Etsy Strike 2022 Recap

The boycott/”strike” of Etsy sellers and buyers took place April 11-18, and received a fair bit of news coverage compared to similar previous actions. It also got some traction on social media: e.g., the Etsy Strike hashtag trended on Twitter on the first day in the US. Given that the organizers have stated that they intend this to only be the beginning of actions by sellers, everyone involved with Etsy should take a closer look at what went on and what might be coming, whether they supported the strike or not. [There are valid disagreements with the use of the word “strike” in this context, but for ease of understanding I will use that word without quotes for the rest of this post when referring to seller actions, and the word boycott when talking about buyers.]

To recap: Etsy’s announcement of a 30% hike in the transaction fee led to a group of sellers organizing through Reddit and other outlets, and calling for an 8 day strike and boycott of Etsy starting the day the fee increase took effect. Their demands included cancelling the fee increase, allowing sellers to opt out of Offsite Ads, and cracking down on resellers. 

As I reported in my last news summary on March 31, the media were already picking up the story a few weeks in advance, and that led to far bigger articles and interviews since. Anyone who didn’t hear about this strike doesn’t follow much news, because it was mentioned by media outlets large and small, and not just in the US. The organizers collected all of the coverage here. Even Etsy’s founder Rob Kalin found time to tweet for the first time in almost 7 ½ years, saying: “I support @EtsyStrike. This is getting ridiculous. Time to build a better marketplace for handmade goods?”

While a lot of the coverage was fairly staid, covering the strike and Etsy management talking points without much analysis, there were some exceptions. An article in Fortune hit the key point that Etsy brass need to be worried about: “Principally, what Etsy stands to lose is its reputation, Rhomberg says. “If it wants to bill itself as a small-business marketplace supporting individual crafters, that will be dampened by people who say they’re being exploited.“ Another academic told The Globe and Mail “Sellers aren’t expecting those demands to be met solely because of this action. The biggest outcome of the strike will be to Etsy’s brand image, said Prof. Close.” 

So the real corporate concern should not be that striking would make Etsy lose money over the 8 days, but that the Etsy brand would be tarnished in the eyes of both the general public (who are all potential shoppers) and of course the shareholders. Let’s examine what (little) we know on those points.

First, Etsy possibly did lose a bit of money by having fewer listings available for sale during those 8 days, although the true extent of shops going into vacation mode or deactivating listings is not available to us. I’ve tracked the number of listings available on Etsy that ship to the US since March 30th, and there was a large drop on Day 1 of the strike, with the numbers not yet having recovered to the April 6 peak of almost 98 million items:

[Note: it is impossible for us to monitor exactly how many listings are available on the whole site at any given time, since Etsy now rolls paid ads into the totals shown in search, and forces searchers to choose a “ships to” country. Since the United States is Etsy’s largest country by far, the US totals are a decent proxy. It’s not clear what the larger-than-normal jump in numbers on April 1 was, but the drop after April 6 was likely listings being deindexed for non-payment of bills for shops who are signed up for autopayment, and the April 22 drop was possibly due to the weekend, although it was greater than expected.]

The numbers hit a low of 96,469,252 on Day 3, over 1.5 million less than the pre-strike peak, before they began to climb again. 

However, Marketplace Pulse claimed that: “…a couple of thousand Etsy sellers put their shops on vacation mode, effectively closing their stores. But none of the top sellers participated in the strike, and those that did represent less than 0.1% of the nearly five million active sellers. Slightly more than a thousand of the top 50,000 shops on Etsy (a cohort responsible for three-quarters of total GMV) are currently closed, many for other reasons than the strike.” It’s not really clear how they came to that assessment of “a couple thousand”, since we know some shops chose to deactivate items instead of using vacation mode (perhaps under the erroneous impression that vacation mode was more damaging to their shops in the long term). It’s also impossible for anyone to accurately calculate the gross marketplace sales through the API; only Etsy has the real numbers. The API only counts the lowest price variation on each sale, and doesn’t count multiples of an item sold. That said, it’s clear that there was not broad seller participation. 

While some buyers publicly stated they would not buy from Etsy during the 8 day boycott, there is no way for outsiders to quantify what that meant to Etsy’s bottom line. It would not be surprising if some were swayed by the strikers’ comments, though. For example, this quote in the Wall Street Journal nicely sums up why sellers on average seemed to be angrier this time than during previous strikes and boycotts: “It’s really obnoxious to tell us sellers, ‘Hey, we made record profits last year and we’re gonna celebrate by raising your fees a whole bunch,” said Bella Stander”. Even some Etsy shop owners who didn’t have a problem with the fee increase acknowledged Etsy’s clear communications gaffe there.

