I’ve had a lot of people sending me questions about the new ads setup…I’ll be talking about it and the Q4 earnings report on my Youtube channel during my Tuesday Live, but for now, here are some answers to common questions. These have been gathered from the Admin Q&A, the written material Etsy has put out, and other official sources that are available publicly, so it’s all answers from Etsy, not me! I’m also not saying that I like everything about this program, but it’s better than what we have now.
Q: Will the $10,000 cutoff apply to each individual shop if we have more than one, or are they combining our shop totals?
A: They’ll be treating each individual shop as a separate entity, so if you make less than $10,000 in two shops they’ll both be eligible for the opt-out even if the combined incomes are over $10,000.
Q: Are we being charged the off-site percentage on all clicks from Google or other ads? What about on our own social media posts?
A: You’re only charged a fee if Etsy runs an ad for one of your listings, someone clicks on it, then buys something from your shop. If someone clicks on another seller’s ad and buys from you, you won’t pay the fee. If someone clicks on one of your social media posts or off-site ads (if you run them yourself), you won’t pay the fee. If someone clicks on an on-Etsy promoted listing ad, you won’t pay the fee. The fee is only for off-site ads that lead people to your shop and lead to a sale from your shop.
Q: Etsy says that the number of sales in my shop that will have the fee is going to be about 15%, is that right?
A: They said that’s an estimate, and isn’t guaranteed. (It seems to be based on the actual traffic from off-site ads now, and as we know, traffic doesn’t equal sales, so it’s likely that the actual percentage of sales that will be affected will be a lot lower than that.)
Q: When is this starting?
A: They’ve said they’re going to start rolling out the new dashboard in a few weeks, so probably mid to late March for that. Then there will be a “trial” period where sellers will be able to see how many sales are actually coming from off-site ads before we have to pay for them, so if you have a shop that makes less than $10,000 a year you’ll be able to see if it’s something you want to opt out of. If you have a shop that earned more than $10,000 in the past 12 months, you’ll be enrolled automatically and can’t opt out. If that’s the case, you should use the trial period to make decisions about whether you should raise prices to cover any fees you may have to pay. However, if you only get one or two sales from off-site ads in that tie, it might not be as big a deal as people are making it out to be. So wait to see what happens in your shop, because everyone’s experience will be different.
Q: What if I don’t raise my prices, but then an ad goes viral and I start getting a ton of traffic from that ad?
A: If that happens, raise your price for that item. It’s really unlikely that an ad is going to go viral, but I guess anything can happen…
Q: Why did Etsy try the first system then change it?
A: In the 4th quarter earnings presentation, Josh said that they listened to the sellers and decided this was a better way to handle it. He also mentioned that they realized that the percentage of sellers who were paying for google shopping ads wasn’t going to increase as quickly as they had anticipated, so I’m sure that had a lot to do with it.
Q: Will I get to choose which listings I advertise on the off-site ads?
A: Etsy has said that they give the entire Etsy catalog to each off-site platform, and that platform decides which listings to advertise. So be aware that if you have something on a deep discount, there’s a small chance that it could be purchased through an outside ad. But remember that it’s a really small chance. Don’t feel that you need to increase your prices or change other things in your shop on the off-chance that sometime in the future you MIGHT get a sale from off-site ads that makes you pay a fee on a sale listing. The Etsy admins also addressed this in the forum Q&A and said they would look into that, so they might adjust things for sale items in the future.
Q: Why are they doing this?
A: Etsy’s goal that they stated last year was to move their own advertising budget away from ads that led to individual shops, and into ads that drove more brand awareness and got more people onto Etsy as shoppers and returning shoppers. They wanted to reduce their off-site ads budget and have sellers finance the ads that drove people to their own shops, so the first version of ads tried to do that. Because sellers weren’t adopting the google ads as quickly as they anticipated, they’ve changed it to more of a commission/affiliate system for the off-site ads. In effect, Etsy is our affiliate, and if they make a sale for us they get a commission.
Q: Why can’t we opt out if our shop makes more than $10,000?
A: I don’t like that part either, but they’ve said that a lot of Etsy sellers don’t want to grow their businesses because they’re just doing it part time, and they’ve determined that the $10,000 annual income mark is kind of a breaking point where people who are making more than that tend to be the sellers who DO want to grow more. So making it mandatory for shops that earn more than $10,000 will keep the system where Etsy subsidizes our off-site ads viable.
