I sell my crochet patterns and stuffed animals in my Etsy shop, and sales on Etsy are a big percentage of my business.
Yesterday, I got an email from Etsy inviting me to sign up for direct checkout in my shop. My first thought was: what is direct checkout, and is it worth it?
And the answer is: it depends on what you sell.
What is direct checkout?
Direct checkout is a system where a customer can use their credit card directly on the Etsy site to make a purchase. This means that customers will no longer be directed to go through PayPal for purchases, and the money will show up in your ‘Etsy Shop Account’ rather than PayPal.
What are the advantages of direct checkout?
The advantage that Etsy is touting is that customers will stay on the Etsy page instead of getting rerouted through PayPal. It’s an obvious advantage for Etsy (because they are getting the processing fee for the payment instead of PayPal), but I’m not convinced it’s a true benefit for the customer or seller.
Customers have always been able to checkout through PayPal without an account (using only a credit or debit card), so you aren’t getting more functionality by switching to direct checkout.
Is it worth it?
Now that’s the big question! The answer is that it depends on the dollar amount of your typical sale. Here are the fees for Etsy direct checkout, PayPal Standard and PayPal Micropayments:
Although I sell some stuffed animals, the bulk of my sales on Etsy are for patterns in the $5 range. As you can tell by the table, it costs me much less in transaction fees to stick with PayPal, where I have a MicroPayments account. (If you’re not familiar with MicroPayments, read this blog post).
If you sell larger items, then the cost of using direct checkout is comparable to PayPal. (Although the amounts are identical for $50 purchases, PayPal is slightly cheaper for larger amounts).
If you’re a pattern seller, and you have PayPal MicroPayments, you’ll save money by sticking with PayPal. If your typical transaction is more expensive, you’ll have to decide if the benefits of direct checkout is right for you.
As for me, I’m going to hold off on activating direct checkout!