Etsy sellers are furious over new mandatory ad fees
mashable.com
mashable.com
That's not exactly what I think when I read "biggest sellers". That seems like a remarkably low cutoff.
Also, if you don't need/want to grow and/or you have low margins, this could wipe you out. 12% revenue of _any_ orders within a 30 day period of an ad click[1], effectively at Etsy's discretion (how can you challenge that someone clicked, or disagree with how hard they are pushing your products - especially noting that they have a binding arbitration clause[2]), could be a huge percentage[3] of your total sales.
[1] "If such advertising includes your listing, a buyer clicks on it, and then places any orders from your shop within 30 days of that click, you will be charged an advertising fee on these orders" https://www.etsy.com/uk/legal/fees/
[2] s.11 https://www.etsy.com/uk/legal/terms-of-use#etsydisputes
[3] Up to $100/order - "There is no limit to the number of Offsite Ads fees you may be charged on Attributed Orders, but the total Offsite Ads fee you’ll pay on a single Attributed Order will not exceed $100 USD." https://www.etsy.com/uk/legal/fees/
Yes, fifty percent.
Pay a few pennies, make 12% of the sale.
On the other hand, this is nutty for any business running on low margins or with limited supply (and a sufficient customer base that they don’t need advertising to sell out).
A lot of small business owners aren’t great at marketing, and having a push button solution is great. Forcing your larger sellers into something that might not even need is borderline predatory.
When I clicked through to read their announcement I assumed they’d address some of these concerns, but nope. So, if I run a low margin shop and make 10% on each sale, I’m now underwater by being Etsy.
I've written them off completely now. All of these aliexpress, etc dropshippers are ruining all of the retail sites.
2'x4' painting for $160, ships from china, comes in 6 different sizes
https://www.etsy.com/listing/637298037/original-sea-waves-oi...
I used to deal in high-end organic foodstuffs, and we sold nothing below 50% margin. "Sure, you can by other olive oil for 1/10th of our price. But you can't buy this olive oil"
Every other marketplace charges 10-15% - Etsy has been a bargain for years. Even eBay will cost a seller more than Etsy, and no one's complaining about that.
And even if price optimization is what's good for what ails everyone and we just didn't know we all need to pay 12% more, the result of this lesson underwrites Etsy while complicating everyone else's life. Um, thanks?
[1] Just one of many points one can make here - a large number of crafty folks are very much not profit-maximizers. I know this is true for me (I don't sell on Etsy) - running my hobby like a business would be stupid, because not only will my day job will always pay better, but more importantly, chasing fashions, accounting and caring about competition would suck all the fun out of it.
Let's take handmade jewelry for an example, because I happen to know that somewhat. Unless you want to do luxury goods, you're talking mostly beading & wire wrapping. There's a very clear ceiling on the price by mass-manufactured goods from mostly Mexico.
People still want to buy handmade in the US, because they can talk to the seller, because they can influence the design somewhat, because it has a feelgood factor. That gives you room to charge a small premium. That premium, however, is limited. Demand for jewelry is fairly price sensitive, especially given that there's a fallback good that's almost as nice at a lower price.
And so there is both an upper limit to the price you can charge, and an upper limit to what you can produce. (You could manufacture, but it's fairly easy to tell, and so you lose the "handcrafted" clientele)
Yes, in a rational market, you'd fold up and move to higher margins. We know for a while now that markets aren't rational. And the craft market especially is deeply suffused with all kinds of emotions. So, no, that's not going to happen either, because people like making stuff with their hands, and this particular market allows them to finance that.
Maybe save the glib advice next time and ask some questions first?
For eg custom keycaps - what should they cost? i've seen anything from 60USD for brass moulded ones to 200USD for resin ones with miniature landscapes in them(that sell out literally within 1 minute of listing)
This is a pretty good question. If you sell handcrafted hard maple tables that go for $5k, it only takes two orders and you're suddenly coerced into a program.
However, if that program leads to one sale more it only cost $500 - that's a pretty good ROI. The problem will be if Etsy is transparent and can demonstrate the incremental value of this service, and that it's just not cannibalizing existing sales.
Not if you don’t have time to make another table...
Just because the margin of sale price over COGS is high doesn’t mean that — after factoring in the cost of labor — it’s a high-margin endeavor.
Edit: typo fixed
I've sold hundreds of millions of merchandise over the last decade. Think I understand just fine, thanks.
> doesn’t mean you would want to “buy” another sale for $500.
