Amazon isn’t the only e-commerce marketplace that is raising seller fees. Etsy has increased fees by 30%.
Etsy reported its financial results for its fourth quarter and full-year ended December 31, 2021 as well as included an announcement for a 30 percent seller fee increase from 5% to 6.5%.
For sellers, this item was tucked at the end of the press release, but we placed it upfront:
Etsy Marketplace Transaction Fee Increase
Etsy also announced today that its seller transaction fee is increasing from 5% to 6.5%. This fee change will go into effect on April 11, 2022.
The company said it’s planning to invest even more in making Etsy the best place to run a creative business. Etsy expects to invest most of the incremental revenue from this fee increase in marketing, seller tools, and creating world-class customer experiences.
“Etsy enables anyone with a creative idea to start a business and reach a built-in audience of more than 90 million shoppers. We have demonstrated our ability to make improvements that directly translate into more sales for our sellers, as evidenced by record sales per seller in 2021. Our new transaction fee will enable us to invest in key areas like marketing and support to further extend our strong momentum.”
As far as the rest of the earnings report, Josh Silverman added the following:
“Even in a world of greatly expanded choice, Etsy remained top of mind for consumers, leading to our delivery of record levels of GMS, revenue, and adjusted EBITDA in the fourth quarter. During the holiday season, our sellers — most businesses of one and insulated from widespread supply shortages or complex fulfillment processes — brought the benefits of shopping small to scale. Shoppers continue to love their experiences with Etsy and are coming back for more.”
Etsy Fourth Quarter 2021 Financial Performance Highlights
- Consolidated GMS was a record $4.2 billion, up 16.5% year-over-year; Etsy marketplace GMS was also a record $3.8 billion, up 11.8% year-over-year and 154% on a two-year basis.
- Etsy’s record fourth quarter GMS performance was driven by an early and strong kick-off to the holiday season in October and extended strength through December.
- Several exciting holiday records were set, including 8% year-over-year growth in GMS per buyer on Black Friday, a record 2,000 orders per minute on Cyber Monday, and nearly a half million seller shops participating in its Cyber sales, up 27% from last year.
- Etsy marketplace’s GMS per active buyer on a trailing twelve month basis was $136, growing 16% year-over-year. On a two-year basis, this metric is up 31%.
- The Etsy marketplace acquired approximately 10 million new buyers in the fourth quarter, its highest level of new buyer acquisition since the fourth quarter of 2020. The company reactivated 6.8 million buyers who had not purchased in a year or more.
- Habitual buyers, those with 6 or more purchase days and over $200 in spend in the trailing twelve months, grew 26% year-overyear, remaining its fastest growing cohort. On a two-year basis habitual buyers grew 224%.
- Non-US GMS for the Etsy marketplace was 44% of overall GMS, and increased 20% year-over-year on a currency-neutral basis.
- GMS from paid channels was 19% of overall GMS, decreasing 200 basis points compared to the fourth quarter of 2020 as the percentage of traffic from non-paid channels increased.
- Consolidated revenue was a record $717.1 million, up 16.2% year-over-year, with a take rate (i.e., Consolidated revenue divided by Consolidated GMS) of 17.1%.
- Net income was $161.6 million, up 8.8% year-over-year, with diluted earnings per share of $1.11.
- Non-GAAP Adjusted EBITDA was a record $218.8 million, with Non-GAAP Adjusted EBITDA margin (i.e., Non-GAAP Adjusted EBITDA divided by Consolidated revenue) of 31%, flat year-over-year.
- Etsy ended the year with $1.1 billion in cash and cash equivalents, short- and long-term investments. Under Etsy’s stock repurchase program, during the quarter Etsy repurchased an aggregate of approximately $68 million, or 287,368 shares, of its common stock.
Mr. Silverman added, “Reflecting on 2021, it is fair to say that Etsy has retained much of the positive impact we’ve seen from the dramatic adoption of e-commerce following the start of the COVID-19 pandemic. In fact, more than half of Etsy’s 2020 active buyers, and 37% of new buyers came back to make a purchase in 2021. In addition to gaining market share, driving excellent buyer engagement, building Etsy’s brand globally and helping our sellers grow, we continued to take care of our people, communities, and the planet. We’re also leveraging Etsy’s operational playbook for our most recent acquisitions — Depop and Elo7 — which, alongside Reverb, expand the reach of our overarching mission to ‘Keep Commerce Human’.”
“We capped off the year with top and bottom line fourth-quarter results ahead of our expectations, as Etsy’s capital-light business model drove high flow-through of incremental revenue,” said Rachel Glaser, Etsy’s Chief Financial Officer.
“We grew revenue and GMS over 30% for the full year, powered by product investments that improved conversion and repeat purchase rate, and by marketing investments that increased brand awareness and further drove buyer retention and frequency. Furthermore, we delivered full-year adjusted EBITDA margin of 31% even while adding two new companies to our “House of Brands” and increasing our team by 70%.”