Olin Expert: Irked Esty sellers’ strike is part of ‘workers flexing their bargaining power’

Etsy sellers are taking their battle with Etsy Inc. public this week to protest higher fees and other changes the company says are necessary to compete for shoppers.

Starting Monday, April 11, thousands of Etsy sellers put their shops on “vacation mode,” urging customers to boycott the platform for a week.

Etsy is a global online marketplace where people come together to make, sell, buy and collect unique items. People create individual virtual storefronts and sell millions of items including art, jewelry, face masks, furniture, pottery, on and on.

Etsy CEO Josh Silverman announced in February that, while sales and revenue were at all-time highs, transaction fees would increase 30% in April. Sellers, in turn, organized a collective strike through the platform Coworker.org.

“I think this is one more instance of workers flexing their bargaining power. We see this playing out in the broader economy in the form of rising wages and ‘the great resignation,’” said Kaitlin Daniels, assistant professor of supply chain, operations and technology at Olin. Her research focuses on the operations of gig-economy platforms and the resulting impact on consumer and service provider welfare.

Just the latest in a series of changes for sellers

The fee increase is just the latest in a series of changes that irk Etsy sellers.

“It’s worth noticing that Etsy worker complaints extend beyond the fee increase,” Daniels said. “They are also demanding changes to the Star Seller program and the offsite ads program.”

The Star Seller program rates sellers’ customer service, e.g. responding to 95% of emails within 24 hours. Etsy’s discovery algorithm prioritizes sellers in part based on their Star Seller status. 

The offsite ads program allows Etsy to promote sellers through paid ads on other websites. This program automatically charges the promoted seller a 12% fee (about twice the usual fee) if the ad produces a purchase. Most sellers cannot opt out of these offsite ads.

“These programs restrict how sellers run their Etsy business, which limits sellers’ flexibility in how they balance their Etsy work with the rest of their lives. Since flexibility is one of the main reasons people say they work gigs, it is not surprising that these programs are unpopular.”