Of course you do, this is why it's called business. No one is on Etsy because they don't want to make money, and most people I know have excess labour and are willing to trade that for money.
> after factoring in the cost of labor
This isn't how cash flow works. You cannot get fixated on the margin of a single order, but on the blended margin across all orders.
A few years later, and I think she just barely qualified for that $10k this last year. So she went from pure hobby to being classed as one of the "biggest sellers" in just a few years.
I don't know how many people get to that point, but what she's doing isn't particularly unique. Literally anyone could do it if they have enough control of their hands and enough free time.
TL;DR: The 10%-margin shop doesn't exist; they already went out of business.
Exactly, just comes off as crocodile tears to me. This is a red herring and distracts from the real issue of not being able to opt-out of Outside Ads.
I'm willing to wager that not allowing opt-out is the only way they can reach a saturated-enough product catalog to make advertising profitable.
We made the tools mentioned in this article - the ads console and search ads. It was basically first party promoted listings where you could bid on keywords in the internal site search. We also let sellers opt into ad campaigns run through google and facebook that we helped manage through a console. It was all optional, and it was a decent equalizer for smaller shops, although it was mostly used by large shops iirc.
I have no idea what the hell they're thinking with this. This is downright hostile to sellers. I spoke to a nonzero amount of sellers who were against advertising as a concept - they didn't want to be part of that machine (I think quite a few of us here can relate). Now they have no choice but to pay Etsy for this. It's a huge middle finger to the sellers and that made Etsy rich and who Etsy continually takes advantage of. This is mafia-esque style extortion where they say they're doing this for you as they take your money.
This kind of stuff is why tracking is so pervasive. Etsy is relying on being able to uniquely track a shopper for at least 30 days to make this work.
to the tune of ~$100M?
Etsy’s low was in early 2018. At under a $1B market cap.
It’s isn’t aimed as a response to OP. Just my own posting numbers.
I wonder what the data on incorrect tracking is (i.e. Does it lead to more false positives, or false negatives)?
As an advertiser, in general you need to watch out for things like cookie bombing where a network carpet bombs a large number of people as cheaply as possible in hopes of tagging your customers who would have bought any way and inflating their performance.
The other concern is retargeting. As an advertiser, I'm incentivized to run incrementality tests on things like retargeting that tends to cannibalize attribution of conversions. This helps ensure I'm not wasting impressions on people who would have purchased anyway.
From what you posted, it sounds like Etsy may actually have an incentive to explore these tactics because they control all the data, transparency on targeting and tracking, and what products they feature.
So in a hypothetical (not saying this is happening), if they need to dial up revenue, they could filter for high priced items that sell well on their own (regardless of the margins of the seller), retarget anyone they can who visited the seller's page before, and claim credit for people who may have bought without it.
All of that said, the percentage they are taking from this alone is not much and may not actually offset the media cost in all cases to deliver a positive ROAS. But I would be surprised if they haven't already tested this and run those numbers.
It sounds like the sort of thing a 1930's Chicago gangster would think up.
It's like when Mikey No Thumbs shows up once a month to pick up a fat wad of cash in a plain brown envelope. And you'd better not be light this month. We know how much you sell.
By auto-enrolling everybody and requiring them to opt-out, that’s creating a huge controversy just asking for backlash. And then forcing anyone who makes over $10k to now be required - that’s a strong hand they’re playing.
Can only point to some desperate times? Seems to be a sure way to alienate your most successful sellers.
I assume the logistical reason they're doing it is because they need ad volume for negotiations.
That doesn't make it "right" or even good corporate strategy (although I suppose it might be), but I can see why they'd do such a thing.
If they're not, the only way to enroll would be this approach.
Their strategy doesn't preclude the possibility of the former, but it sure signals the latter.
It seems to me that online marketplaces like Etsy find their early success by bringing buyers and sellers together and just letting them do their thing, but as the marketplace becomes more established it's relationship with sellers inevitably turns adversarial.
I feel like we need some form of regulation to limit how marketplaces like Etsy can dictate how their sellers conduct business. Amazon has a program that allows "business" customers to place an order and pay the invoice 30 days later. Since Amazon only pays out every 2 weeks, this means I can be made to wait up to 6 weeks to be paid for an order. There is no way to opt out of this and I would be penalized if I refused to ship these orders.
I can see why people would be frustrated, but you're getting a whole lot for using their service.
