Off the top, I want to say that the details about offsite ads mentioned here are the most basic facts- just enough to give context for today’s episode. I encourage you to read the full and complete article Etsy released about it and form your own informed opinion. Please read the details on Etsy here.
The offsite ads are still new, so this is still an evolving topic, and we don’t have years of data to use right now.
As it stands, I think these ads are a massive asset to sellers.
Etsy offsite ads are ads placed around the internet to specific Etsy products. If someone clicks the ad and that results in a sale within 30 days, the seller is charged a fee. That fee will be between 12-15% depending on their shop’s revenue.
There are two brackets of sellers to be aware of. Sellers who haven’t generated more than $10,000 in revenue in the past twelve months, and sellers who have. Those who have not can opt-out of these ads (not participate). Those who have cannot turn the ads off in their shop (must participate). HOWEVER, we will discuss how sellers above this threshold can ‘opt-out’ later.
Early on, I formulated the opinion that the offsite ads are an asset to sellers. A perk, if you will, to selling on Etsy. I think you should opt-in!
Understand the pricing structure
Please do your own research on this to make the best decision for you. That might mean raising your prices, it might be waiting and seeing what happens. Be thoughtful there, though, and see the bigger picture.
I think it’s hard for sellers to understand the benefits and the fee structure WITHOUT having the first-hand experience with running paid ads. If you have no background or context for paid ads, it probably feels like a steep fee.
I want to try to give you some perspective on WHY Etsy is charging what they are charging for these offsite ads.
Nowhere in the world of advertising (that I am aware of) do you only pay any fee if a sale is made. In the spaces that people would likely go to for ads like Facebook or Instagram, you are paying just for your ad to be seen. Even Etsy’s ON site ads are pay per click. Some ads charge per impression! There is no guarantee of a sale, but you’re still paying.
I have run Facebook ads, and it’s not easy or cheap. You are paying for a lot more than just the CPP or cost per purchase.
what if you run your own ads?
If you were to run your own paid ads, you would have more freedom and flexibility in what you advertised and how. Regardless, you would have all of the following expenses:
IMPLEMENTATION – you’ll have to learn – which will cost time, money or both – how to run effective ads. Or you’ll have to hire someone who knows. Personally, I would never DIY this. The skillset is particular, and there is an entire vocabulary specific to running ads. It is a specialty skill. There is also quite a bit of math involved, and to that, I say no thank you.
TESTING – this is money spend on ads simply to find out if they work. Lots of testing of copy, creative, and placement, among other things, determine if an ad is worth investing more in.
CPL – Cost per lead – money spent to generate leads… they may or may not purchase.
There are more, but you get the idea: Etsy is holding the burden of costs and effort and energy and strategy for running the ads. Sellers are entirely HANDS OFF. (Worth mentioning: Your portion of work here is whatever you list in your shop, if you would organically market the items in your shop as-is, then you pretty much “approve” of the ad creative and copy – you created them.)
lets talk about those 3 benefits
And that right there is the first benefit most sellers missed about the Etsy offsite ads is that Etsy is holding the burden.
The money you have to pay someone to run them properly for you protects you from wasting more of your cash DIYing it when you don’t know what you’re doing. In Etsy’s offsite ads, you aren’t paying for this. They are. And you aren’t being charged unless they get a result.
Etsy is holding that burden for sellers – THEY are paying for the experimentation and testing of the ads and the educated force behind implementing them.
If you were to add up and divide out all the costs per purchase in a DIY ad running situation, I bet it would come close to if not exceed the amount Etsy is charging.
understand the value
The second benefit that many sellers missed is that there is tremendous value in these for sellers long term.
Etsy referring a sale to you for a fee of 12-14% is a fantastic value if you consider that you now have a new customer. A new potential repeat customer, a new ambassador of your brand… If someone is referred by an ad and buys within 30 days, you are paying the fee. After that, though, if they return to your shop organically or through their own sales history, for example, you wouldn’t be paying the fee again.
you have a choice
The third thing about Etsy offsite ads that many missed is that it is FACTUALLY optional for ALL sellers to participate in these ads or not. Is this a benefit that same way the others on this list are? Probably not but options NEVER suck.
Many people aren’t going to like this but, sellers CAN opt out of these ads at any revenue level. If you are below the threshold you can turn them off easily. If you are above it, you can choose not to sell on Etsy.
Plainly, that is the truth. Selling on Etsy is NOT compulsory so, therefore, participating in the offsite ads is optional by way of Etsy being optional. In case it needs to be repeated, we think you should make Etsy part of your business plan and we are okay with the ads.
Always look to grow your brand
If sellers are bothered by the fact that their opt-out is to close shop on Etsy that tells me that Etsy is valuable to them. If the thought of NOT having your Etsy shop is bothersome, that tells me that Etsy is an asset. Sellers need to recognize that they should always A- be using Etsy to grow their entire brand and business not just on Etsy but BEYOND Etsy as well and B- they probably haven’t been if they are bothered by Etsy changes. Of course, there is a period of adjustment with any change, anywhere. But after ten years of witnessing the general drama that surrounds Etsy changes where a bunch of people threaten to close shop and then promptly don’t… I think we need to let the changes happen and make the best of them.
Etsy is allowed to evolve and change their platform. It is still the most valuable tool available to Handmade business owners based on the cost to benefits evaluation.
Price for profit
Also, I feel like we need to mention that pricing is huge here. You need to price for profit while still allowing yourself and your brand to grow and change… no matter where you sell, at some point you’ll want to advertise. And it will probably cost. I understand that some of that cost might feel a bit better when you are in total control, but how wonderful when you can be hands-off? Pretty wonderful.
For me, it seems like a drastic decision to hate on Etsy for this – and certainly to leave Etsy over it. But you’ll need to sort this one out on your own.
We know how powerful Etsy can be as a tool in your business – but don’t believe it has power OVER you. It doesn’t. You are still in control of where you do business. Etsy is also allowed to evolve and do business as well. Remember that is one of the things we need to normalize — other businesses doing business.
I am happy to know that Etsy continues to evolve and keep up with the times… I don’t want to do business with a business that sits around and doesn’t evolve. For what we CAN get out of Etsy if used properly, all of Etsy’s fees are very reasonable. Use Etsy wisely, and you will be happier.