Etsy Shipping & Handling Shuffle: Desperate Bid For Gross Merchandise Sales Bump

Liz Morton
Liz Morton


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Etsy is removing the option for sellers who use calculated shipping to add handling and packaging costs to the shipping price, claiming it will improve the buyer experience while conveniently leaving out it will also likely boost an important financial metric for the company with no extra sales needed.

The change will be going into effect March 3, 2025 and will automatically remove handling and packaging fees from calculated shipping prices at that time.

Updates to Handling and Package Fees
Starting March 3, 2025, we’re removing the option to charge handling and package fees. If you use calculated shipping, you won’t be able to add these fees as part of your shipping prices.

To account for these costs consider moving them into your listing prices while keeping the total price the same. This keeps the profit you make on your item the same while helping better meet buyer expectations.

These changes only apply to sellers using calculated shipping. Your handling and package fees will be removed automatically, so you won’t need to remove them yourself.

Review your pricing strategy on your shipping profiles that have handling and package fees in advance of this change.

Interestingly, the email notice sellers received leaned heavily on the idea that the change is being made because buyers are averse to seeing high shipping prices and having handling and packaging fees added in could discourage shoppers from completing purchases.

But that would seem to contradict Etsy's own statements in the policy page about the change which encourage sellers to "consider moving them into your listing prices while keeping the total price the same."

If the total remains the same, the impact on whether or not buyers make a purchase will likely be barely noticeable - unless Etsy believes consumers are too stupid to be making purchasing decisions based on the total price, in which case I would suggest they have completely missed the basic psychological lessons every ecommerce operation has learned about "free shipping" in the last 2 decades.

So what's really behind this handling and packaging fee shell game?

Some in the Etsy Seller subreddit have suggested the company could be looking to mitigate costs they have to cover under the Etsy Insider buyer loyalty program.

I wonder if this has to do with Etsy Insider. Since Etsy is covering shipping for those purchases.

I was wondering about their costs on this. I just had an Insider customer order an item from me. Then a day later order again. Two shipping costs Etsy has to pay for. Can see this kind of stuff adding up real fast for them since customer no longer cares

I wonder if they are doing this so that they can save on shipping when they reimburse the sellers for shipping fees when a customer has the Etsy Insider Club.

I bet Etsy didn't care about what we charged to cover our packaging until they had to start paying higher shipping fees due to those fees we can price and have. I hate how they spin it as a way to help the sellers, when in fact it's to help themselves.

That's certainly a plausible theory and could be one contributing factor.

But it's also important to note that this simple change will allow Etsy to boost a very important metric in their financial reports to investors - Gross Merchandise Sales - without having to do anything to actually increase sales!

Etsy defines GMS in their quarterly and year end reports as "the dollar value of items sold in our marketplaces, excluding shipping fees and net of refunds, within the applicable period."

That means package and handling fees added into the shipping price are currently not counted in GMS....but they will be once sellers have to shift that amount to the product price to still cover their costs.

And as Etsy seller and ecommerce consultant Cindy Baldassi points out, sellers with many listings to change will likely start editing their prices early to avoid being caught out when the change happens - which may allow Etsy to start to see that GMS bump even before March 3rd.

It's a desperate move that will muddy year over year GMS comparisons for at least the next year, which should raise alarm bells for Etsy's investors - if CEO Josh Silverman is resorting to the tactics to goose numbers, that does not bode well for the company's future ability to grow GMS authentically be increasing sales on the platform.

How will this change impact your Etsy business - will you shift the package and handling cost to the item price or eat them as a cost of doing business? Let us know in the comments below!

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Liz Morton is a 17 year ecommerce pro turned indie investigative journalist providing ad-free deep dives on eBay, Amazon, Etsy & more, championing sellers & advocating for corporate accountability.

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Noe's Attic Online
We'll be switching to keeping the commercial discount in order to cover the packaging and employee costs. If they remove that option, we'll have to raise prices.

Recent Comments
Avatar PlaceholdereCommerce Pro6 hours ago
Bonanza (or bMarketplace, or whatever they want to call themselves this week) is FINISHED.

They just "killed the golden goose". I imported my 1500+ eBay items to there since it was free. Turned out just to be a lot of work for (maybe) 3 sales a month.

The total fees were higher there before this new $20 a month cost structure, even though they claimed otherwise. When one factors in the 3.49% + 49 cent PayPal processing fees so one can get paid, there went a good chunk of profit.

Now they have boosted their commission to 11%, and still claim that the cost to sell there is less than eBay's. And remember that this does not include payment processing. WHY?? Makes no sense at all.

On eBay, for $27.95 a month, I sell over 100 items there every 30-31 days. Makes ZERO SENSE to pay a site $20 to make just a couple of sales. Since they now allow 50 "free listings", I have trimmed my offerings back to just below that amount. Also had to raise all my prices accordingly to absorb the extra selling costs.

The people who run the show here obviously didn't realize that eBay sellers who imported their listings gave the site a great depth of product, which would attract more buyers. Now that will be gone, because NO ONE will pay them $20 monthly for little to no sales.

The site also has technical issues that they refuse to fix. It was a decent resource to enable the occasional sale, but they will soon be stacked onto the eCommerce trash heap of companies that THOUGHT they could compete with Amazon and eBay. Etsy may also suffer the same fate soon, as many sellers are also leaving their site due to high fees, website issues, and poor management.

Basic eComm rule here: When you do not carry any inventory, and sellers are solely responsible for supplying your site with the goods offered, DON'T BITE THE HAND WHICH FEEDS YOU!!!
Avatar PlaceholderMksowa2 days ago
They need to fix a very broken system full of nasty attitudes. The patrons no longer matter.
Avatar PlaceholderMarty_J2 days ago
Was just checking to see if it would post without creating an account but….
eBay seller since 2022
Just started selling about a year and half ago

800 items sold 99.7 feedback

Recently I went away for family things for 30 days set my acct to be away … got back with items not received cases opened

I wasn’t able to revise existing listings post new listings OR refund the buyer from my eBay funds …

The items were caught up in recent wild fires but ended up being delivered late. I had to beg the buyer to let me pay them off of eBay to close the case because it was on hold and I wasn’t able to refund them from my eBay acct etc…. So luckily they obliged and I did … but ever since then my acct must be strikes as high risk because funds have been on hold 3 days after delivery since then indefinitely might I add… I get the run around everytime etc etc FINALLY I got someone saying it’s temporary it’ll be back to normal etc. these r all reps from escalated departments… one lady told me that with my history and feedback I’ve proved beyond doubt that I’m reliable seller and shouldn’t be on hold she put in for a appeal never heard back got the run around for another few months… they keep telling me I’ve been chosen for the new update they r rolling out total BS … do you believe that sellers will stay on eBay with these holds ? No they will simply go to another platform … they r 100% making money on the holds and use any reasoning to tell you basically no and keep profiting…. The get around is creating a new acct… these cases were closed without eBay having to step in and might I add I lost $$ and its been truly frustrating esp since I’ve built the acct up but I know I can do it again.. when they tell me its going to happen to all accts I just mention how my brother just opened one n now has immediate payments they don’t know what to say I don’t think they really even know.,, its sad n scummy but I see a class action lawsuit coming honestly ! I don’t know💬 if I forgot anything but well written thanks for the information. Have a great one!