Etsy just released its financial results for 2019's third quarter (July to September) - here are the highlights:

  • marketplace sales up 30.1% to $1.2 billion - but note that these sales include sales on Reverb, the site they bought earlier this year. Reverb's GMS was $76.9 million.
  • Etsy's revenue was up 31.6%, to almost $198 million
  • gross profit was up 24.7% to $129.0 million
  • Etsy's net income was $14.8 million 
  • revenue from the marketplaces was nearly $141 million, versus revenue from seller services which was only $56 million.
  • active buyers and active sellers on Etsy increased 19.1% and 19.3% year-over-year, respectively. This is the first time in a few years that sellers increased at a faster rate than buyers, but note that there were still way more buyers added this quarter than sellers. 
  • active sellers for the whole company are up to 2.5 million (remember, that counts anyone who has listed anything in the past 12 months), while active buyers (anyone who bought in the past 12 months) are at 44.8 million. 
  • 59% of sales happened on mobile devices. 
  • "As of the end of the third quarter, 62% of items on the Etsy marketplace offered free shipping to U.S. buyers and 74% of U.S. listing views were eligible to ship for free."
  • they say they are continuing to optimize Etsy Ads, and "have seen negligible budget churn from sellers"
  • the amount spent by each active buyer in the past 12 months grew for the sixth quarter
  • Etsy's gross margin was down a bit, due to the purchase of Reverb, Etsy Payments fees and the introduction of Etsy Ads (I expect they will give more detail during the call)
  • they spent $50 million on marketing this quarter, up from $39 million last year

 

Press release here: https://investors.etsy.com/press-releases/press-release-details/2019/Etsy-Inc-Reports-Third-Quarter-2019-Financial-Results/default.aspx

and here are the slides that go with the presentation: https://s22.q4cdn.com/941741262/files/doc_financials/2019/q3/Etsy-3Q-2019-Earnings-Presentation.pdf (I haven't looked at them yet)

 

The stock is down because Etsy lowered its guidance: https://www.marketwatch.com/story/etsy-stock-down-10-after-company-lowers-guidance-2019-10-30  although I am seeing the usual rise, then drop, then rise happening: https://www.google.com/search?q=Etsy+stock&pws=0&gl=us&gws_rd=cr  As always, it will take a while for everyone to digest the full report and call. 

 

The investor phone call starts at 5 pm ET; I will try to listen in & post highlights afterwards. A transcript of that call will eventually be posted here: https://seekingalpha.com/symbol/ETSY?news=transcripts  and usually elsewhere, within the next 48 hours. 

 

I will mark any key updates as "solutions" so the posts will be highlighted, and will add to this OP in the next hour for as long as I can edit it. 

 

My previous threads on quarterly results, for comparison:

2nd Q 2019

1st Q 2019

4th Q 2018

3rd Q 2018

2nd Q 2018

1st Q 2018

4th Q 2017

3rd Q 2017

PinchtheMuse
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Re: Etsy 3rd Quarter 2019 Financial Results: Sales Up 30.1% YOY to $1.2 billion

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@MinxouriVintage 

I'm guessing if they tested the free shipping eligible (and you don't even need to do a test...just look at the structure) they knew the conversion rate was going to suffer.

It almost has to suffer because the site has spent the past couple of years designing the search page and listing page to not work with that kind of promotion on an individual shop level.

You cannot hop to a shop front from the search page.

You go to the listing and that shop link on the listing page has been tiny, constantly moving and at times not even looking like a clickable link. If the buyer goes scrolling down.... eventually it takes them off that shop entirely. There are actually more links to take a buyer away from a shop on a listing page (last time I looked) than actually keep a buyer in shop. Again, designed that way by the site.

How is a buyer supposed to find multiple items from the same shop easily and quickly or in an enjoyable way? Either kind of shopper. One that needs multiples to reach the price point. OR the shopper that came in on a $50 item and wants MORE LOVELY PRETTY THINGS for gifts for later for whatever since shipping will be free.

A buyer can't and the site knows that.  THE SITE designed it that way.

As sellers on the site's venue we can only "compensate" for that kind of terrible design in only very small ways.

Meanwhile the CEO and CFO are busy deciding which shops get a carrot and which shop gets the beating.

Or who gets the nice cocktail or who gets the lever (I like to imagine the Veruca Salt scene in the Willy Wonka movie on that one, haha).