Q: How do they figure the $10,000?
A: They’ve said that they’ll do a monthly review, and if in the past 12 months your shop made $10,000 or more, you’ll be automatically enrolled in the mandatory version from then on. So at that point you can’t opt out of the program even if your income drops below $10,000 annually.
Q: How do we know that the sales are actually coming from ads or not? I don’t trust Etsy to tell the truth.
A: First, I would say that if you don’t trust Etsy, go sell somewhere else. Don’t stress yourself out by dealing with a company that you don’t trust. Next, every ad campaign uses tracking software that generates reports about the traffic and where the customers clicked and what they bought. That’s not a weird thing, it exists and has been used for years, so Etsy is going to be using the data they get to generate the off-site dashboard where you can see where someone clicked to lead to a sale in your shop. That will start showing up in your shop dashboard in the next few weeks.
Q: Wait, is it “sells” or “sales?”
A: “Sell” is a verb. “Sale” is a noun. So you would say “I’ve had 10 sales today, I would like to sell more by having a flash sale.” (Sorry, couldn’t resist)
Q: Isn’t this just a way for Etsy to make a profit off of us?
A: Etsy has ALWAYS paid for off-site ads as long as there’s been a marketing department. A lot of sellers just don’t seem to realize that they’ve been getting traffic that they weren’t paying for, Etsy’s been footing the bill for that. It benefits both the seller who gets the traffic and Etsy as a platform since it drives customer awareness of Etsy. But they’ve decided that the lower-funnel traffic (traffic going to one shop) isn’t as beneficial to Etsy as a platform, so they’ve been moving their advertising budget toward tv ads (higher funnel traffic) to drive overall awareness in people about Etsy.
They’re still going to be paying for most of the cost of off-site traffic. The 12-15% that we pay won’t completely cover the cost of Google Shopping ads, or Pinterest, Facebook, Yahoo and Bing ads. But they said that they’re okay with that because they realize that the off-site ads benefit both sellers and Etsy by getting new customers to the platform. Etsy is subsidizing our off-site ads, we’re not subsidizing theirs.
Q: If we see that one of our listings is getting a lot of off-site sales and we don’t like it, what can we do if we can’t opt out?
A: You’ll have to take that item out of your Etsy shop, since they give the entire catalog to outside platforms and they’re the ones deciding when to show it. You can’t take it out of off-site advertising unless you just don’t sell it. I’ve done that with one of my listings that got a ton of clicks from google shopping ads and no sales, so now I just sell that item on my website.
Q: I have some items that are over $1000…would I really have to pay a $150 fee on that?
A: They’ve said that the fee will be capped at $100, so once it hits that amount it won’t go over regardless of the final sale cost. That’s still a lot, but at least it allows you to plan for a specific amount and not worry that a $4000 item will result in a $600 fee.
Q: Are they going to bring back Cost Per Click control for our ads on Etsy?
A: They haven’t said anything about that but they’re still hinting about more changes to come, so we have to wait and see.
Q: What happens if I refund an order that had the off-site fee attached to it?
A: They have said that if there’s a full refund or a partial discount issued on an off-site ads order, that percentage of the fee will also be refunded, it works like any other fee.
Q: Why does it give credit for the ads for all orders from that person for 30 days? That seems really long.
A: This is more of an affiliate model, where Etsy is out trying to sell our orders, and if they make a sale for us, we pay them a commission. 30 days is pretty standard for that type of model, so it’s not unheard of. I have an affiliate plan for my programs where people get 50% of every referral they make and they’re linked FOREVER, so 30 days is short compared to that.
Q: Why does Etsy give credit for ads to things that my existing customers buy, sometimes? I know they’re a repeat customer but they still give ads credit for it.
A: The customer is probably typing your shop name into the search bar, then clicking on the top row of ads to get to your shop. That’s human behavior, it’s aggravating, but there’s no way to totally prevent people form doing it.
That’s all I can think of right now, so if you’d like to ask more questions you can leave a comment and I’ll try to find the answer. You can also join my public facebook group to get CONSTRUCTIVE Etsy and home-based business advice. It’s a non-promotional, non-whining group, so for complaining please go to the Etsy forums. But if you’re interested in doing the work to get your Etsy shop on a good track come on over and join us here: Home-Based Business and Etsy Tips
And yes, you do need to answer the questions to get into the group…I do check 😉