The Great Etsy Hypocrisy: Why They Take Our Fees but Hide Our Art

It creates great anxiety when a major platform like Etsy feels unstable, costly and ineffective, especially if you rely on it for income. On paper, some days my sales looked good, but the reality was that Etsy was sucking up my profits like a sponge. If I turned off the advertising, my sales and views would flatline to zero. If I turned my ads back on, it would take all my profits. I was working for free, selling my items and seeing nothing in return. Not to mention creating items and responding to customer messages.

On November 28, 2025, I cancelled my subscriptions, removed my items from auto-renewal, and quietly left. The feeling that something was "wrong" with my sales was accurate. The company is shrinking, restructuring, and undergoing significant changes; keeping up with Etsy's demands is becoming dizzying at best and nearly impossible. To be honest, I am growing increasingly frustrated with the constant changes, working harder, and seeing little to no return in terms of benefits, except for higher fees and reduced or no profit.

Long-time CEO Josh Silverman, who could not decide if Etsy was going to be eBay or Amazon, is stepping down and handing over to Kruti Patel Goyal in January 2026. A change of Leadership creates uncertain times. As of late 2025 active sellers dropped significantly; fewer sellers also means less sales on the platform. This indicates that "Gross Merchandise Sales" (the total value of goods sold) has been in decline. They are aiming to remove "low effort" dropshippers to return to their "handmade/vintage" roots. Forget the great sales you had during the pandemic boom; the platform now feels like a ghost town.  Also, Etsy's stock value dropped sharply (around 20% in late 2025).

So, why does Etsy claim to be financially stable and profitable? Because of the way they make their money through you, the seller. They generate revenue through fees and advertisements, even if the total sales volume declines.

The majority of their revenue comes from ads alone. Their ads are unique not just within the "handmade industry" but also unique both historically and globally. No other platform has ever developed an advertising system as contrived as this.  You are paying Etsy for the privilege of regaining some of the traffic you generated.

  Imagine being able to advertise only a Facebook post on Facebook, a Google search result on Google, or an Instagram picture on Instagram, never leaving their website. Not only this, but you also have no say in what is targeted or how much it costs; no, their AI robot does it for you to maximise Etsy's revenue and leave you with nothing. Each time my ads were working, the AI bot found a way to gobble up any profit I made. No other platform does it; it is just shy of theft and frustrating to say the least.

At the time of writing this article Etsy has an Altman-Z score of 1.6. Altman-Z is a very reliable financial indicator used by investors to determine if a company is struggling. An Altman-Z score of 1.8 or below indicates a company is significantly distressed. Etsy is officially in the distressed zone according to this financial indicator. 

So to answer the opening question, why are Etsy taking our fees but hiding our Art? Quite simply, they made a financial mistake at some point and were forced to control their ad spend and visibility of art and handmade goods, as many sellers and I worked hard for; we are no longer seeing the profit. Etsy are using it to keep afloat. The company has been walking on a tightrope, and I shall watch from afar to see if they make it across.

In the meantime, I shall take my final thirty-three pence profit and go.