Etsy Explodes 26% After Seller Fee Hike
Etsy has a strong session Thursday.

Selling crafts on Etsy (ETSY) will get less profitable, but investing in the company may not.

Shares of Etsy soared 26% to $41.65 in trading Thursday after the company announced it will be increasing the cut it takes from sales made on its site from 5% from just 3.5% on July 16.

"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 CFO Rachel Glaser said in a statement.

The company revised its revenue projections for 2018 from between 22% to 24% to between 32% to 34% following the announcement.

The online craft marketplace also announced that it will begin charging shipping fees and offering subscription packages with added features for sellers, causing outrage among the 2 million people who sell crafts on the platform.

Rachel Barman, who runs an Etsy shop called BlueShedCrafts that sells hand-knitted gifts, referred to the fee increase as a "tumor" that is "rotting Etsy away to the core" in a post on the site's seller forum after being notified of the change by email Thursday morning.

Etsy claimed the fee increase was necessary to drive growth and reinvest in its tools for sellers.

"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," Etsy CEO John Silverman said in a statement. "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."

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