Online marketplace Etsy has come under fire as numerous sellers accuse the platform of causing significant financial strain on their small businesses. The controversy stems from Etsy’s policy of placing a “reserve” on certain sellers, withholding a substantial 75 per cent of their earnings for up to 90 days. The platform claims this measure is necessary to address potential complaints from buyers.
However, many sellers argue that the reserve policy is unjustified, even for long-standing traders with a clean track record. Adding to their frustrations, sellers claim that Etsy provides no specific reasons for imposing reserves, merely offering a generic list of potential causes.
Amidst mounting discontent, a growing number of sellers have turned to social media platforms like Facebook to discuss abandoning Etsy and migrating to alternative online sales channels.
Desperation has led some sellers to reach out to Kevin Hollinrake, the Minister in charge of small businesses, seeking Government intervention.
In response to the mounting pressure, an Etsy spokesperson defended the platform’s payment system, calling it “generous.” The company stated that the percentage of sellers impacted by the reserve policy is under 9 per cent, but with over six million worldwide sellers, this still amounts to approximately 540,000 businesses facing financial difficulties.
