This morning I woke up to this email from Etsy CEO Josh Silverman (do you want to read this? You probably don’t really need to. I’ll highlight the important bits):
Dear Seller Community,
Shoppers come to Etsy because they want something special, something they can’t find at a big-box retailer—and that’s all because of you. But these days, online shoppers expect free shipping everywhere they go. Etsy is no exception. I believe our job is to make sure you have the tools you need to compete and succeed in this fast-changing world.
Time and again buyers tell us that having to pay an additional shipping cost is what keeps them from shopping on Etsy more often. It’s become commonplace for online sellers to include shipping costs in the item price, so we’re launching tools to make it easy for you to do just that. This way your shoppers will never be surprised at checkout and they’re more likely to complete the transaction. In fact, we know that shoppers on Etsy are 20% more likely to complete their purchase when the item is marked as shipping for free.
So we're making changes to the shopping experience to make it easier for buyers in the US to find items that ship free. When we meet buyer expectations, shopping on Etsy becomes more competitive with the rest of e-commerce—and that could mean more sales for you.
Starting on July 30, 2019, we’ll give priority placement in US search results to items that ship free and to shops that guarantee free shipping to US buyers on orders of $35 or more. This means that shoppers in the US will primarily see items that ship free and shops that guarantee free shipping on orders of $35 or more in the top and most visible rows of search. We’ll also begin to prioritize these items wherever Etsy advertises in the US—in email marketing, social media, and television ads.
Offering free shipping doesn’t mean you have to pay for it yourself. No delivery service will ship a package for free, but, just like the cost of your materials and other business expenses, it’s a cost you need to consider when setting the price of your item. Our data also shows that Etsy buyers will spend more to have their order shipped free. So, offering a free shipping guarantee could mean you’ll make more per sale, helping to offset your shipping costs. [ ⟵ ED: THIS IS ALL NONSENSE.]
To simplify the process for you, we created a tool that lets you guarantee free shipping to US buyers when they spend $35 USD or more in your shop. The tool will be available in the next week. For shops with items priced at $35 or more, we also created a way to bulk edit listings so you can adjust your item prices to recover your shipping costs. That means you don’t have to take on the cost of offering free shipping yourself. Keep in mind that how you determine and set prices is up to you.
In addition to these new tools, we also offer Etsy Shipping Labels with the United States Postal Service and FedEx, giving you the kind of discounted rates that big ecommerce retailers benefit from.
Watch our video to learn more about this change and how you can start offering a free shipping guarantee. We also created in-depth shipping education so you can create a pricing strategy that’s right for you. We’re excited to continue working with you to deliver the shopping experience buyers expect, and to help your business grow.
Thank you for making Etsy a one-of-a-kind marketplace.
What this means is that the price of items is going to have to go up, to account for “free” shipping. The current system works like this: Sellers can set shipping settings to include a small charge added to calculated shipping to help cover the cost of shipping materials, etc, so the price a buyer pays for shipping is the actual shipping cost (based on size of box, distance, and weight) + this small fee that the buyer doesn’t actually see. My charge is set at $1.25, which seemed, in the offhanded way I was thinking about it, to cover the cost of the box and maybe the packing peanuts, but you know what? Let’s take a look at what it costs:
The following is pricing for Elements (ie, small pieces that fit into boxes under 12”).
I buy boxes in bulk in sizes I use all the time. I also have to pay to have those boxes shipped to me. Yes, I’ve investigated local packaging supply places; this is still the most cost effective way to order supplies.
My small boxes range from $.40-.70/ea, plus shipping, which makes them cost around an average of $.84 depending on how many I order at once.
I also order cornstarch packing peanuts, which cost more than styro, but I feel very strongly about using them. The shipping cost for a big bag of peanuts COSTS ME MORE THAN THE PEANUTS THEMSELVES WHICH IS REALITY. An average small box uses about $2(!!) of packing peanuts.
Packing an order of, for example, a set of 17 Elements takes me about 30 minutes (including wrapping the pieces, boxing them, making shipping labels, etc.). Packing Cacti pieces takes WAY LONGER. Packing custom windows can take 6 - 8 hours and involves a minimum of $20 in foamcore and $30 in other materials. But for those Elements, let’s say I pay myself minimum wage for those 30 minutes, that’s $7.50 before taxes.
We are now up to $10.34, before we’ve paid USPS a dime. Cost to ship a 1lb box from here to Brooklyn? $9.30.
So we’re up to $19.64. This is before tape (which I buy by the case at about $130 with shipping - yes it lasts a long time but it’s NOT NOTHING), Fragile labels and business cards/marketing materials. If you order from my Etsy shop, shipping to Brooklyn, you’d pay something like $11.75, so almost $8 of that cost is already being absorbed by me, whether that’s figured into the item price or just a loss or a mix of both.
The point of doing this is that I’ve felt in a blind rage all morning about this frustrating move by Etsy, and how best to handle it. Etsy - and obviously this all goes back to Amazon - is encouraging us to obscure these costs from buyers, but the costs are still there. Amazon can take all these extravagant measures to change their shipping methodologies (& I’ve actually been to one of their shipping plants! Many conveyor belts and robots and people and very efficient! Also IRRELEVANT to normal shipping practices!) &, not for nothing, but they also charge a membership fee for all that free shipping. But we aren’t fucking Amazon - we’re not even IKEA, who charges a ton for shipping! Just because Amazon has changed expectations for them doesn’t mean it changes expectations for everyone….. right? Not to mention it removes “free shipping” as a promotional tool (ie.- a SALE) from small biz owners. I just want my buyers & clients to understand that shipping costs what it costs, and not seeing those costs added on to your purchase means that they’re figured into the price, and that price is going to be higher and less transparent. Not to get too existential about it, but this whole idea that people will supposedly pay more to not have to pay for shipping seems like some insane denial of reality (everyone does understand that shipping costs money, right??) that I just can’t support. IT’S SO STUPID.
Fin: My Etsy prices will go up over the week of July 15th to compensate for “free shipping”, and we’ll see how it goes. After almost 8 years and triple-digit sales revenue, it may be time to part ways, but we will see.
Comments & questions on this one welcome! x, l.