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In the face of waves of tariffs from the Trump administration, Etsy has some advice for customers and sellers alike, though it warned that the situation remains in flux.
The global marketplace’s tariff exposure is mitigated somewhat by its resale sites, U.K. secondhand apparel site Depop and secondhand musical instrument site Reverb, according to Bank of America analysts. Otherwise, about 25% of Etsy merchandise is sourced abroad, they said.
Tariffs’ hit to the economy is likely to hurt the most, with Bank of America calling “a pullback in overall consumer discretionary spend” the “biggest risk” to Etsy.
UBS analysts led by Chris Kuntarich estimate that Etsy’s gross merchandise sales could fall 5.5% to 11% in fiscal year 2025 and doubt sales would accelerate as much as previously thought, according to a research note last week.
In a blog post Thursday, Etsy CEO Josh Silverman acknowledged that “recent shifts in trade policies and tariffs between the US and many countries around the world have raised questions about global supply chains, pricing, and the general availability of goods.”
Silverman suggested that, at least for now, shoppers consider sticking with sellers from their own countries. U.S. customers can choose “more than 60 million items that ship domestically and we have thousands of sellers in every state,” he said. In the U.K. there are more than 800,000 sellers, in Germany 300,000 and in France 100,000.
In another post earlier in the week, the global marketplace had more concrete information for sellers, including an update on tariffs and how they could approach pricing and shipping. The levies are poised to hurt small U.S. businesses, even when their goods are made in America.
De minimis exemptions — on items valued at or under $800 imported to the U.S. — remain in place until May 2, when goods originating from China and Hong Kong will be subject to tariffs no matter their value. "Generally speaking, the overwhelming majority of orders on Etsy fall below this threshold,” the company said.
UBS analysts said they’re looking for a more precise estimate of the percentage of gross merchandise sales that will no longer fall under the de minimis threshold when the company speaks to analysts about its Q1 report later this month.
“Given that the vast majority of Etsy’s [gross merchandise sales] is derived from items priced below $800, coupled with the fact that ~75% of GMS activity consists of U.S. buyers, with 25% of U.S. buyers importing from abroad (primarily European markets), we believe this regulatory shift presents a material risk to ... growth in FY25,” UBS said.