more resources this year to remove lists that violate its policies. In 2021, Etsy spent $ 40 million on expanding teams and technologies focused on market security, the company said.

Nicole Lewis, who has been selling handmade pencils on Etsy for 15 years, said she disagrees with the premise of the strike. Etsy linked CNBC to vendors who were not involved in the strike.

Lewis said she did not blame Etsy for the increase in transaction fees, and that many of the recent changes are a necessary part of market growth.

“I think a lot of OG vendors who are upset about Etsy still consider Etsy 2004, 2005, 2006,” Lewis said. “It simply came to our notice then. Not in the world we live in today when there are so many people who want to sell their work and we are competing with Amazon ”.

Cassidy said she did not expect the seller’s strike to begin.

But after contacting sellers through the strike and realizing they shared many similar issues, she and other Etsy sellers began to consider whether they should form a union.

“The craziest thing is that I didn’t even realize how many people agreed with me,” Cassidy said. “It was this huge one that opens my eyes to see how much all the other people working on this platform, trying to make a living with me, agree and how much my clients support me.”

Etsy sellers are not employees of the company, but they hope that by uniting, they will be able to better support change in the online market. A number of Etsy vendors have joined the Discord server, where they intend to outline plans for the organization, Cassidy said.

While Lewis was not involved in the strike, she said she supported the idea of ​​a vendors union. “I honestly think it’s a smart idea because people just want to be heard and recognized,” she said.

Etsy representatives did not respond to a request for comment on the sellers’ plans to unite.

Cassidy said she was inspired by the Etsy reseller organization after witnessing recent union victories among Starbucks baristas and at Amazon.

Since the beginning of the pandemic, worker activity has increased across the country. Tighter labor markets in the United States have further boosted union support, and workers took the opportunity to demand higher pay and better help from their employers.

Since the strike began, Cassidy said she had been contacted by working groups to raise the issue of vendors’ organizations. Any next steps will come down to what the vendor community wants, she added.

“We don’t know what to call it,” Cassidy said. “It’s a union? It’s a solidarity solidarity? What do we call this thing? What it looks like? We don’t really know what it looks like because we’re kind of moving through uncharted territory.”