Critical hit! 75% of the funds of a group of sellers were forcibly withheld by the platform

With the chaos of service providers and the collapse of platforms, cross-border sellers are "passively" busy and overwhelmed. Recently, another platform collapsed: Etsy was exposed to have forcibly withheld funds from hundreds of sellers. Some sellers had their funds withheld as high as 75% of their sales for 90 days. As resistance was useless, they are planning to strike to protest the platform.

As a popular platform, Etsy is also a household name and is called a "high-profit platform" by many sellers. It has more than 90 million mid- to high-end customer groups, concentrated traffic, and annual sales of over 10 billion US dollars. Some sellers have sold 16 million single products.

Funds of a batch of Etsy sellers' accounts were forcibly withheld

Recently, Etsy was pushed to the top of the hot searches by the sellers on the platform because of the forcible withholding of funds in the sellers' accounts.

Hundreds of sellers reported receiving emails from Etsy , which roughly stated that account funds will serve as reserves to ensure the security of the market and pay any possible refunds.

Soon after receiving the email, sellers' funds were detained one after another. One seller opened his account and found that more than $10,000 of his money was detained by the platform. According to Etsy , 75% of the sales amount of these sellers' orders will be detained on the platform for 45 days.

In contrast, the situation of foreign local sellers is more serious. All the funds in some sellers' accounts have been withheld, and the retention period has even reached 90 days. A British ceramics seller said that a few hours after receiving the email, the platform withheld nearly 1,000 pounds of balance in his account, and he had no money to buy clay, glaze and other materials for production.

" Etsy has withheld around £7,000 of my funds and I am now relying on credit cards and family loans to maintain my business and daily expenses, " said a seller of custom wooden furniture. "If the payment reserve is not paid within 90 days, I will go bankrupt."

Many sellers don’t understand Etsy ’s approach , nor do they understand why the seizure came so suddenly. A seller at a custom underwear store complained: “I have been selling on Etsy for 4 years, and when I woke up, I received a message that my account was set to a 90-day retention period and the platform would withhold 75% of my sales. ”

Etsy 's sudden move was unacceptable to many sellers. According to Etsy's payment policy, the reasons for suspending payment include a sudden increase in sales, the store recently completed its first sale, the store "violated the policy" or "there are other risk factors." But the reality is that sellers believe that their stores have not been complained about and have not engaged in any improper behavior, and the platform's reasons for withholding funds are not sufficient.

The sudden operation of the platform has put many sellers in a difficult situation. Some sellers have no choice but to cancel their reserve orders due to lack of funds, while some sellers have directly set their stores to vacation mode.

In order to recover their funds and accounts, more than 800 sellers whose funds were withheld are planning to stop operations to protest Etsy's practices. On Facebook, there is a group called Etsy Reserve Strike, which has surged from 800 members to more than 1,100 members in three days. The Not on Amazon online group has also become a place for Etsy sellers to express their anger.

However, some sellers are worried that if they participate in the protest, their stores may encounter problems. One seller revealed: “You cannot challenge the bottom line of the platform, nor can you refuse to accept the terms and conditions of the platform, otherwise your account will be disabled.”

In fact, Amazon also has a similar reserve system, but the amount is generally 5% of sales in the past 28 days. Etsy 's 75% makes it difficult for many sellers to survive. However, an Etsy spokesperson said that only 2% of sellers have reserves in their accounts , and said that the reserve ratio will be adjusted in the next few days.

With annual sales of over 10 billion and high product profits, Etsy was once very popular

Founded in 2005 , Etsy is a household name in the United States, the United Kingdom and other European and American regions. Adhering to the original intention of "rejecting all mass-produced items", Etsy is committed to creating a unique market. It is precisely this original intention that has attracted countless sellers to Etsy and achieved remarkable results. Some sellers have sold more than 10,000 items soon after they joined; therefore, it has attracted a group of high-income consumers who have a sense of ritual in life and love handicrafts.

As of 2022, Etsy has 89 million active users, of which more than 70% are women, with annual sales reaching US$12.8 billion. It ranks 7th in the world in mobile APP shopping downloads, accounting for 60% of traffic, and 63% in PC website visits worldwide, accounting for 40% of traffic.

Unlike Amazon and other platforms that distinguish between different sites, Etsy users in all countries open the same platform, and the traffic is very concentrated. A seller revealed that if only the same product categories as Etsy are counted, Etsy 's traffic is likely to exceed that of Amazon and eBay in the same category .

In the first quarter of this year, although Etsy's profits declined to US$74.5 million, there are still many data worth noting in the financial report. Etsy's revenue increased by 10.6% year-on-year to US$640 million. The number of active buyers achieved its first increase since the fourth quarter of 2021, reaching 95.5 million. At the same time, the number of active sellers also increased year-on-year to 7.9 million.

Small but exquisite is one of the main features of Etsy . Etsy 's products only have 8 categories, such as clothing, accessories, home furnishings, toys, crafts, etc. The strange products are very unique, and most of them are only sold on Etsy . Differentiated products are favored by consumers and also bring higher premiums.

"A piece of jewelry that costs only a dozen yuan in Yiwu can be sold for more than 70 dollars on Etsy ," a seller revealed. A pillow that costs 10 yuan in Nantong home textile market can be sold for more than 30 dollars. However, Etsy also has certain requirements for products, that is, products with creative designs, handmade products, collectibles over 20 years old, etc. If the product does not meet the above standards, it is very likely to be removed from the shelves.

On Etsy , these products with a lot of fresh ideas have relatively high average order value, and some cross-border sellers with Etsy accounts have made a lot of money from them. "It's common to have a turnover of $1,000. In the past, Etsy really had high profits and made money quickly, " said a seller.

Some sellers have sold over 10,000 units soon after joining the platform, and have received over 2,000 favorable comments. Another ceramics seller said, “I have sold 16 million units of sales with just one product, and the total sales have reached 280,000 units.” It can be said that the sellers previously made a lot of money by relying on Etsy’s advantages of high customer unit prices and high profits.

Many Amazon sellers rely on Etsy 's popular product list to select products, and the results are quite good. According to sellers, many products on Etsy are currently selling well, such as virtual products that mainly build templates; model products that are popular with 3D cookie models; customized gifts for various scenes; jewelry made mainly of resin, stone, ceramic and metal; and art collections that support online printing. These are all popular products, and sellers who are interested can refer to them.

Etsy

Thunder

Funds Withholding