E-commerce company Etsy told investors that it will increase seller transaction fees by 30% in the next two months. From 5 to 6.5%, the company will implement this change to improve customer experience worldwide.
Etsy to Increase Seller Transaction Fees
According to a report by The Verge, the global online marketplace will be making some changes for its sellers when it comes to transaction fees. The e-commerce firm will be charging a particular percentage for every sale that the seller makes.
It will take effect starting April 11.
Related Article: Etsy Partners With Manufacturers To Help Sellers Scale Their Online Businesses
Why Etsy Wants to Raise Seller Fees
In the same report, Etsy CEO Josh Silverman said that they have established some improvements which drove sales for the sellers. This was seen in the 2021 record of sales per seller.
"Our new transaction fee will enable us to invest in key areas like marketing and support to further extend our strong momentum," Silverman added.
Most importantly, Etsy wants to guarantee that these fees will properly come to the right place. As such, the company aims to spend it on purchasing various tools for sellers. This would also be used to further improve their marketing as part of their plan to create "class-customer experiences" around the globe.
However, Etsy might have learned a lesson from the past changes that took place in the platform. For instance, its advertising program did not go as planned previously. Some users, especially the sellers decided not to push through with the program.
With this implementation, the merchant would mostly feel the high seller fees. Over the past years, this was one of the common issues that they were raising on Etsy.
It should be noted that Etsy has not been creating this change yearly. The last time that Etsy increased fees for transactions was way back in 2018.
At that period, the seller fees increased to 5% from the former 3.5%. With that, for every item listing, the seller should pay $0.20, in addition to the payment processing fees.
Etsy Shares Skyrocket to 18%
In an article from CNBC, Etsy shares have reportedly increased to as much as 18% on Thursday, Feb. 24. It exceeded its fourth-quarter expectations in earnings which were $0.79 only.
The earnings, in fact, fell to $1.11. While the projected revenue was $685 million, the actual revenue for Etsy at this specific quarter was $717 million.
For more e-commerce stories, Tech Times previously wrote the Wish e-commerce platform said that it would take legal action against France following the government's decision to remove its removal from search engines and websites.
Elsewhere, hackers used credit card skimmers to steal information from over 500 e-commerce sites.
At that time, the researchers said that the hackers installed a malware code for customers who check out products on the page. Once they input the details, the attackers can now obtain confidential information from the victims.
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Written by Joseph Henry