Some media outlets noted that Etsy likes to claim it is helping disadvantaged people run their own businesses, but perhaps doesn’t do as good a job at that as they think. The Washington Post [soft paywall; text and audio] on this point:

“Two of the lead organizers and three sellers who took part in the strike told The Washington Post that recent policy changes on the platform have transformed it from a refuge for marginalized people seeking to start their own businesses — including many women, LGBTQ people and people with disabilities — into a place that replicates some of the real-world economic barriers those people face in trying to earn a living wage…

Etsy has flaunted the fact that it attracts sellers who have been historically underrepresented as entrepreneurs. Last year, Etsy chief executive Josh Silverman appeared on CNN to discuss the high number of women who are Etsy sellers, characterizing the platform as an “on-ramp for women all around the world.” 

A 2021 Etsy report notes that the site has more than 5.3 million active sellers around the world, 32 percent of whom rely on Etsy for their sole income. According to that report, 79 percent of the site’s U.S. sellers are women. And 14 percent of Etsy sellers identify as LGBTQIA+ — double the proportion of LGBTQIA+ people in the U.S. population. 

The Etsy report does not measure the number of sellers with disabilities, nor the intersections of sellers’ genders and races — though it notes that 76 percent of Etsy sellers are White.”

[I’ve often noted the complete absence of disability in Etsy discussion of “diversity”, demonstrating the company has a pretty narrow definition of what is diverse. It’s a gaping hole in the “Keep Commerce Human” banner, and it isn’t the only one.]

So customers might decide to boycott Etsy based on what they read in articles and heard from the shop owners directly. But roughly 2% of listings temporarily disappearing and few of the biggest shops participating in the strike doesn’t really seem proportionate to this level of media coverage. So why did many of the biggest newspapers and networks hop on this bandwagon?

Likely the biggest reason is the general interest in unions these days, with the news coverage of union organizing attempts at some of the world’s richest companies, e.g. Amazon and Apple. These corporations all made record profits during the pandemic, but that wealth isn’t benefiting either general employees or customers. CEO pay continues to increase at a far greater rate than both inflation and the average worker’s wage. [Etsy is even called out in that article, for all of its top executives making millions of dollars (mostly in stock compensation, not salary - Silverman’s 2021 compensation was over $40 million - see page 56). You can sign up here (at the bottom of the page) to get Etsy investor emails, including whenever an employee or board member sells some of their stock, if you are interested in seeing how much money is involved.]

And this is exactly what Etsy should be afraid of. Etsy branding states it is so different from many other companies, but it is now getting mentioned in articles about excessive executive pay, right beside Amazon. 

That fear is probably what forced CEO Josh Silverman to walk back the previous statements on how much of the fee increase would go to more advertising, seller tools and enforcing site rules. He told the investors call on February 24th that “We expect to invest most of the incremental revenue into marketing, seller tools and creating world class customer experiences.” [my emphasis], and Slide 11 from that presentation says “most of” as well.

As I noted at the time, “most” means that some of that money is not going to go to things that benefit sellers. A percentage would go into shareholder pockets, meaning Etsy’s top execs and the board all benefit. 

However, in an interview with the Wall Street Journal after the strike started, he changed the story: “Mr. Silverman said the additional revenue from the fee increase won’t be used to pad Etsy’s bottom line, but instead will build out the company’s customer-support team and bring in more buyers.” It’s a notable revision, one that probably would not have happened if several thousand sellers hadn’t gone on strike and garnered substantial news coverage.

The only other Etsy response was a blog post reiterating what the fee hike money will go towards, and mentioning that “[i]n the coming months, we plan to update the Star Seller criteria, including review requirements, and introduce product improvements to make it more achievable for those who want to participate.” That is a new announcement, but it possibly was in the works before the strike, and involves the demand least likely to have any real impact on the average seller or on Etsy. So far, Etsy hasn’t budged much, if at all.

So what’s next?

Since Etsy didn’t officially respond to the strikers directly, some participants are currently mailing artistically-decorated envelopes with copies of the demand letter to Etsy HQ, and the idea of organizing something akin to a union in the near future is not off the table. As CNBC reported, “Since the strike kicked off, Cassidy said she’s been contacted by labor groups who’ve raised the topic of organizing sellers. Any next steps will boil down to what the seller community wants, she added”. 

Those who have dismissed the strike as inconsequential might want to keep an eye on the news in the months to come.