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Etsy unveils new monthly plans, hikes transaction fee

Etsy Inc. said June 14 that it will introduce a number of changes next month, including new subscription packages for sellers and an increased fee for sales transactions on its website.

Beginning mid-July, the e-commerce platform focused on handmade and vintage items will launch an Etsy Plus package for $10 per month, which it said will be aimed at sellers who want to jumpstart their growth. The company also plans to roll out Etsy Premium in 2019 to cater to larger, more established creative businesses.

Sellers who do not want to subscribe to the new monthly packages can still access Etsy tools and services without an additional monthly fee as part of Etsy Standard.

The company also said it is increasing its seller transaction fee to support further investments in the growth of its marketplace. Starting July 16, the fee charged when a seller makes a sale on Etsy will climb to 5% from 3.5%, and this will also apply to the cost of shipping.

"Our revised fee structure will allow us to make more meaningful investments on behalf of our sellers while remaining what we believe is the best value for entrepreneurs looking to start, manage, and grow a creative business," Etsy CFO Rachel Glaser said in the statement. "We plan to increase our 2017 direct marketing spend by at least 40% in 2018, revamp our Etsy community platforms, and execute against an exciting product roadmap. We believe all of this will help drive near-term growth and increase buyer lifetime value."

Etsy adjusted its earnings guidance for fiscal year 2018 due to changes to its fee structure. It now expects revenue growth to be in the range of 32% to 34%, compared to the prior guidance of 22% to 24% it gave in May. However, the company said its EBITDA margin forecast of 21% to 23% remains unchanged.