THAT is what they are focused on.

Not the fact that they hadn't even set up their site design for the scheme they rolled out.

May as well be playing the lotto really. Mostly because their end goal had little to do with attracting a buying segment with threshold shipping and more to do with .... whateveretsyreasons. Which often have little if anything to do with benefiting a user (buyer or seller).

 

 

 

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ZehOriginalArt
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Re: Etsy 3rd Quarter 2019 Financial Results: Sales Up 30.1% YOY to $1.2 billion

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@PinchtheMuse wrote:

How is a buyer supposed to find multiple items from the same shop easily and quickly or in an enjoyable way? Either kind of shopper. One that needs multiples to reach the price point. OR the shopper that came in on a $50 item and wants MORE LOVELY PRETTY THINGS for gifts for later for whatever since shipping will be free.


Right. I also imagine there are shoppers who cannot figure out why they are not getting free shipping when they add multiple items to their cart from different shops. When Etsy has worked so hard at debranding individual shops and making it look like everything is being sold by Etsy , how can something like FSG work well?

The only way I can think of is for sellers to add variations to each item under $35 that are more expensive than $35 to get the upsell. For example, sets of things.

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MinxouriVintage
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Re: Etsy 3rd Quarter 2019 Financial Results: Sales Up 30.1% YOY to $1.2 billion

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You are 100% correct.  They need to make it easier to get into our shops AND stop advertising other competitors listings on our shop pages if they want free shipping over $35 to work. 

But it didn’t work well before they redesigned our pages to limit easy entry to our shops. So I can only imagine this has made it worse. 

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PinchtheMuse
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Re: Etsy 3rd Quarter 2019 Financial Results: Sales Up 30.1% YOY to $1.2 billion

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Site definition of "FSG working" was different than buyer and seller definition of "FSG working" is my take on it.

Site seemed to just want a price increase from sellers.

It did not seem (to me from their statements) that it had to do with setting up a site thing that benefited the user.  They may have incidentally hoped that average dollar sale increased. BUT again.. from my observations only ... there was a good portion of earlier this year and last they "carroted" listings that were low price point. Seemed to push even .... under $10 listings. There was a time you could search for something that was no doubt should be a high price point in the search return and 1/3 of the page would be something slightly related but under 10 or twenty dollars. If I recall... "wedding dress" was a great example of that.

It used to be earlier this year or last you got mostly wedding dress hangers on page one of a search for a wedding dress. As a buyer ... I can't "agree" with that kind of result? I know the difference between a Hanger and a dress. IF you want me to realize you also sell wedding dress hangers when I'm looking for a dress .... you could have a sidebar with "you might also like"...not pollute my search with stuff I did not ask for.

So instead of getting a cool fun buyer search thing (you might also like)... we get told as sellers to raise our prices (but not directly--but in a most convoluted unintuitive way I've ever seen/experienced) and then get threatened with levers and sticks when none of us (buyers or sellers) wanted search skewed to under $20 items in the first place. We just wanted search to show what we asked it to.

Now they are going to try and sell us that sellers can get carrots if we can grok site double talk to english enough to do what they want instead of what they asked.... and I don't bet... but I would bet money that every shop is NOT eligible for carrots either. Just all shops eligible for sticks.

And it does make me wonder as a user here.... how often will they stick a shop out of my search and hide the thing I wanted? And if they are going to do that why should I even search here?

I actually set up one of my shops as sort of a backwards shipping threshold thing because the site has so little interest in "helping" sellers or buyers implement that easily. I (before the FSG push) set up that shop to have shipping included for all items and a specific discount after X amount spent that would discount the built in shipping cost on the individual items. So hey now I know that gets me the stick (because on the day site wanted FSG I did have FSG but did NOT raise my prices because I was already set up for it). Setting up a system to allow a buyer to get free shipping (what the site said they wanted) GETS ME THE STICK or will get me the stick the way I am reading their statements.

So stick for me because I am offering FSG the site's recommended way AND in a "real" way for the buyer... also a path for a buyer to get a discount which meant I didn't raise my prices which the site did want and now that shop is getting the stick.

Yeah that is great. So from that tiny teeny tiny seller perspective... what the site has told me in all of this... not only do they NOT WANT a practical "real" FSG... they are going to give me the stick if I actually set up the best path I can to provide that to the buyer.  I never expected running a promo discount would vault me into carrot shop status on this site.... but it certainly never crossed my mind it would hit the corporate folk's radar AT ALL let alone as something "punishable".

