What is happening with Etsy’s fee increase?

For some retailers, the unthinkable has happened: they need to start finding Etsy alternatives.

See, Etsy announced that beginning April 15th, 2022, they are raising their seller transaction fee from 5% to 6.5%.  For example, if you sold an item on your Etsy store for $100, the Etsy transaction fee will rise from $5.00 to $6.50. This seller transaction fee is in addition to the Etsy listing fee and the Etsy Payment Processing fee.

Perhaps this does not seem like a big deal. However, many ecommerce stores already have paper-thin margins. After all, Etsy sellers are often small businesses who don’t have the infrastructure in place for mass manufacturing. For that matter, they often prefer to sell hand-crafted items that can’t be mass produced. As a result, they usually have smaller margins to keep their price points competitive — and all this is before increased inflation and supply chain issues.

The bottom line is that a 30% increase in Etsy fees does not sit well with their sellers. The fact that the exact same report announcing the fee increase also reported record-setting profits for Etsy has fanned the flames further. On social media, many users urged followers to boycott the site for at least a week or to leave it entirely.

But if you typically sell on Etsy, what could you do instead?  What are the alternatives to Etsy?

Read on, and I will discuss the pros and cons of a few other options.

 

1. eBay

The website EcommerceBytes has handed out Sellers Choice Awards for 12 straight years. In order to compose their rankings, they survey thousands of sellers who give their feedback on the various platforms they use.  Which site has come in first the past two years?  Perhaps surprisingly, it’s eBay.

For some, eBay still has the reputation of the online garage sale site it was when it started. However, the site has expanded since its inception and offers an easy-to-use platform to host your sales. In the EcommerceBytes survey, eBay ranked 1st in the category of Profitability. In other words, most online sellers made the most money with eBay, thanks to its loyal global customer base. Sellers also ranked eBay first in Ease of Use.

That said, this Etsy alternative is certainly not without its flaws. Unlike Etsy, eBay combines all of its fees into one percentage and one flat fee, but those recently increased as well. (And they only gave sellers three weeks lead time.) So, if you are looking for alternatives because of Etsy’s seller fees, you won’t find significant savings with eBay.  Plus, users report an inconsistent experience with customer service. Finally, some sellers claim that eBay’s search feature doesn’t drive customers to them the way they would like.

Still, overall, if a survey of thousands of business owners ranks eBay #1, it is certainly a worthwhile alternative to Etsy.

 

2. Bonanza

If your main goal is to pay less than Etsy fees, Bonanza is probably the best option for you.  You can make an account for free, and their fee is straightforward and reasonable: it’s 3.5% unless your item sells for over $1,000.  You can also choose to purchase a membership. If you do, Bonanza will offer you some analytics tools and will help drive more traffic to your store.

Another potential benefit to Bonanza is that they (like eBay) allow you to sell almost anything.

So what’s the drawback here?  If you furrowed your brow at the word “Bonanza”, it’s likely because you have never heard of Bonanza before. They simply do not have the name recognition of other platforms.

Perhaps because of this lack of name recognition, users report lower overall profitability than on other sites.  That said, users also rank Bonanza quite highly for customer support and for the platform’s communications to users.

Packaging online orders for crafting business Etsy alternatives

When researching Etsy alternatives, consider that some marketplaces require that your products are completely handmade.

3. Aftcra

Aftcra is another good Etsy alternative, and its pros and cons are similar to Bonanza in many ways.

Aftcra is a little bit more particular about what you can sell on the site than Etsy in that they do not allow any craft supplies.  They also only allow goods that are made in the U.S. (which may be a point in their favor, according to some). However, according to Aftcra’s terms of use, they allow

  • Handcrafted or handmade items
  • Up-cycled or repurposed products
  • Prints, photographs, digital prints and screen-printed goods

Like Bonanza, Aftcra’s seller fees are straightforward.  There is no cost to create a store or to list item.  There is simply one flat fee of 7% for any item you sell. Ultimately, this should work out to be less than Etsy fees.

The main concern with Aftcra is the same one as with Bonanza.  Most people have never heard of this site.  So, you won’t get a ton of traffic without some digital marketing of your own, but you can always get help from a marketing agency.

