Don’t Get Your Etsy Account Closed : Understanding Etsy Fee Avoidance

Every few days we either get a message from a potential client or read about Etsy sellers that have had their accounts suspended. These suspensions are usually permanent and have a devastating consequence to sellers now making a full time living from their Etsy store.

There are quite a few reasons why Etsy can close a store (and some sellers proclaim they do it sometimes for no apparent reason!). One of the more common violations that gets sellers kicked off of Etsy is what they refer to as “fee avoidance“. This term is used to encompass any activity taken by a seller to direct sales of product or services off of the platform thereby depriving Etsy of their commissions and other fees like listing fees, payment fees, etc.

As a seller you may be like “what?! I don’t get it!”

Etsy states specifically in their legal terms this:

What Is Fee Avoidance

Any action by a seller to avoid paying a fee is considered fee avoidance and is strictly prohibited by Etsy. This includes, for example, encouraging buyers to purchase an item in your Etsy shop through another venue. A transaction initiated on Etsy may not be completed off of Etsy. The price stated in each listing description must be an accurate representation of the sale. Sellers may not alter the item’s price after a sale for the purpose of avoiding Etsy transaction fees, misrepresent the item’s location, or use another user’s account without permission.

Of course Etsy is a business that thrives on the bits and pieces of every transaction that takes place when you sell on their platform, and those fees add up fast!

Initially, for years, no sellers really begrudged Etsy for their fees and you saw very little complaining on various forums about the actual fees….. that is until recently when they introduced “off site ads” (more about that soon)

So now more than ever, it’s tempting to figure out a way around the growing fees and how make more money.

What are sellers doing to get banned on Etsy with fee avoidance?

The most common scenario is where a customer contacts an Etsy seller about an item. The seller then directs the customer to their own site to purchase the product or instructs the buyer to pay via PayPal or other off site payment service.

There is debate on whether or not other methods of selling actually qualify as fee avoidance such as meeting someone in person who found your product on Etsy, and doing a transaction locally. So clearly the waters are a bit muddy when it comes to what ETSY thinks is fee avoidance and what sellers understand as fee avoidance.

Here’s a discussion by Etsy Sellers on the Etsy site (link)

What is Etsy’s take on selling on your own website?

Is selling on your own website considered Fee Avoidance?

Of course not!  Sell wherever you can & wherever you want!

We tell our clients is, having an Etsy shop should just be part of an overall business plan and selling plan. There are many alternatives to Etsy including opening up a branded shop / e-commerce site.

So does having a website actually conflict with the Fee Avoidance rules on Etsy? Usually not, but that depends.

Firstly the general rule of thumb is that you cannot direct people to your own shop off of Etsy if you sell the same items as you have listed on Etsy. While this seems to be wildly accepted, you never know when Etsy will change their rules and prohibit such activity.

You might wonder how they know if you’re selling on your own site. Good question! They generally do not know (or care). The gray area comes when a seller on Etsy starts branding their images, text, watermarks, and such with their own website / shop URL. So following the rule of thumb of not selling the same items, from the general selling community, that there is no violation.

But wait, you want to sell the same products?

We have a client that built a beautiful shop with us and lists the exact same products (and prices) on Etsy. They are fully aware that this could be breaking the rules since all images on Etsy are watermarked with their domain name / e-commerce shop.

This hasn’t been a problem YET. However, we expect it could be some day, especially if someone complains.

In summary our recommendation is if you want to own your own website and direct your Etsy shoppers to it for things such as more information about you as an artist or to build your mailing list and capture people’s email addresses, that’s great! Just beware of selling identical products.

If you want to operate your own off site shop or e-commerce store, DO IT! It’s a great way to expand your reach and your business. Just be careful how you direct people to your own shop when working with Etsy so you don’t risk getting shut down for Fee Avoidance.

We can walk you through all the scenarios imaginable for integrating your own e-commerce selling with an Etsy selling business. So, open your own shop and don’t rely only on Etsy for your business. Learn more here.

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