Site has always been like that in a way.... but man.... really it feels like at this point I could just price everything whatever increase the site wanted and never told anyone, offer free shipping and then just offer the site another 20% cut again and it would not make any difference to the site. It would be more like... yeah this is what we (the site) are DUE because we breathe in a room- now go away and stop talking about silly things like buyer wants and needs, product mix, price point strategy, site stability, and stupid things like offering desirable seller services at reasonable prices.

And very possible I am in the minority feeling that way. And for the site's sake I hope I am in the minority on that feeling.

 

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DivineCrossings
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Re: Etsy 3rd Quarter 2019 Financial Results: Sales Up 30.1% YOY to $1.2 billion

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@PinchtheMuse @I so agree! My stats reflect an almost one on one ratio of views to visits...most likely because people can’t find the link to my shop. And that’s a new development for the last couple of months.  It’s the generic version of Etsy...every shop melded together into one giant marketplace. I’ve said this before, but it bears reiterating , Etsy management doesn’t care WHO sells something...only that something gets sold, hence the stripping of shop branding and identity.

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cindylouwho2
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Re: Etsy 3rd Quarter 2019 Financial Results: Sales Up 30.1% YOY to $1.2 billion

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@PinchtheMuse   @MinxouriVintage  @Gokojo   just to clarify, "free shipping eligible" items have been receiving priority placement since July 30th, as have digital items, but Etsy's definition of "priority placement" has changed during that time, and Etsy has tested putting items without FS or the FSG on the first page since September 6 (although I have not seen that lately.) Etsy has gone back & forth on whether or not to show "free shipping eligible" as a badge in the search results. Right now I am not seeing it in either account, and sometimes when they have shown it, it is still trumped by the best seller badge. 

"Site definition of "FSG working" was different than buyer and seller definition of "FSG working" is my take on it." - agreed. Just in case it is not clear, my main posts in these threads are always Etsy's official statements. My own opinions go in square brackets in the core posts, or in other comments. 

As always, whenever something in the algorithm changes, it can take a few months to settle down again. That's my take on the additional clumping & reappearance of the lower priced items on page 1, which they were getting better at dealing with, for a while, until they changed 3 major things regarding search within 6 weeks. 

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PinchtheMuse
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Re: Etsy 3rd Quarter 2019 Financial Results: Sales Up 30.1% YOY to $1.2 billion

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@cindylouwho2 

Totally understand the site statements are not necessarily your sentiment. I think you know that but will state that plainly for others too. I've seen some of the site's 3rd quarter statements incorrectly associated with cindylouwho2.  Some misunderstanding in other threads regarding what was a site quote versus the OP's actual statements.

When I'm commenting here about what the site said ...  it's my thoughts and comments on how I understood the site statements not anything to do with what I think the OP thinks or does not think.

And I'm sort of looking at the things the site statements said to me some of it clearly and some of it more indirectly.

How FSG is being displayed, boosted or not boosted or displayed is not quite a focus for my shops or me specifically because as mentioned above... I sort of adopted some model/version of that before the site was pushing for it and also less concern now because my interpretation of the site's statements is that any FSG boost or not... is probably temporary anyway one looks at it (either all shops go FSG and then who gets boosted? Or the site will have something else they need the page one carrot for). And of course, my own sentiment that the site does not see FSG as integral to the near or medium future otherwise there would have been some site design changes preceding it.

I do appreciate Cindy taking the time to break down the 3rd quarter stuff.  So thanks for that!

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cindylouwho2
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Re: Etsy 3rd Quarter 2019 Financial Results: Sales Up 30.1% YOY to $1.2 billion

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@PinchtheMuse   thank you! Yes, just wanted to clarify for anyone reading along. (you saw that too, eh? LOL)

I appreciate the in-depth discussion from everyone, especially those who point out different angles, and even my blatant errors 😀  
@LandandSeaGems  @Gokojo  @MinxouriVintage  @MouseGarden  

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Gokojo
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Re: Etsy 3rd Quarter 2019 Financial Results: Sales Up 30.1% YOY to $1.2 billion

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@cindylouwho2  To clarify, only FSE items got the boost? Not items that converted to FS? I'm still confused as to how that all shook out when it was first launched. 

