We’ve hit the Etsy ceiling after only a short time selling on the platform. It taught me a lot about making, selling, marketing, and shipping products online and it was the perfect launching pad for Lone Birch. However, as I look to grow and hire people to help make our products, it no longer makes sense to sell on the platform (This write-up is completely separate from the Etsy strike thing, which frankly, I wasn’t aware of until I started researching if others left the platform for the same reasons I am). We'll be solely focused on selling right here from our online store. Here’s why it doesn't make sense for us to be on Etsy anymore:
This is the topic most people bring up when they talk about leaving Etsy and everything they say is true. You can see a list of all Etsy’s fees here and there are a lot. In total, when looking at our numbers, Etsy takes in total, about 10%, just in fees. For high priced items, a $200 product will take $20 just in fees, which makes a big difference, especially when you combine it with high shipping costs (which I'll get into below). We almost have to decide if we want to grow the business or if we want to stay on Etsy. On Shopify, the fees are pretty straightforward, 2.9% + 30 cents.
There are a couple issues here. First, Etsy doesn’t offer shipping with UPS. You might think it’s not a big deal and shipping for both USPS and UPS are generally the same, but as I learned, they’re not. I recently shipped our extra wide lap desk to California on Etsy and it cost $75. I had the same product from our site ship to California and it only cost $28 with UPS (if you have a Shopify account, you also get discounts on shipping). The difference allows me to offer free shipping here on our site, whereas on Etsy, I can’t. Why Etsy doesn’t ship with UPS I’m not sure, but I imagine they have a deal going with USPS.
Another shipping limitation on Etsy is not being able to set different package sizes for different sizes of the same product. For example, we have 3 different sizes for our lap desk, but I can only set 1 package size for the product, which means when someone purchases a lap desk, regardless of size, they pay for shipping based on the size and weight of the package size I set. And since I can’t offer free shipping on the lap desks on Etsy due to the high shipping costs, I am either forced to create a high shipping price for the smaller items (which could prevent some sales) or eat a huge chunk of the shipping cost for larger items, taking some of the margin that could be going to someone we hire. I’m honestly in disbelief you can’t set individual package sizes for different product variants on Etsy.
I don’t like calling this section “Competition” because I don’t like to think about competing with similar companies. This is more about the kinds of products that are starting to come on Etsy. I see a lot more cheap products coming from overseas. It’s almost starting to look like Amazon IMO, but I get it, you have a duty to shareholders to grow Etsy and there’s a big opportunity for them to add more than just handmade products. It’s just a shame that it’s begun the pivot away from selling just handmade items from independent brands. This never took away from our sales, but buyers on Etsy are certainly changing.
Our distributed model won’t work
If you saw my first blog post about my vision for a distributed manufacturing model as the future of Lone Birch, you might have put two and two together and realized we couldn’t have made that model work on Etsy anyways. This is a deal breaker on its own, besides all the other points I make. Etsy outlines in their handmade policy that you need to disclose who makes your product if they’re independent contractors, which is fine, but once we start sending orders to contractors closer in proximity to customers for shorter shipping times and faster turnaround, we won’t be able to tell every customer who’ll be making their product since it varies location to location (which is something I want to eventually build for our own site).
Take a look at this commercial from Etsy:
Did you see who made those products they were showcasing? It’s because when someone buys something on Etsy and someone asks where they got it, they say “Etsy”, not “XYZ brand”. This is one of those underrated secret sauces about Etsy and frankly, I think it’s one of the best things they have going for their business. It’s almost like Etsy is getting credit for all the products they’re selling on their platform, at least, that’s how customers see it, even if it’s subconsciously. Or not so subconsciously based on this commercial, since they didn't once display the name of the makers for those products, not even in fine print. It's hard to establish your brand this way.
Don’t get me wrong, for individual makers, Etsy is a great platform, but for a business looking to grow, Etsy doesn’t make much sense, especially if you have products with smaller margins. Especially now, as their product landscape is changing, their buyer is changing, it doesn’t make sense for us anymore. Especially when as a brand, we don’t get much credit for the products we make and ship on Etsy anyways.
It was a great place for me to start - I learned a ton about the made-to-order model and it’s inspired a lot of what I’m trying to do now with Lone Birch, but it simply doesn’t make sense for a growing business, especially with the all-remote model I’m pursuing.
Thanks for reading,
CEO, Lone Birch