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Is Etsy Pandemic Profiteering?

There is no denying that the pandemic has been incredibly good for Etsy. In 2020, they more than doubled their gross marketplace sales.  In 2021, they kept those pandemic sales gains and broke their 2020 record by $3.2 billion dollars.

In February of 2022, they sent a press release to their investors, which had been previously announced on February 10th. This press release reviewed a stellar fourth quarter and full year 2021 results, with a few paragraphs in the middle announcing the planned fee increase.

Etsy Investor report, 16:05 (4:05PM) Eastern Time

Approximately 15-20 minutes later, the Etsy sellers involved in our project found out about the fee increase thanks to this email:

Etsy email to sellers, 4:22PM Eastern Time

Love your priorities, Etsy.

It’s really interesting to compare the two releases – the email sent to sellers vs the report sent to investors. Did the email piss you off? You should read the investor report.

Etsy brags about things like having a “capital-light business model”, how they ended the year with “1.1 billion in cash and cash equivalents”, that they worked on “improving chargeability for Offsite Ads”. And, of course, they mention the competitors they acquired in 2021.

In June of 2021, they acquired Elo7, the “Etsy of Brazil” to the tune of $217 million dollars cash.

In July of 2021, they completed acquisition of Depop, a British fashion marketplace, to the tune of $1.625 billion dollars, primarily cash.

All this is followed by the announcement of the fee increase, where there is no mention of the money specifically being used to advertise to buyers (why would they, if they can simply continue to improve “chargeability for Offsite Ads” to ensure we pay for their advertising to buyers).

The investor report ends with a quote from Josh himself about how the money from the fee increase will be used to “further extend [Etsy’s] strong momentum.”

We think so.

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