Etsy will raise its seller fees from 5% to 6.5% (a 30% increase), the company announced during its Q4 2021 earnings report. The new seller transaction fee will take effect starting on April 11.

Why we care. In many cases, Etsy’s seller fees are still lower than eBay’s and Amazon’s, but the margin is getting thinner, which may also erode some of the benefits of selling on Etsy. 

Etsy last increased its transaction fees in 2018, raising them from 3.5% to the current 5% rate. This latest increase may be a bitter pill to swallow for Etsy merchants, especially when other marketplaces may offer access to more customers or more sophisticated tools for sellers.

However, some of the additional revenue from the fee increase will be reinvested (more on that below), which may offset the impact on sellers by improving the customer experience, potentially increasing customer lifetime value.

Etsy’s plans for the added revenue. “We plan to reinvest a considerable portion of that incremental revenue back into the marketplace because we want to directly have that benefit the seller,” said Etsy’s CFO, Rachel Glaser, during the company’s Q4 2021 earnings call, noting that much of the additional revenue will go towards marketing, customer support and product development. 

“Keep in mind that the higher take rate is also expected to drive our LTV [customer lifetime value] higher so we can invest in more ways that benefit our sellers,” she added.