Etsy Shares Explode to a New High After Raising Selling Fees

Shares of online marketplace Etsy soared to a brand new high on Thursday after announcing that it is raising its transaction fee from 3.5% of sales to 5% of sales. The new fee will take effect starting on July 16th, 2018.

While sellers weren’t too thrilled about the increase, Wall Street sure was. Shares of Etsy rose as much as 35.7% after the news announcement.

Following the increase in its fee, the company had also increased its revenue guidance for 2018.Etsy now expects revenue to rise 32%-34% year over year, respectively. Before it had forecast a growth of 22%-24%.

The company stated in a press release, “This revised fee structure will enable Etsy to make further investments in marketing to attract buyers, enhance customer support, and drive product innovation.”

Chief Financial Officer Rachel Glaser said, “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. 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 road map.”

Etsy also announced that it would be launching Etsy Plus in mid-July for $10 a month an Etsy Premium “which will be geared toward larger, more established creative businesses.” Etsy Premium will launch next year.

Disclaimer: We have no position in Etsy Inc. (NASDAQ: ETSY) and have not been compensated for this article.