Etsy U-turn in row over withholding sellers’ money
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August 3, 2023Etsy U-turn in row over withholding sellers’ money
Etsy U-turn in row over withholding sellers' money
Etsy U-turn in row over withholding sellers’ money
Etsy U-turn in row over withholding sellers’ money Online marketplace giant Etsy is making a strategic shift in response to mounting criticism from sellers who have been plagued by delayed funds. The move follows a recent report by the BBC revealing that numerous sellers faced an astounding 75% freeze on their earnings for an extended period of 45 days. Etsy’s decision to overhaul its policy aims to quell rising discontent and enhance communication with its vibrant seller community.
Addressing Seller Concerns:
In an unexpected turn of events, Etsy is revamping its fund withholding policy after a wave of dissatisfaction surged through its seller base. The company acknowledged the “pain points” associated with its previous reserve system, pledging to enhance transparency and reduce the amount of money held in reserve. Although specific details of the new policy remain under wraps, Etsy is taking proactive steps to foster a more conducive environment for sellers.
Etsy’s Challenge: Decline in Profits and Pushback:
As Etsy grapples with a decline in profits, the recent backlash from sellers adds further pressure to the company’s performance. In the April to June period, profits plummeted by 15% compared to the previous year. This unfortunate trajectory was compounded by a projected revenue drop in the coming months. Additionally, a boycott movement among sellers has gained momentum, driven by frustration over fund freezes.
Sellers Speak Out:
The discontent among sellers is palpable. Take Dan, a seller who found himself grappling with £7,000 held hostage by Etsy. This predicament forced him to resort to credit cards and family loans to sustain his business and livelihood. Rachel Collyer, another seller specializing in ceramics, lamented that £899 of her hard-earned money was locked away, thwarting her ability to procure essential materials.
Government and Industry Response:
The outcry from sellers has reached the ears of both government officials and industry watchdogs. The Small Business Commissioner, Liz Barclay, voiced her concerns about the lack of clarity in Etsy’s communication. Minister for Enterprise, Markets, and Small Businesses, Kevin Hollinrake, also intervened, urging Etsy to address the issue promptly to prevent the demise of viable small enterprises.
Growing Seller Movement:
The discontent has fostered a growing movement among sellers, with many considering a strike or boycott. Social media platforms such as Facebook and Reddit have become hubs for discussions on this matter. A Facebook group called “Etsy Reserve Strike” has witnessed a surge in membership, while Reddit threads like r/EtsyStrike and r/IndieSellersGuild have emerged as virtual gathering spots for like-minded sellers.
Etsy’s Identity and Leadership:
Etsy, a prominent online marketplace, empowers independent sellers to establish their own digital storefronts, specializing in unique, handcrafted, and bespoke items. The company, led by CEO Josh Silverman, was founded in 2005 and has attracted major financial institutions as key shareholders. Amid its journey, Etsy’s shares have experienced fluctuating fortunes on the stock exchange.
Conclusion:
Etsy’s swift response to seller dissatisfaction underscores its commitment to fostering a more harmonious ecosystem for its vibrant seller community. The company’s strategic shift aims to restore confidence, bolster communication, and expedite fund disbursements. As Etsy navigates this transformative phase, the fate of countless small enterprises hangs in the balance, while the seller movement gains momentum across digital platforms.
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