Etsy’s 2025 seller updates: Navigating new algorithms, fees, and gifting features

Etsy has grown up. What started as a quirky craft fair is now a serious marketplace where trends come and go faster than you can say “handmade.” The quarterly reports and seller forums reveal a lot of things that are happening that affect sellers.

Let’s cut through the noise.

The visibility game has changed

If you’re wondering why some shops seem to get all the views, here’s what’s happening:

Etsy’s giving more love to shops that actually sell stuff. Simple as that. Shops that consistently move product rank higher. Etsy’s updated search algorithm is bringing major changes to how products appear in results. The platform is now showing items from a wider variety of shops, which means a single seller can no longer dominate the first page. This gives more shops a chance to appear in top results.

At the same time, Etsy is cutting down on similar-looking listings in search results so if you are planning on copying listings from top shops, this might not be a good idea. If multiple sellers have nearly identical products or photos, the algorithm will show fewer of them. This shift rewards unique products and original photography while making copy-paste listing strategies less effective.

Photos matter more than ever. Not just pretty – they need to show what makes products different. Etsy’s tired of seeing 500 versions of the same wooden spoon. If yours has a handle carved like a mermaid tail, make sure that’s front and center.

About those fees (yeah, they went up)

• Listing Charges: A small fee per item continues to support Etsy’s operational costs and marketplace improvements.
• Shop Setup Fee: The listing fee is still there – no surprise. But now there’s a new shop setup fee for newcomers. Annoying? Maybe. But there are fewer drop shippers and resellers cluttering up search results, so it might be worth it.

The gift push

Etsy’s going all-in on gifting. They’ve realized most people aren’t shopping for themselves, and they’re reshaping the marketplace around it.

There’s now a “giftable” tag sellers can add to listings. Use it.

The new “Gift Mode” thing actually works. It’s part AI, part human curation, and it’s steering buyers toward shops with clear photos and detailed descriptions. If listings look like they were shot with a potato in poor lighting, fixing that should be a priority.

Trust & shipping: The boring stuff that makes money

Etsy’s pushing hard on reliable shipping. Shops with late deliveries and shipping issues are getting buried in search. Many sellers learned this the hard way during holiday season.

Some orders are now eligible for one-day delivery. Consider optimizing your shipping process by partnering with reliable carriers.

The money side

Nearly 20% of Etsy’s revenue now comes from ads. That’s a hint – they’re pushing this hard because it works.

They’re also looking for ways to make money that don’t involve taking a cut of sales, which benefits sellers!

Quality over quantity

Etsy has claimed to care about quality forever, but now the algorithm actually backs it up. Shops with 4-5 star reviews get better placement. Period.

Generic descriptions like “Beautiful handmade item, great gift!” don’t cut it anymore. Specific details about techniques, materials, and product value are what work now.

The economy: It ain’t great

People are watching their wallets. The impulse purchases have slowed down. Smart sellers are adjusting by adding more items at different price points to capture budget-conscious buyers.

Etsy knows this too, which is why they’re pushing hard on the “special gift” angle – people will still splurge for birthdays and anniversaries even when they’re cutting back elsewhere.

What’s working for successful sellers

The “Right to Win” concept is gaining traction. That means focusing on what makes products special and doubling down on it.

International shipping opens up new markets. Approximately 52% of Etsy buyers are based in the U.S., with the rest coming from global markets. If you haven’t enabled international shipping, now might be the time to explore that option.

Bundle offers are effective. Gift sets that combine bestsellers often outsell individual items despite the higher price point.

Despite current financial challenges, Etsy continues to invest in improving the platform, bringing in 90 million buyers and creating opportunities for sellers like you.

Conclusion

Etsy’s 2024-2025 updates present exciting opportunities for sellers willing to adapt and innovate. Focus on the four pillars Etsy prioritizes:

Quality products

Giftability

Clear value

Reliable service

Action items for updating your Etsy shop:

• Enable gifting options wherever possible
• Make your shop listings mobile-friendly
• Enable discounts and bundle offers
• Open your shop to international markets
• Maintain high standards for reviews (aim for 4-5 stars)
• Test advertising options to increase visibility
• Optimize your listings with:
  • Better product photos
  • Clear shipping policies
  • Smart use of gifting features

Good luck on your Etsy journey! May your notifications be filled with sales and empty of customer complaints.