I halfway agree, and halfway feel the opposite: We need to restore teeth to our existing regulatory bodies, and we need more competition. We need to reduce barriers to entry, and stop the anti-competitive behavior behemoths like Amazon have been exerting for years now.
1. Build your own. 2. Collectively organize with other Etsy shop owners to advocate with Etsy leadership.
These type of policy changes aren’t a surprise anymore, no? We’ve seen them from Apple, Facebook, Shopify, Twitter, Amazon, EBay, etc for more than a decade now.
We are working with them to build an Airbnb alternative but all sorts of marketplaces can be built.
That's crazy. Etsy is not the market, it is a market. If you don't like it, you move somewhere else.
We already have too much regulation that for some fields it's impossible to start a business without jumping through many hoops. Last thing we need is to start regulating on a per-business basis.
This is really a case of giving up your store brand/independence for convenience. Starting an online store is not hard these days, everybody should host their own if they are serious about their business.
But ultimately the suggestion to build your own is definitely the best move you can make. Etsy will always focus on their own SEO before anyone else's.
They can fight back by
> But ultimately the suggestion to build your own is definitely the best move you can make.
Sufficiently big _a_ thing becomes _the_ thing because of economies of scale, network effects and "the software is eating the world" effects.
See Google, Paypal, Microsoft, Facebook, Twitter, and so on.
It happens all the time. Big, unstoppable companies become sloppy and complacent, and suddenly find themselves in free fall.
That mostly happens when the 'nimbler competitors' are in fact armed with a completely new technology, business model, etc.
ie, innovation is the key to change, not just decay of the old making way for more of the same, but more vigorous.
Etsy is small potatoes compared to those companies. It's the most easily avoidable of the bunch. If Etsy makes a truly stupid decision and sellers revolt, they'll be on life support before the year is over.
Yes, and if you don't like existing regulations you can just move to another country with different laws. No big deal, right?
I do operate my own site in addition to selling on multiple marketplaces, but even with my efforts to diversify I am dependent, in part, on the sales I get from Etsy. I would be in a lot of financial pain if I lost that revenue stream, so "just move somewhere else" is not really an option.
Sometimes regulations are necessary to keep big companies (Amazon, Ebay, Etsy) from abusing their customers (including small time sellers like myself). Regulations may not be the answer in this case, but it's at least worth discussing.
If you come up with something that isn’t going to unfairly penalize startups and small businesses, you might even have something there, but if you find the exercise difficult, there’s a decent chance all of Congress or your State’s legislature or your country’s Parliament and all of their aides are also going to have trouble coming up with a well written law, let alone one that will survive the political process, and the most likely result is something that entrenches existing businesses, ultimately reducing your possible future choices. Actually the most likely result is a law not even passing, and if it does, getting distorted along the way into something that will likely reduce your possible future choices.
It’s not that lawmakers should never pass laws, a new law should be judicious and necessary, something that can’t be handled by the Courts from the existing body of law, and something that ought to be handled by law rather than some other civic institution. There’s a lot of ideas for laws out there that doesn’t meet any of this criteria, but we still hold onto this idea that “regulations” are magic and will almost always have their intended effects rather than almost never.
The first test however for any new bill that would be law is, do we need this law? I think in cases where disputes are contractual or market-oriented, it is okay to rely on the resources of the State (the Courts specifically), especially if no other form of arbitration will resolve the dispute, but passing a new law should be a last resort and only after a case for it has been properly made, and a coalition around the new law formed.
How about water or electricity grids? Railroads? (City) Streets?
> The Myth of Natural Monopoly
> In his 1986 book, Direct Utility Competition: The Natural Monopoly Myth, he concludes that in those cities where there is direct competition in the electric utility industries:
> Direct rivalry between two competing firms has existed for very long periods of time — for over 80 years in some cities; The rival electric utilities compete vigorously through prices and services; Customers have gained substantial benefits from the competition, compared to cities were there are electric utility monopolies; Contrary to natural-monopoly theory, costs are actually lower where there are two firms operating; Contrary to natural-monopoly theory, there is no more excess capacity under competition than under monopoly in the electric utility industry; The theory of natural monopoly fails on every count: competition exists, price wars are not "serious," there is better consumer service and lower prices with competition, competition persists for very long periods of time, and consumers themselves prefer competition to regulated monopoly; and Any consumer satisfaction problems caused by dual power lines are considered by consumers to be less significant than the benefits from competition.
We also know that as Google Fiber entered any city the incumbent ISP immediately decreased its price.
