Years ago when eBay prioritized search results to favor listings that offered free shipping, many sellers bemoaned the platform’s move.

Even today, there is significant vocal group of sellers that feels eBay pushed them away from the platform with that decision.

It now seems Etsy may follow eBay footsteps slowly into that direction.

Etsy is openly suggesting that sellers reduce shipping costs and that it will downgrade search results of listings that include high shipping charges.

“Our buyer research continues to show us that high shipping costs or long processing times may stop buyers from completing their purchase and keep them from coming back to Etsy. Etsy search factors shipping prices into search ranking to make it easier for shoppers to find listings with competitive shipping prices. Lowering your shipping prices makes your items more likely to rank higher in search.”

The quote is directly from a blog post on Etsy discussing search and introducing its Ultimate Guide to Etsy Search.

eCommerce Landscape to Blame

Unlike eBay, which went straight for free shipping, Etsy seems to be content to allow a reasonable shipping cost. But for how long?

Amazon Handmade represents a threat to Etsy’s business model as it goes after the same unique and custom product segment.

And while many products on Amazon Handmade do not include free shipping, the number of Prime eligible is growing.

This week Amazon also introduced Amazon Scout, a new way to shop on Amazon that uses AI to suggest products to shoppers mostly visual presentations and simple yes or no input.

READ MORE: Amazon Testing New Shopping Experience with Amazon Scout

Shipping cost has become a real balancing act for Etsy. While it is not like eBay which is trying to compete with mass merchandise product, it has to think about online buyer behavior.

During the freewheeling days of eBay, it was routine to find a $20 product with a $15 shipping cost.

This was a common trick by sellers to gain high search rankings on price point. But the practice was eliminated when eBay prioritized free shipping.

The Competition Demands a Rethink

Etsy finds itself at a similar crossroad now, except that many products on the marketplace are naturally lower priced and the cost of shipping them can be substantial.

Everyone knows there is no such thing as free shipping, yet it is a successful marketing ploy that seems to resonate with buyers.

If Etsy will continue to grow, it cannot ignore the eCommerce landscape and buyer behavior. Therefore, it is trying to force sellers to think about shipping costs even for unique products.

This rethink can range from researching better and cheaper shipping options to the elimination of low priced and low profit items on the marketplace.

There will be an impact on sellers that can’t just hide the shipping cost in their products!

And if Amazon Handmade becomes more popular and includes more Prime eligible products, it is just a matter of time before Etsy will prioritize free shipping further.

The marketplace already has a “Free Shipping” drill-down option in its left-side navigation menu.

The bottom line is Etsy sellers need to prepare for the inevitable.

What do you think about this push for lower-cost shipping on Etsy? Drop us a line in the comments section below or head over to our Facebook Group for Small Business Online Sellers.

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