I hate Etsy's free shipping policy thing too. I sell 80 or 90% international - Switzerland isn't exactly a very big market to sell to . I do free shipping domestically on the lightest two shipping categories, so I have some "free shipping" on offer, and that's just a letter, I can swallow that if need be - mostly. I had it on for the next shipping category too, but I've been getting more and multiple sales here in Switzerland just recently, so I had to change that - when it's two patterns that are together over 100 grams, then it gets too much.
Etsy Sales Prevention Department's ridiculous "give them free delivery or we'll bump you to the bottom of the search results" farce was the final straw that pushed me into having my own independent website shop. It has taken me just over a year of really hard work to get that shop selling the way I wanted it to, but the good thing is that Etsy can't get me anymore with their stupid loony ideas. I am still keeping my two Etsy shops going of course, but my indie shop is my safety net if Etsy ever decide they are going to totally lose the plot.
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