Etsy sellers consider forming an union after transaction fees were hiked

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Etsy (NASDAQ: ETSY) is facing pushback from a growing number of sellers on its online platform over the higher fees being charged.

Some Etsy (ETSY) sellers have argued that the higher fees make it harder to turn a profit. The group would like to see Etsy (ETSY) cancel the fee increase and allow sellers to opt out of the Offsite Ads program. Thousands of Etsy sellers went as far as to put their sites in “vacation mode” last week in a protest over the fee increase. An online petition on the Etsy (ETSY) fee increase has gathered over 80,000 signatures. There have also been discussions about forming an Etsy (ETSY) union after seeing the way workers at an Amazon warehouse and several Starbucks stores organized.

The dissatisfaction with sellers ramped up on April 11 when Etsy (ETSY) boosted the transaction fee for sellers to 6.5% from 5.0% with a stated goal to fund improvements in marketing, customer service, and seller tools. On top of transaction fees, Etsy sellers also have to pay listing fees, payment processing fees and shipping fees. As part of the company’s Offsite Ads program, Etsy sellers are also charged an additional fee between 12% to 15% anytime shoppers make a purchase after clicking on an ad for their product.

On Wall Street, analysts approved the move by Etsy (ETSY) to increase the seller fee. Guggenheim analyst Seth Sigman said the move is likely to ultimately benefit everyone on the platform in the long term with the extra revenue being invested back into the company.

Shares of Etsy (ETSY) have trailed the return of the S&P 500 Index and the retail sector as a whole this year.

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