Natural monopoly is a strange concept. Its formal definition by Baumol: "[a]n industry in which multi-firm production is more costly than production by a monopoly". ( https://en.wikipedia.org/wiki/Natural_monopoly#/media/File:N... )
It sounds like it's almost true in every case where you are forced to duplicate components/processes/efforts/structures, plus even with diminishing returns economies of scale helps the big companies.
Of course why the big incumbents get complacent/inefficient, why they turn to regulatory capture instead of R&D, is a different question.
For example, even with Amazon there is Target and Walmart selling online and doing much more similar delivery times these days.
The network effect of a two sided market definitely is a barrier to entry, but there is so much capital out there that other large firms or firms with access to insane amounts of capital will also build a 2 sided market and create a network effect. It's why there is Shopify, eBay, Etsy, etc. All more like an oligopoly than a monopoly.
In contrast, true natural monopolies need barriers to entry that are so high that it just doesn't make sense or isn't even possible for another company to do it even if they have insane capital. The electricity grid prior to "deregulation" and the forcing of a more competitive market was a prime example and the grid being governed/run by an independent service operator.
Easier said than done due to network effect. That's what they went for. Its also how Amazon and Facebook got so big. Heck, its even why Microsoft Windows got big. Become the cheapest, get volume, then abuse your market domination.
It seems to me that the most logical response is for merchants on Etsy to get together and launch their own platform, collectively owned by the merchants. It puts them in control and not at the mercy of some company wielding power over them, while they keep the advantage of having a single platform with a lot of merchants.
In fact, I've also been thinking taxi drivers should do something like that to fight back against Uber. Cut out these artificial middlemen and deal directly with your customer through collective tools that give you the same advantage as the big companies.
We're also subjecting ourselves to scammers on market platforms and "crowdfunding". I fell for one on Kickstarter, which is also available on IndieGoGo. IndieGoGo acted (by disabling it), Kickstarter has not. In fact, Kickstarter remove any personal information shared by backers about the scammers. Who's side are they on, I wonder? Not the backer's side, it seems.
I assumed these middlemen platforms (Etsy, Kickstarter, etc) are there to please both parties equally. I suppose the keyword in both these stories is service. If they don't provide good enough service, people will eventually work against the network effect to create something better.
Volkswagon, El Corte Englais, Credit Swiss, Ubisoft ... there's at least a few in each member EU state, just like the United States
> If you don't like it, you move somewhere else
These two statements contradict each other. You're asking stakeholders to change their operating model in order to avoid Etsy having to do the same. This non-existing regulation potential impacting the practice of "starting a business" isn't a necessary argument. Stakeholders are resisting decisions that are negatively impacting their business--financial and tech firms do it all the time.
How are you being forced?
No company forces bad work conditions on their employees either any more. Since you’re always free to leave. I’d think you can use force in cases like that though (IE at least previously some of Amazon warehouse worker issues)
There's a lot of other sizable platforms these days. AliExpress, Jet, eBay, Banggood, Wish, Rakuten and more.
And, can you sell a selection of products on those various platforms as teasers to lure customers to more products on your own e-comm? This way, you capture more of the value than give it away to them. You would have to find a way to run your own site/app and do shipping, but that's the trade-offs.
if Etsy wants to damage their brand than so be it. However there are multiple market places out there and this move by Etsy may be the push people need to look into them or start one.
edit: Found a comparison [0] spreadsheet for fees/etc, no comment from me on accuracy but it does show ebay as higher
[0] https://docs.google.com/spreadsheets/d/1z9PZDYLzlJe4fRgS85UX...
That is how it works "in real life" everywhere in the world, so i don't see why Amazon should be any different.
It is not just the market places though, isn't it? Twitter used developers to grow (generous API limits) then cut them off, tumblr used erotica to grow then started restricting, google allowed certain ads at the beginning then added restrictions... and so on.
How much regulation can you put in place for such behavior? Also regulation is expensive, selective and can be rolled back when the next gov comes along.
Would be nice to have some kind of decentralized solution for this...
Everyone wants to pretend that seller's are victims, but let's not pretend that any of them are any more loyal to Etsy than Etsy is to them. How many seller's are in multiple marketplaces? All of which charge much more than what Etsy has been charging for the amount of free traffic they're providing.
The marketplace market has evolved. You can sell your products on Amazon, Etsy, Walmart, NewEgg, Rakuten, and eBay at the same time. An entire industry of SaaS tools has evolved to manage this. Etsy has been way behind the in what they're charging sellers, and none of the seller's benefit if Etsy goes under.
