Reason behind withholding payment until items ship?

[jNicLoft]

Can someone please explain the reasoning why Etsy holds your funds until the item has been marked shipped? I love the idea of direct checkout but I'm not crazy about this aspect of it & am wondering why they decided to do this.

I keep a tight inventory on hand as this is how I make my living & I can't afford to tie up large amounts of $ in supplies so it's important to me to be able to have my cash flow available to purchase inventory as needed (which is based on my sales & if I don't have the money on hand from current sales I can't buy supplies for future sales). I'm finding this aspect of direct checkout to be very challenging.
Think I may have to remove direct checkout as an option unless I can figure out a way around this =(.

[OriginalsbyLauren]

I don't know for sure, but I assume it is because banks do not release credit card sales to sellers for a few days, and since etsy is not a bank, they probably have to wait for the money.

I get enough sales through paypal to buy supplies , so it is not a concern for me. Also, after a week or 2, you should be all set and getting deposits weekly.

I also do this fulltime, and I would suggest that you figure out a way to have money on hand. You have alot of sales, so you will still probably get enough through paypal to buy your supplies.

[jNicLoft]

Thanks Lauren! that's definitely a thought. I searched around to see if I could find somewhere about why Etsy chose that option & couldn't really find anything.
It's not the deposits I'm worried about it's the withholding of the funds until the items are shipped. Most of what I sell is made to order so it typically takes 4-5 days for me to ship items. This is becoming quite a large portion of my budget that is inaccessible for several days.
Maybe if I win the lottery I'll have enough money on hand & won't have to worry w/ running a tight inventory budget or making those pesky monthly mortgage payments ;).

[cathydurso]

Jenn, I am wondering the same thing. I sell a lot of custom items that take 2-3 weeks to make. I have one large order coming up that will take over a month to make. It will require a lot of supplies, that will cost a lot of money. And I won't have the money I need to purchase supplies until after I ship the items? It doesn't make sense to me.

[jNicLoft]

Yea I'm trying to figure out their reasoning behind it Cathy.. I'm all about helping Etsy out as I want them to do well too.. kind of a "I scratch your back, you scratch mine" thing & I'm hoping that maybe this is something they will consider changing going forward but I'm not really getting why they did it in the first place? Maybe an admin will chime in at some point & give us an explanation. It's definitely making it a challenge & the thing is that most of the customers I've had that are using it are repeat customers that used Paypal in the past so I may just end up discontinuing the direct checkout but again I'd really like to help Etsy cause goodness knows they help me!

[jNicLoft]

Just found this response from admin to someone else in another thread:

"Hi Leigh Anne,
Direct checkout is definitely an option, and it is not required. For sellers who need money right away to fulfill orders, direct checkout may not be the right option at this time. Please understand that funds being held is for risk management purposes and for the overall safety of the marketplace - but this is not directed at you specifically.

We are looking at solutions for sellers to receive money sooner from orders in a way that is safe for sellers, the buyer, and Etsy, but know that in the meantime, you have the option to turn it off if it is not the right solution for you.

Thanks,
Camilla "

So it looks like my solution will be to remove direct checkout for now & re-visit it when they have other options available.

[cathydurso]

Aha. Makes sense, I guess. There must be a better way, though. Hopefully they'll figure something out that will work for both sellers and buyers.

[AnotherTimeAntiques]

I see one possible solution for this is if Etsy can make it an optional choice - live on some listings, not on others. It would have to be part of the listing page instead of a flat standard policy as it now is. Just a thought.