Also, you're no longer seeing the FSE badge? I'm still seeing it so assuming that's a test. And lastly, the best seller badge is showing with free shipping items? I had only been seeing that on items that didn't have FS or FSE. Which was a huge bummer because losing that badge had HUGE impacts on sales for my items that had them but were then trumped by the FS badge. 

Apologies for the questions and if I totally misinterpreted what you said. I've been running all over my shop today bouncing between welding and woodworking so my brain is already fried, and it's only noon lol. 

 

Editing to add: YAY! I ran a search in a different browser and saw I got my Best Seller badge back underneath the FS badge! Crossing my fingers that test sticks. 

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cindylouwho2
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Re: Etsy 3rd Quarter 2019 Financial Results: Sales Up 30.1% YOY to $1.2 billion

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@Gokojo   priority placement applies to items with straight free shipping (including digital items) and items with the $35 guarantee.

I am not seeing the free shipping eligible badge anywhere today - just checked 5 different devices/browsers. 

They have definitely been testing where to show the best seller badge. I don't see it on my shop home page because they show "free shipping eligible" & "free shipping" but I do see the badge on my items in search, in this account. 

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PinchtheMuse
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Re: Etsy 3rd Quarter 2019 Financial Results: Sales Up 30.1% YOY to $1.2 billion

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@Gokojo 

I'm not Cindy (obviously).

What I am seeing in search at this exact moment.

A listing can have:

a best seller AND free shipping badge.

Only a best seller badge

Only a free shipping badge

There were best sellers with best seller badge and when clicking through they had FSE, but no badge for indicating FSE on the search page.

A listing can be on page one with Free Shipping Eligible (but does not have any badge).

I did a search on "wood console table" and for your specific listing on page one you show "free shipping" badge and "best seller" badge.

 

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ModernSwitch
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Re: Etsy 3rd Quarter 2019 Financial Results: Sales Up 30.1% YOY to $1.2 billion

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I feel like Etsy either needs to have a working search and everyone gets to participate or Etsy needs to set it up so our shops are our shops and they don't show other peoples ad's or other people's items. I know search placement is not guaranteed and that all you pay for is to list your item in your shop so why isn't your shop your shop? The whole reason I don't advertise my Etsy shop on social media is because even though it is 'my shop' it has everyone else's stuff in it with the similar items and ads. I really feel like it's not fair to sellers to try and be on both sides of the fence here.  

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silcoon52
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Re: Etsy 3rd Quarter 2019 Financial Results: Sales Up 30.1% YOY to $1.2 billion

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ModernSwitch the ads in my shop aggravate me also so now what I do is notify other shops when I see them advertise.  One example is in my shop I have tieback headbands with skulls on a motorcycle with flames displayed on a bone looking skull head and beneath it in an ad was a suggestion for hand knitted baby booties.  So I contacted that shop to let them know what was going on-she was so thankful as she said that's not the type of ad she was paying for and will discontinue her ad campaign!  I think if enough of us  did this it might help etsy rethink their search criteria!

After all if you're paying for ads and it shows up in something completely out of your genre then what would be the reason to advertise?  If enough sellers pulled their ads that might cut into etsys revenue!  Just a thought but it worked with all but one of the sellers that I contacted.

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THECRYSTALROCKSHOP
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Re: Etsy 3rd Quarter 2019 Financial Results: Sales Up 30.1% YOY to $1.2 billion

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stock price tonite down to 42.00 a share. awful when starting price was at 37.

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FirefliesUK
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Re: Etsy 3rd Quarter 2019 Financial Results: Sales Up 30.1% YOY to $1.2 billion

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Amazing @cindylouwho2 , you're so kind to have put this together for everyone!

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cindylouwho2
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Re: Etsy 3rd Quarter 2019 Financial Results: Sales Up 30.1% YOY to $1.2 billion

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Final update - Etsy took their time in releasing the amped up and dumbed down version for sellers, but it is now available here: https://www.etsy.com/seller-handbook/article/etsy-update-increased-marketing-means/653373088424

Side note - when did they start deleting most of the comments on Seller Handbook articles? I noticed last week that one comment section had essentially been gutted, and it seems that is becoming the norm now. 

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TheJewelleryGiftShop
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Re: Etsy 3rd Quarter 2019 Financial Results: Sales Up 30.1% YOY to $1.2 billion

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Thank you for the update, I agree it is very peculiar that so many comments are being removed, it's almost like Etsy are in denial.