This is what other marketplaces charge, for ALL orders. Providing the same service as Etsy.
Amazon: 6-20% (15% average)
NewEgg: 8-15%
Walmart: 6-15%
eBay: 10%+
It's far more likely in this scenario, there will be little confusion between the generic text ad and the first organic link that clearly has the seller's name in it.
Even if they don't, it still falls into a similar trap. A few weeks prior (when I was still looking for cheaper alternatives), I mentioned off-hand that I've found one option, and it's on Etsy. Did she Google "[generic term] + Etsy" (I only found one seller, so it's tantamount to searching the seller's name)? I've no idea, but if she did, they're probably taking 12%.
It's not easy to automate, or to build a model that demonstrates that targeting this low-level will have a positive ROI. Advertising is a fickle game, and I don't see this being successful without building it on a broad program that allocates spend by some segmentation of their sales (e.g. product category).
I'm not quite sure why you feel it isn't but I'd like to better understand your perspective.
1. First of all, you can't differentiate much in terms of offering and most of the time, you're put in a position of having to compete by price if there are similar offerings in the same platform.
2. Believe it or not, it's only a matter of time when other sellers (particularly from CN) will replicate your offering if they ever find it to gain traction and will force you to compete by price.
3. Because you're pushed into a red ocean, you barely get to build your brand and curate your own email list.
4. Finally, you can avoid all these random fees by having your own shop. These fees can make or break your business especially if they force you to increase the price of your products.
I've been in the E-Commerce (mostly drop-shipping) business for many years now and I will never recommend anyone to solely rely on Amazon or Etsy or Ebay or even Shopify. Get a domain name, roll out something quick. Use WooCommerce or Magento or whatever it takes. Start off with a simple shared hosting account if you can't afford to pay a lot, use the rest of the money to advertise on Facebook/Instagram and start building your own list. When you grow, move to something like AppEngine on GCP or some managed dockerized hosting on AWS so that you don't need to worry about devOps.
You'd be surprised, how effective this strategy is over the long term, than having to sell your data to all these platforms which you're helping to grow by paying your money to them and as well as data. I know atleast Shopify effectively sucks your analytics from your shop and resells it to you back as a premium offering called "Shopify Analytics" (https://help.shopify.com/en/manual/reports-and-analytics/sho...).
Install Google Analytics and Tag Manager, read some tutorials and setup event tracking. Feel free to ping me if you need help. You'll then start to see how much valuable data you've been giving away to these leeches for free (sometimes even paying a fee to them to steal your data).
With all of the above and the right combination of products, UX, ads, you can easily make much more than relying on these third party platforms.
I'm currently building an e-commerce platform like Etsy, and tossing up some ideas of what kind of features to provide for sellers with respect to their brand, email list, and analytics, paywalled content etc.
The ad will mention the seller's products but also say Etsy. So free advertisement for Etsy.
Very underhanded!
Quite cheeky, considering Etsy itself is really made by it's sellers - what is it otherwise, than just an e-commerce enabler like shopify etc.
> If you’ve made more than 10,000 USD (approximately 7,800 GBP) in sales on Etsy in a 12-month period you’ll benefit most from offsite advertising. So, you’ll be required to participate for the lifetime of your shop and you’ll get a discounted advertising fee.
If you make a living off your Etsy shop then surely you will have more than 10K sales a year. Even if not in the USA, I am originally from Hungary and the minimum yearly wage is 6K USD.
Let's run another calculation. If you are selling at an average price of 20 USD (which can be just a t-shirt) then you only need to sell four things every three days. That's... not a lot.
My numbers are fake but you get the gist.
Are there any platforms / marketplaces that don't treat their vendors like garbage?
Every small business having its own storefront, and may or may not be doing SEO properly, is likely to mean less aggregate sales for all those businesses.
Since most of my sales are from my own word-of-mouth - a google ad is a worthless investment. All that will happen is someone who has a gmail account will purchase from me, google will notice this, present an ad then I'll get charged for the ad on next purchase. Nice little earner for Google and Etsy but useless to me.
Opt out? Sure, but I'm sure there's a stinger somewhere in the terms that will cost me in some obscure way. No thanks. Its actually worth me spending 40 hours figuring out an alternative. Then be done with them completely. More likely I'll replace Etsy with a simple investment of 5 - 8 hours.
