This week, thousands of people selling goods on Etsy are on strike to protest the company’s climbing fees. And what looks like a battle for a small corner of the Internet is truly one of the most enduring battles in our digital world.
Etsy is one of the millions of internet businesses that gather people with something for sale and those who may be interested to accept them in the offer. For their role connecting the two parties, these intermediaries charge a fee, which can be 15 to 30 percent of each sale. (Etsy charges much less.)
Technicians call these markets and they are everywhere. Most of Amazon’s e-commerce sales come from fees that the company charges to independent retailers whose cat toys and phone chargers we find and buy from Amazon. Apple’s App Store, Airbnb, Restaurant Delivery Apps and Uber are also markets that connect customers with people offering apps, renting homes, eating out or traveling to the airport.
The constant of the digital world is that these intermediaries are hated by the people and businesses that rely on them. Almost always, at least some app developers, restaurants, Etsy dog portrait makers, Substack newsletters and other vendors in the market think the fees are too high, the rules are not fair, they are abused – or all of the above.
These conflicts may be inevitable. In 2022, running your own business almost always means relying on technology resellers who make your business possible, but can also make it more difficult.
Look, I want to admit that in this dispute over Etsy – both with the anger of Apple’s developers towards the company and the dissatisfaction of Amazon retailers with sales in the huge digital mall – both sides are right.
There is no doubt that Etsy, Amazon and Apple do a lot of work for the people who sell things through them. Without Etsy, people who make portraits of dogs will have to try to create their own websites or shops and search for customers themselves and handle tasks such as credit card processing and customer service.
Etsy does all this for them, in exchange for a fee that increases to 6.5 cents for every dollar of sales of 5 cents. Etsy’s retailers also have other disagreements with the company, including that it effectively punishes solo business owners if they can’t respond to potential customers immediately, and that the company requires vendors to pay to advertise their products. on sites like Google, Pinterest and Facebook that invest more in their revenue.
Etsy said some of the company’s approaches may be unpopular at the moment, but that they will benefit sellers in the long run.
Sometimes these complaints may seem whiny or abstract, but put yourself in the shoes of Etsy vendors, restaurants selling food through the Grubhub app, or companies that make iPhone apps.
They love being able to find a bunch of customers in one place, but they may resent that Etsy, Grubhub and Apple dictate so much of the way they run their business, take a lot of their money and become more powerful than their work. .
These differences are reflected in the prices we pay, and they are high stakes for the millions of people who are trying to make a living doing what they love.
One question that is always asked about market disputes is what is the fair fee for them to charge people who offer Uber travel or sell a dog portrait. But I also wonder if the imaginative technology industry hasn’t shown enough imagination to look for alternative ways to make money.
Almost all markets charge a commission and often other fees when we buy something. Even in the metaverse, apparently, companies will still make money by collecting commissions from people who sell virtual reality add-ons. Is there another way and will it be better?
A few years ago, an investment analyst at Goldman Sachs suggested that instead of battling developers who may be outraged by paying up to 30 percent of in-game digital weapon sales for the iPhone, Apple could recoup its costs to support the app economy in different way. Analyst Rod Hall suggested that developers instead pay for some or all of Apple’s technology that developers use to build and distribute iPhone apps.
This approach will definitely create a whole new set of problems. And it doesn’t address the complaint of iPhone developers or those protesting Etsy vendors who like to have a central place to sell their stuff, but hate the ways these markets have so much power over how they run their businesses.
There is no magic balm for the ongoing battles on the Internet against middlemen like Apple and Etsy. But I appreciated Hall’s attempt to rethink how markets make money. It seems that we could use more experiments to try to bring peace to one of the most enduring disputes on the Internet.
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Before we go…
Ukraine has said it has stopped an attempt at a Russian cyber attack on the country’s electricity grid. My colleague Kate Conger writes that the discovery of the complex cyber attack raises new fears that the Russian government may increase the use of digital weapons in Ukraine and possibly in the United States.
Connected: Russia’s technology industry is facing a brain drain as thousands of workers flee the country. And Vice writes that Twitch’s video streamers in Ukraine carry images from the war to Russian viewers.
These are the highest income people in the United States: According to the latest ProPublica report from the Internal Revenue Service, technology billionaires, including Bill Gates and WhatsApp co-founder Jan Kum, are 10 of the top 15 earners from 2013 to 2018. And because of the design of the US tax system , technology billionaires tend to pay rates much lower than those of other extremely wealthy people.
Bribery for office work: My colleagues have a fun article about the benefits technology companies provide to workers – including a Lizzo concert, window seats for everyone, free fried chicken and terrarium classes – to push them back to the office.
Hugs for that
This dog KNOWS that he was naughty, that he ate all the goodies in the house. (However, he will completely do it again.)
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