 

4. iCraft

Like the two I have listed before it, iCraft is a pretty small site. However, it holds one major advantage over pretty much any other Etsy alternative: There are no seller fees.

You read that right. iCraft charges a one-time $25.00 fee to set up your creator exhibit page. Other than that, there is a monthly subscription fee, which ranges from $10-$15 (you play less per month if you commit to using the site for longer). That’s it.

So, if you can sell a lot on iCraft, your profit margin will be significantly higher than other sites. However, that may be a big if at this point in the site’s history.

One of the reasons you may not be able to sell as much on iCraft is because the site is a stickler that nothing can be mass-produced. Indeed, part of their terms of use states that every item you list must be an item that you have not listed before.  As a result, iCraft probably will not lead to major sales and major profits, even though they charge far less than Etsy seller fees.

However, depending on the nature of your store and the products you sell, iCraft may be a nice alternative to Etsy for you. Plus, the platform is continuing to try to up its game, promising a redesigned website soon. Also, their client base is international, so you get your products in front of more people (1.3 million in the last 6 months, according to iCraft).

 

5. Other Platforms

Of course, there are many other alternatives to Etsy in existence. Amazon Handmade, Ruby Lane, and Storenvy are just a few other sites like Etsy that allow you to sell your goods. These sites do have some benefits, such as how Storenvy will give you free advertising on their social media channels. However, there are several drawbacks to these sites that prevent me from recommending them highly:

  • They have fees that are just as high as Etsy’s new fees—if not higher. Amazon Handmade, for example, takes 15% of the total sale. So again, if your goal is to avoid rising Etsy seller fees, these sites are not great options.
  • Besides Amazon, these sites do not have the name recognition of Etsy. Overall, you may be paying the same amount in fees for less traffic.
  • Many of these platforms restrict what can be sold on their sites. Ruby Lane, for example, caters to sellers of vintage/antique items.

Put it all together, and I am not sure that any of these platforms are ideal Etsy alternatives.

 

6. Make Your Own Ecommerce Site

In many ways, making your own site feels like the best of all worlds.  You will have to pay some fees depending on which services you use to host/build your site (e.g. Shopify, WordPress, Woocommerce, etc.). You will also have fees for payment processing.  Still, the fees overall are likely less—in some cases, significantly so—than Etsy or any other hosting platform. Plus, you get to decide exactly what you want to sell, how you want to sell, how to design your site, etc.

So why don’t more people choose to create their own sites?  Well, doing so certainly requires tech savvy, and some people fear that they don’t have enough.  That said, there are experts that can build a great site for you in no time—and help you maintain it. Obviously, those agencies charge a fee, but it is often a one-time fee, as opposed to the constant drip of losing a percentage of every single sale.

The other potential drawback to making your own site is that you must do the marketing yourself.  Customers can’t do a search on Etsy and find your products. However, there are many ways to build up your online presence.  And again, many professional digital marketing agencies exist to help you if you need a boost.

Packing Orders - Etsy Ecommerce

Creating your own store requires more work, but you get the freedom to sell what you want without worrying about marketplace fees!

Final Analysis

Of course, as with anything, which marketplace is best for you depends on the context.  If you run a relatively small operation, especially as a side hustle, and everything you sell is unique, I would recommend iCraft.  If your aspirations are larger than that, or if you don’t fit iCraft’s strict definition of handcrafted, eBay, Aftcra, and Bonanza all have their pros and cons. Indeed, many people have accounts with more than one platform.

In most situations, unless you are a very tiny operation that expects to make very few sales every month, setting up your own website will likely lead to your greatest profits. That way, you aren’t paying fees on every sale (besides the payment processing fees that you will pay no matter which avenue you choose).

Regardless of the platform you use, though, remember: it is your branding and your digital marketing that are going to bring the most customers to your products.

And of course, also remember that the choice is ultimately yours. There are many alternatives to Etsy. So, if that platform is no longer working for you, you do not have to sell on Etsy.

Want help with setting up your own e-commerce website for your crafting business? Contact us for a consultation.