ETSY ANNOUNCEMENT: Effective July 16, Etsy’s transaction fee will increase from 3.5% to 5% and it will also apply to the cost of shipping. All other fees, including listing fees, will remain the same.
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5% minus 3.5% = 1.5%
On $100 sale a 1.5% increase = $1.50
On $50 sale a 1.5% increase = $0.75
On $25 sale a 1.5% increase = $0.38
On $10 sale a 1.5% increase = $0.15
https://www.etsy.com/seller-news/2018-june-update?campaign_label=everybody&utm_source=adhoc&utm_camp...-----
Etsy - "We’re planning to invest even more in making Etsy the best place to run your creative business. To help make this happen, we’re updating our transaction fee to 5%, and it will now also apply to the cost of shipping. This change goes into effect July 16, 2018."
The PROS and the CONS of the 1.5% increase . . .
The CONS = a loss of $0.15 per sale per each $10 sale amount including shipping.
What this means is that Etsy Sellers will best consider that this is not just a 1.5% increase in their cost of doing business and a 1.5% reduction loss in the sale's profit margin . . . it really means an additional charge of 5% selling commission on shipping charges being added to their sale costs as well as the 1.5% increase in the product sales price.
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"We’re introducing optional monthly packages that give you access to a suite of new tools designed for shops at different stages of growth. You can still access all the tools you know and love without paying for a monthly subscription and you can switch at any time."
The above will be a subject of another post here for members later.
The PROS = Etsy will be increasing their amount of revenue from sales from 3.5% to 5% and just under 43% increase in this revenue. In addition Etsy will be receiving new revenue based on the 5% charged on shipping amounts.
If the shipping amount is $3.00 then Etsy's revenue will increase by 5% of $3.00 and $0.15 per sale made. If the shipping amount is $5.00 then Etsy's revenue will increase by 5% of $5.00 and $0.25 per sale made. If the shipping amount is $10.00 then Etsy's revenue will increase by 5% of $10.00 and $0.50 per sale made.
In other words, Etsy's revenue will increase somewhere over 50% on selling commissions depending on the cost of shipping.
Before this change it cost the Etsy seller only the selling commission on the amount of the item and with this change it will cost the Etsy seller the selling commission on the amount of the sale including shipping.
So financially there is no longer a benefit from the Etsy seller to have shipping added to the price of them item. The selling commission will be the same either with or without shipping included.
Guiding Question --- "Maybe the Etsy seller may want to considering including the price of the shipping now with the price of the product; and, thus be able to offer the price with Free Shipping (AKA shipping included)?"
Another thread post here later will present the PROS and the CONS of offering Free/Including Shipping . . .
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Members; please share your thoughts and analysis below; thank you . . .