r/Etsy • u/TheDishwaterBlondie • 12h ago
Help for Seller How are new POD Sellers dealing with cash flow due to Etsy payment holds?
Hey guys, so for context; I’m about to open a new POD shop after spending months creating all original artwork & designs that I’m actually really proud of & excited about. My plan is really to build more of a brand here not just sell basic POD slop. But because I’m doing POD, & because I just learned about payment holds for new sellers, now I’m really starting to question how that might effect cash flow…
I actually used to have a different Etsy shop a few years ago too, but payment reserves & holds weren’t a thing yet back then so it was never a problem. I naively was assuming not much had changed since & completely neglected to factor these new policies into consideration before trying to open another new shop.
I also had previously heard of Etsy doing payment reserves now, but apparently I’ve also been confusing payment “reserves” for payment deposit “holds” assuming they were the same thing. Although, I now know that’s not technically the case.
Evidently, it seems as if a payment “reserve” is when Etsy withholds usually approx 30% of revenue from a sale until shipping can be validated in most cases. However, a payment “hold” on the other hand is when Etsy prevents one from depositing any funds into their account at all for a certain set amount of time? Correct me if I’m still wrong, but that’s my understanding as I know it to be now.
Of course new shops especially are subject to both of these for at least the first 14 days if not longer. I get this is considered to be a “probationary period”. Yet then I read that some sellers claim they don’t even see ANY of their earnings at all for up to the first 3-6 months of being open entirely!? Which is rather highly concerning if so.
Now I get that Etsy does this to help weed out scammers. And honestly the 30% payment reserves I can totally reason with until shipment tracking can be confirmed for orders. But Etsy gatekeeping ALL of your money with payment holds for any longer than 2 weeks just seems criminal to me!? Like am I missing something here? Idk
That said, how are yall dealing with cash flow? Especially POD sellers? How do you even get started at that rate to begin with?
For example; I recently came across this other POD tshirt shop. And despite them only being open for about 3 months now, they already have 1K in sales! At first I was thinking total GOALS. But now I’m not so sure…
If we do some brief math idk how the heck they’re affording the capital?
Like for instance; let’s round & say they’re selling each item for about $30 including shipping. Then let’s assume their profit could be maybe $10 per order (for the sake of easy math.) Hence, their expense & cost for each order they pay is $20. Therefore, if you multiply $20 by 1000 then that’s $20K dollars they have already had to pay their printing partner in only 3 months!? Which is total insanity to me especially if they haven’t even possibly seen a dime from any of it assuming Etsy is still withholding all their funds/ revenue for being a “new” shop. But I’m not positive.
Obviously, there’s no way to know for certain tho how much Etsy may or may not still be withholding or reserving from their sales without asking that particular seller directly. But maybe they’re on this Sub & can chime in too lol I know I’ve seen some other people mention that if you achieve “Star Seller” status sooner then Etsy might make your probationary period shorter & withhold less? But the seller im referring to did not appear to have “Star Seller” status yet anyway.
Which begs the question; How are they affording their success? How are they affording to pay the printing company they’re using? I know they’ll get all that money back eventually, but still. How does one manage in the meantime if some shops really can’t access any deposits for the first few months? Unless, I guess, you have an insanely high limit on your credit card or you secure a small business loan or something.
Look, I know for a lot of shops it’s probably a non issue anyhow if you aren’t getting a ton of sales right out of the gate regardless. But what if you do? Shouldn’t that be the goal? How do you plan for that? Or do a lot of you guys just wait to even really start actively advertising until after your “probationary” period is up?
Maybe these are dumb questions, & I’m probably still missing something here, but a lot has changed since I last had a storefront on Etsy & any feedback is super appreciated!
(Sorry for the long post.)
TLDR: How are new sellers (particularly POD sellers) affording the capital to pay for their expenses (or to pay their printing partners) if Etsy is gatekeeping all of your earnings to start? Especially if one is getting a lot of initial orders? How long did Etsy instill these payment “reserves” & account deposit “holds” on you? How long did this “probationary period” last for your shop? How did you manage cash flow in the meantime?