This week, thousands of people selling goods on Etsy are going on strike to protest the company’s climbing fees. And what appears to be a battle for a small corner of the internet is in reality one of the most protracted battles for our digital world.
Etsy is one of the countless internet companies that brings together people who have something to sell and those who may be interested in taking advantage of the offer. For their role connecting the two parties, these intermediaries collect a fee that can amount to 15 to 30 percent of each sale. (Etsy charges much less.)
Techies call these marketplaces, and they’re everywhere. Most of Amazon’s ecommerce sales come from fees the company charges independent merchants whose cat toys and phone chargers we find and buy on Amazon. Apple’s app store, Airbnb, restaurant delivery apps, and Uber are also marketplaces that match customers with people offering apps, homes for rent, meals at restaurants, or a ride to the airport.
It is a constant in the digital world that these middlemen are hated by the people and companies who rely on them. Almost always, at least some app developers, restaurants, Etsy dog portrait makers, Substack newsletter writers, and other marketplace sellers believe that the costs are too high, the rules aren’t fair, that they’re being treated poorly – or already. the above.
It is possible that these conflicts are unavoidable. In 2022, running your own business will almost always mean relying on tech middlemen who make your business possible, but can also make it more difficult.
Look, I want to acknowledge that in this Etsy dispute — as with Apple developers’ anger at the company and Amazon sellers’ displeasure with selling in the massive digital mall — both sides have a point.
There’s no denying that Etsy, Amazon, and Apple do a lot of work for the people who sell stuff through them. Without Etsy, people who do dog portraits would have to try to set up their own websites or shops and hunt for customers themselves, and handle tasks like credit card processing and customer service.
Etsy does all that for them, in exchange for a fee of up to 6.5 cents on every dollar of sales of what used to be 5 cents. The merchants battling Etsy also have other disagreements with the company, including that it effectively penalizes solo entrepreneurs for not being able to respond to potential customers right away, and that the company requires sellers to pay to advertise their products on sites like Google, Pinterest and Facebook who are nibbling more in their income.
Etsy has said that some of the company’s approaches may not be popular right now, but they will benefit sellers in the long run.
Sometimes those complaints can seem whiny or abstract to us, but put yourself in the shoes of those Etsy sellers, the restaurants that sell food through the Grubhub app, or companies that make apps for iPhones.
They love being able to find a bunch of customers in one place, but may find it annoying that Etsy, Grubhub, and Apple dictate so much about how they conduct their business, take a lot of their money, and get more power from their work .
These differences are reflected in the prices we pay, and much is at stake for the millions of people who try to make a living doing what they love most.
One question that is always asked in marketplace disputes is what is a fair fee for them to charge people who offer an Uber ride or sell a dog portrait. But I also wonder if the imaginative technology industry hasn’t been creative enough to look for alternative ways to make money.
Almost all marketplaces charge a commission and often other costs when we buy something. Even in the metaverse, apparently, companies will still make money by collecting a commission from the people who sell virtual reality doodads. Is there another way, and would it be better?
A few years ago, a Goldman Sachs investment analyst suggested that instead of battling developers who don’t like paying up to 30 percent for the sale of a digital weapon in an iPhone game, Apple should reduce the cost of supporting the game. the app economy in a different way. The analyst, Rod Hall, suggested that developers instead pay for some or all of the Apple technologies developers use to create and distribute iPhone apps.
That approach would certainly present a whole new set of problems. And it doesn’t address the complaint of iPhone developers or those protesting Etsy sellers who love a central place to sell their stuff, but hate the way those marketplaces have so much power over how they run their businesses.
There are no magic balms for the internet’s ongoing battles over middlemen like Apple and Etsy. But I appreciated Hall’s attempt to rethink how marketplaces generate revenue. It feels like we could use more experimentation to bring peace to one of the most protracted disputes on the internet.
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Before we go…
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Ukraine said it has stopped an attempted Russian cyber attack on the country’s electricity grid. My colleague Kate Conger writes that the revelation of the sophisticated cyber-attack raises new concerns that the Russian government might increase its use of digital weapons in Ukraine and possibly the United States.
Related: Russia’s engineering industry faces a brain drain as thousands of workers flee the country. And Vice writes that Twitch video streamers in Ukraine are bringing images of the war to Russian viewers.
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These are the highest earning people in the United States: According to ProPublica’s latest report from data from the Internal Revenue Service, tech billionaires including Bill Gates and WhatsApp co-founder Jan Koum comprised 10 of the top 15 income earners from 2013 to 2018. And because of the design of the US tax system, tech billionaires tend to pay rates well below those of other very wealthy people.
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Bribe to work in the office: My colleagues have a nice article about the benefits tech companies give employees — including a Lizzo concert, window seats for everyone, free fried chicken, and terrarium-making classes — to push them back into an office.
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This one dog KNOW he was naughty for eating all the treats in the house† (He’ll do it all over again, though.)
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