For those curious, I sometimes make wooden furniture as a hobby. These are one-offs. Sometimes on commission/custom order but otherwise I usually sell one piece a week. So no, I don't use google ads etc. I'm not a mass-produce kind of operation and my customers know it. Its part of the appeal.
They do need to make money. But the marketing hype around this change just seems so dishonest.
Show you ads with relevant products on Instagram/Facebook that all link to different products on Etsy. They probably need more sellers in order to fill the ads with relevant enough products.
For some reason you assume that the stores don't already know their customers and haven't already maximized their prices.
Also, once someone has made his first purchase on the platform (call it etsy, airbnb, amazon, booking, whatever). It's easier to make a second purchase than register in another new site.
This sounds like business the stores wouldn't be getting otherwise (so it's incremental), and all at the cost of what you'd be to an affiliate network anyway. Forced participation if you do more than $10,000 is ridiculous, but I otherwise fail to see what the uproar is about.
Have you ever run a business where the margins don't even reach fifteen percent? Because that is a lot of small businesses. More sales at unsustainable margins are not better than fewer sales.
Software people forgetting that COGS exists is common enough in the VC space but most of the world has an acute understanding of the costs of their supply chain. "Suddenly, we decide when your margin drops by twelve percent and there is no recourse except to fuck off" is bad.
I'm willing to wager the average margin for an Etsy seller is much better than that, but it makes for a dramatic example to try and prove a point.
> More sales at unsustainable margins are not better than fewer sales.
That's not how margins work.
Scenario 1 - No Participation
- Orders: 1,000
- AOV: $30
- Gross Sales: $30,000
- Cost: $15,000 COGs
- GM $: $15,000
- GM %: 50%
Scenario 2 - Participation
- Orders: 1,000 + 100 Outside Ad Orders
- AOV: $30
- Gross Sales: $33,000
- Cost: $16,500 COGs + $450 = $16,950
- GM $: $16,050
- GM % 48.6%
This is before you factor in other costs, or your time.
- Organic Orders: 500
- AOV: 20
- Gross: 10000
- Margin: 15%
- Net: 1500
A nice little side business. Nothing amazing, but a little extra income.
- Extra Orders: 100
- Gross: 12000
- Net: 1560 ([Orders * AOV * Margin] + [Extra * AOV * (Margin - Esty Ad Cut)])
Hang on - why am I doing 20% extra work for 60 quid?
If Etsy takes some of my organic traffic, I make a _loss_:
- Organic Orders: 450
- Value (AOV): 20
- Margin: 15%
- "Extra" Orders: 150 (100 from above, plus 50 that _would_ have been organic but are now attributed to ads)
- Gross: 12000
- Net: 1440
I'm doing 20% more work, and making _less_ money.
Even if you increase the margin to 25%, you can still be looking at very marginal gains for the additional work if there is a shift from organic to ads (500 sales - net 2500; 450 sales + 150 ad sales - net 2640). As a seller, it's driving my workload up without giving a corresponding return, which might not be wanted. That's why not being able to opt-out is a problem - for some sellers, it could make a lot of sense and drive profits; for others, it could be an unwanted drain.
That's not how it works. Overall you're making less per hour, but making more overall money. Maybe you were at $20/hr, and now you're at $19.50. This is not a bad trade-off, as otherwise you wouldn't have made that money but you still would have had those hours of productivity available.
Where do these exaggerated 10-15% gross margin numbers come from? These stores do not exist, or do not exist long. And I can't imagine any product at 10-15% that isn't being sold everywhere else because it's mass-produced.
How much of every seller's business comes from free Etsy traffic? Should Etsy charge more for orders they can validate came from them, which the seller otherwise wouldn't see?
Well, the uproar is about the forced participation. If you remove that, then you obviously will fail to see the reason for the uproar.
But it gets even more insidious when you think about people who have multiple stores on different platforms. Let’s say you also own artisanaldoorstops.com and it goes to a Shopify site. Sure most of your business comes from Etsy, but you’re working hard to build your own brand and reduce your dependence on Etsy. Now, with this change, any success your standalone storefront has will be undercut by Etsy buying ads against your own store AND TAKING MORE OF A CUT.
Tangentially, this is the same thing opentable does with restaurants, they will sign up a restaurant and then buy AdWords for the name of the restaurant. I’ve seen stats that upwards of 25% of restaurant bookings can be redirected from the restaurant website to opentable simply via a top position ad spot. It’s the same scenario and it hurts restaurants significantly.
There are other ways as well where it may not be incremental.
But without transparency and control of tracking and segmentation, users can't determine that at all.