Etsy Strike: Why Are Sellers Protesting And What Could It Mean For The Stock

A trending topic on Twitter Inc TWTR Monday and Tuesday has been #EtsyStrike, a boycott of the e-commerce site Etsy Inc ETSY. Here’s why sellers on Etsy are leading the boycott of the site.

What Happened: On Monday, April 11, 2022, a new fee increase went live for sellers on Etsy. Announced in February during the company’s quarterly earnings report, Etsy said it was raising its seller transaction fee from 5% to 6.5%.

“We’re planning to invest even more in making Etsy the best place to run a creative business — in fact, we expect to invest most of the incremental revenue from this fee increase in marketing, seller tools, and creating world-class customer experiences,” Etsy CEO Josh Silverman said at the time.

Sellers on Etsy were not pleased with the transaction fee change and have put their shops "on vacation mode" on the site since Monday. The planned strike was led by several sellers on the platform and more than 5,000 shops have pledged to participate in it, according to NPR. The strike takes place from April 11 to 18 and Etsy Strike has asked buyers to boycott Etsy during that time, according to the Etsy Strike site.

“Etsy has become a downright hostile place for authentic small businesses to operate. For both full-time and part-time sellers alike, the changes on Etsy have brought many of us to the brink of financial ruin,” Etsy sellers said in a letter sent to Silverman.

Related Link: Chart Wars: Between Etsy And Pinterest, Which Stock Looks Set For The Larger Reversal

Why It’s Important: Among the argument from sellers on Etsy is the fact that Etsy saw record profits despite the COVID-19 pandemic.

Other sellers point to Etsy now offering off-site advertisements that see costs pushed to sellers when sales are made based on the ads.

Etsy ended the fourth quarter with 7.52 million active sellers, up 72.3% year-over-year. The company had 96.34 million buyers in the fourth quarter, a figure up 17.6% year-over-year.

Etsy has also beat analyst expectations for revenue in 10 straight quarters, according to data on Benzinga Pro.

While Etsy could see its revenue and earnings get a lift from the increased fees, the company could have a problem with the number of sellers and products on the site if the boycott/strike does not go away.

Etsy also risks the potential of more attention being put on the strike, which could cause some buyers to shop elsewhere.

ETSY Price Action: Etsy shares were down 3.64% to $112.95 on Tuesday at market close. Etsy shares have traded between $109.38 and $307.75 over the last 52 weeks.

Photo: Scott Beale/Laughing Squid via Flickr Creative Commons