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Etsy shares surge amid upgraded revenue forecast

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Etsy shares have opened in the green in the US Thursday, after the global online hand-crafted marketplace altered its pricing structure and increased seller charges. That’s a move which led it to upgrade its 2018 revenues guidance.

By 1440 BST, Etsy shares were 25.55% higher at $41.42 after surging in pre-market activity.

Etsy’s new pricing structure

Etsy said Thursday that it was introducing new levels of seller packages to help support them through different growth stages while they use the Etsy marketplace ecommerce platform.

New monthly plans will be available from July, while a premium service will also be on offer for larger, more established sellers.

In addition to that, Etsy said it would raise the fee they charge a seller when they make a sale, to 5% from 3.5%. That increase will also apply to shipping costs.

“Empowering creative entrepreneurs is at the heart of Etsy's mission to keep commerce human,” said Etsy CEO Josh Silverman.

“Our two million active sellers have individual business goals and aspirations, and we want to support them no matter where they are on their journey. By listening to the needs of our sellers, we designed our new subscription packages with a combination of tools to help them succeed at each phase of their business lifecycle,” he added.

New pricing translates into higher potential revenues

As a result of this change, Etsy also said it was raising its full year 2018 revenue guidance to 32-34% from 22-24%. Its GMS guidance has also edged higher to 16-19% from 16-18%.

“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,” Etsy’s CFO Rachel Glaser said.

“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 roadmap. We believe all of this will help drive near-term growth and increase buyer lifetime value,” she added.

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