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LittleGemsJewells
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Re: Etsy 3rd Quarter 2019 Financial Results: Sales Up 30.1% YOY to $1.2 billion

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Thanks @cindylouwho2 I think it's a case of ' The truth hurts '!

They don't want it in their face that the changes are severely damaging many, many sellers and having a negative impact on shops and income many of which have been very successful shops up until this year.

 

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FirefliesUK
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Re: Etsy 3rd Quarter 2019 Financial Results: Sales Up 30.1% YOY to $1.2 billion

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Please correct me if I am wrong but from what I can gather -

My shop was one of those that seemed to have the lights turned off Aug-Sept. Im no expert but I do think this has lots of contributing factors, Etsy are making more from ads , as a whole Etsy income from sales are up as they are forcing sellers to include shipping therefore taking a larger cut on sales and I imagine that reflects in a large portion of the '21.8% increase' in sales as a Etsy income figure?In time the changes made are going to do damage in my opinion, I think sellers are realising new Etsy Ads are not beneficial (whereas 2018 ads worked well) so they will stop paying for ads which I imagine was a huge income spike & from what I can gather from reading the forums it is only increasing migration to other platforms such as Amazon handmade & sellers are putting their time into their own websites instead which I cannot imagine being good for Etsy in the long run. It seems Etsy is turning its back on its original ethos which sellers and buyers loved so much and seems like greed is taking over trying to compete with the likes of Amazon Prime & chinese import platforms. I only take this from what I read on the forums and what has happened to my own shop but I hope I am wrong and some are still doing really well.

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FirefliesUK
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Re: Etsy 3rd Quarter 2019 Financial Results: Sales Up 30.1% YOY to $1.2 billion

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I did leave a comment on the article but I think its been removed?

 

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FuzzyFoxDesigns
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Re: Etsy 3rd Quarter 2019 Financial Results: Sales Up 30.1% YOY to $1.2 billion

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I'd never really noticed the comments on seller handbook articles - removing them would certainly be consistent with their "stage managed" approach to problems these days (their "Q and A" sessions that skirt around the big questions, their responses to seller bug reports and complaints with feedback that's exceeding general/patronising and doesn't answer the questions etc)

I won't bother reading it - I believe you when you say amped up and dumbed down, and I'm not prepared to read any more glib stuff that suggests I don't know how to run my own business or understand the issues here :D It all just makes me mad so I'm better off ignoring it. I might be an artist, but I'm by no means ignorant of things and I resent all attempts at coercion and changes that I know will be hard for many in my group with fierce passion. There aren't many in these forums who are silly - and none so unintelligent that they deserve the tone Etsy seems to reserve for them. Heartily wish for a healthy dose of respect for sellers intelligence around here!

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MagicalBeansHome
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Re: Etsy 3rd Quarter 2019 Financial Results: Sales Up 30.1% YOY to $1.2 billion

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Dang, comments are dropping like flies. 

I'm guessing they want to hide seller's comments from media. Lotsa backlash happening on other sites regarding the FS & EA. Lots! 

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cindylouwho2
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Re: Etsy 3rd Quarter 2019 Financial Results: Sales Up 30.1% YOY to $1.2 billion

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@FirefliesUK  I posted about that somewhere else in this thread, but I don't think that the move to free shipping covers all of that increase, as Etsy admits that sellers moved less of the amount to the item price than Etsy expected, and that it is mostly people with cheaper shipping that opted into free shipping anyway. It definitely accounts for some of it, though! Income from Ads is way up, but that included the period before Etsy Ads was released, when some people noticed CPC going up, and some of us were raising our max. CPC on some items to try to counter the free shipping boost. We won't really know how Ads are working until after the first quarter 2020, unless Etsy admits to anything before then. 

I also agree that anyone down in the past few months probably needs to look at multiple causes, since there has been so much going on. Many people still seem to be doing very well, however. 

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HouseofWhisperingFir
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Re: Etsy 3rd Quarter 2019 Financial Results: Sales Up 30.1% YOY to $1.2 billion

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It's really disturbing how many comments have been removed from this article!

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ScenicRiversNets
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Re: Etsy 3rd Quarter 2019 Financial Results: Sales Up 30.1% YOY to $1.2 billion

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I’ve just noticed that all the deleted or removed comments have been totally gutted. It’s like a government coverup. I wish we could impeach Josh Silverman.

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