E-Commerce Company Etsy Warns Sellers of Delay in Payment Because of Silicon Valley Bank collapse
The Gateway Pundit reported that California regulators closed Silicon Valley Bank on Friday. The FDIC was named receiver.
While SVB provided funding to 44% of all venture capital-backed tech and healthcare companies that publicly listed on a stock exchange last year, small businesses are also at risk.
Sellers at E-Commerce company Etsy are now facing uncertainty on when disbursement from their sales will reach their accounts.
Etsy, with approximately 7.5 million world wide sellers, is a global marketplace/ cottage community that sells handmade items, crafts and vintage items primarily comprised of individual small business owners.
In a letter to sellers, Etsy shares:
“We wanted to let you know that there is a delay with your deposit that was scheduled for today. This delay was caused by the recent developments regarding Silicon Valley Bank, who Etsy uses to facilitate disbursement to some sellers. We are working with out other payment partners to issue your deposit as soon as possible.”
“We apologize for any inconvenience or disruption this may have caused. We know that you count on us to help run your business and we understand how important it is for you to receive your finds when you need them. Please know that our teams are working hard to resolve this issue and send you your funds as quickly as possible.”
“No further action is needed from you at this time. Please feel free to reach out to our Help Center 24/7 with any questions you might have.”
NBC reports on the reaction from Etsy sellers:
Sellers discussed the devastating impact.
Another Etsy seller, Rachel Briggs, has been on Etsy since 2010 selling her designs: enamel pins, keychains, and handmade art dolls. Briggs quit her office job in 2020 and has since been a freelance artist. She said her business on Etsy, in addition to her work as an illustrator, is a “huge part” of her household’s income.
Recently, Briggs paid for an “expensive” tax appointment with a professional to handle the documentation now that her income is less traditional. She expected her Etsy deposit would cover the cost.
“Getting the email that one of my most anticipated deposits is being delayed was not really a good thing to wake up to,” Briggs said. Part of her Etsy sales occurred before the deposit was held up, she added, allowing her to pay for the tax services.
Nina Bissett, another Etsy seller, has relied on the platform as her primary source of income since being laid off. Her business is a curated selection of vintage home goods, handmade, disco balls, and accessories.
When she got the email about the delay in payment, she felt worried for herself and the thousands of other sellers.
“My customers are still expecting their orders, and I won’t be able to use the funds I was expecting to use to pay for shipping and materials,” Bissett said.
“It will effectively limit how much extra inventory I can hold and sell,” she added.
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