Understanding Etsy Fees: A Comprehensive Guide to Profitable Selling
Launching an Etsy shop requires more than just creativity; it demands a clear understanding of the platform's fee structure. Comprehending Etsy fees, including listing costs, transaction fees, and payment processing charges, is critical to your business's financial success.
In this informative guide, we focus on unraveling the complexities of Etsy fees, providing key insights that will help you budget effectively and price your products wisely. With this knowledge, you'll be better equipped to maximize your profits as you navigate your entrepreneurial journey on Etsy. Prepare to conquer the Etsy marketplace by gaining a solid grasp of your financial obligations.
Here’s what you’ll find answers to:
• Listing Fees
• Transaction Fees
• Advertising & Promotional Fees
• Subscription Fees
• In-Person Selling Fees
• Payment Processing Fees
• Shipping Fees
• Pattern Fees
• Example Profit Calculations
Listing Fees
Listing Fee Basics: Every time you list an item for sale on Etsy online or mobile app, a $0.20 USD listing fee is charged. This is a flat fee that applies regardless of whether your item sells and is charged each time a listing is created or renewed.
Editing and Private Listings: Modifying an existing listing doesn't cost anything. For private listings, the $0.20 listing fee applies only when the item sells.
Listing Duration and Renewal: Listings on Etsy have a duration of four months. If you're selling multiple quantities of the same item, the initial listing fee is $0.20, and a renewal fee of $0.20 is automatically charged each time an item sells.
Auto-Renewals: Etsy provides an auto-renewal feature that renews your listings automatically at the end of the four-month listing period. This means you will be charged the $0.20 listing fee for each listing until you cancel the auto-renewal. You can manage this in your Listings Manager by choosing “Manual” under the “Renewal Options”. After you cancel, you'll be billed only for the current listing period.
Pattern Site Listings: If you choose to create a Pattern site (an additional website through Etsy), there are a few things to note. Firstly, items already listed on your Etsy shop can be listed on your Pattern site without any extra charges. Secondly, if you have listings exclusive to your Pattern site, these don't incur any listing fees. Lastly, unlike Etsy listings, Pattern-only listings do not expire.
Transaction Fees
Transaction Fee Basics: Every time you make a sale on Etsy, you're charged a transaction fee. This fee is 6.5% of the total amount you display for each listing, including the price of the item, the amount you charge for shipping, and any gift-wrapping fees.
Currency Conversion: If you use Etsy Payments and list your items in a currency different from your payment account currency, there may be additional transaction fees.
Tax Considerations: For sellers based in the US, the transaction fee doesn't apply to sales tax. However, for sellers outside the US, the transaction fee applies to the listing price (inclusive of any applicable taxes), shipping price, and gift wrapping fee.
Personalization Fees: If you charge extra for optional personalization, this additional fee is added to the displayed listing price, and the total is subject to the transaction fee.
Fee Deduction: Transaction fees are deducted from your current balance with each sale and are reflected in your payment account.
Advertising & Promotional Fees
Etsy Ads Fees: When you purchase advertising through the Advertising Dashboard in Shop Manager, you have the flexibility to set a daily budget for promoting your listings or shop. The budget can be set at or above a minimum predetermined by Etsy, ensuring you never exceed your daily limit. The fees incurred for Etsy Ads are charged in United States dollars (USD), deducted from your current balance, and reflected in your payment account.
Offsite Ads Fees: Etsy collaborates with various external partners (like social networks and search engines) to advertise your listings. If a buyer clicks on your advertised listing and places an order within 30 days of that click, you will be charged an advertising fee. This fee is dependent on your shop's sales history over the last 365 days:
If your shop has made less than $10,000 USD, the standard fee is 15% for each order attributed to offsite ads. However, you have the option to opt-out of Offsite Ads until your shop reaches the $10,000 USD threshold.
To opt out of Offsite Ads, follow these steps:
Visit Etsy.com and select "Shop Manager."
Choose "Settings."
Select "Offsite Ads."
Click on "Stop promoting my products."
Confirm your selection by clicking "Stop promoting my products" again.
If you want to re-enroll in Offsite Ads at any point, visit the Offsite Ads page and select "Restart Offsite Ads."
Once your shop reaches $10,000 USD or more in sales over the prior 365 days, the fee decreases to 12%. This 12% fee applies for the lifetime of your shop, even if sales fall below the $10,000 USD threshold at a later date. Once you cross the threshold, opting out is no longer an option.
For example, consider you're selling a $10 item with free shipping and a $10 item with $3.50 shipping. If these items are sold via Offsite Ads and you're still under the $10,000 threshold, you'll pay a 15% fee on each sale:
For the $10 item with free shipping, you'll be charged $1.50 (15% of $10).
For the $10 item with $3.50 shipping, you'll be charged $2.025 (15% of $13.50), because the advertising fee includes the shipping cost.
How Offsite Ads Fees are Calculated: The applicable fee (12% or 15%) applies to the total order amount, which includes the listing price, shipping, gift wrapping, and in some jurisdictions, taxes. If you provide optional personalization for an extra fee, this is added to the listing price and included in the calculation. There is no limit to the number of Offsite Ads fees you may be charged on orders, but the total fee for a single order will not exceed $100 USD. Fees are deducted from your current balance and reflected in your payment account.
Currency and Tax Considerations: If you're an Etsy Payments user listing items in a different currency, or if you're selling from outside the US, be sure to review the Currency Conversion section and the details on how taxes affect your Offsite Ads fees.
Subscription Fees
As an Etsy seller, you have the opportunity to opt into Etsy Plus, a subscription package designed to support growing brands with a suite of expanded tools. Here are the key details you need to know:
Subscription Cost: Etsy Plus comes at a monthly fee of $10 USD. This amount is deducted from your current balance each month and shown in your payment account. Please note, local taxes may apply depending on your location.
Auto-renewal: Your Etsy Plus subscription fee is charged to your payment account on the same day each month. For instance, if you subscribe on March 5th, your subsequent fees will be charged on April 5th, May 5th, and so on. However, if you subscribe towards the end of a month, the fee will be applied on the last day of each month. For example, if you subscribe on May 31st, your next fee will be added on June 30th.
Cancellation: If you wish to cancel your Etsy Plus subscription, you can do so at any time via the "Your Subscription" section in your Shop Manager’s Settings. Post cancellation, you will retain access to your Etsy Plus benefits until the end of the current subscription cycle, with the final day of access being clearly indicated on your subscription dashboard. After this, your shop will revert to the standard Etsy format, and you will no longer incur a monthly subscription fee.
Subscription Benefits: As an Etsy Plus subscriber, you receive certain credits each month. These include:
15 listing credits, equivalent to $3, which appear in your payment account.
$5 USD in Etsy Ads credits, which are visible in your payment account and on your advertising management page.
These credits are to be used within the current subscription cycle and will not roll over to the next month. Instead, they'll reset and get replenished at the start of each new cycle.
Domain Registration: Etsy Plus subscribers can also take advantage of discounted domain registration services. This includes free registration for “.store” domains and a 50% discount on selected domain extensions like “.com”, “.net”, and “.ca”. These services are provided by our third-party partner, Hover. Note, this discount applies only to the first year of domain registration. After the first year, your domain renewal will be subject to Hover's regular pricing.
In-Person Selling Fees
If you sell your Etsy items in person, such as at a craft fair, you can use the Square reader to process payments. Here's how the fee structure works:
Syncing Listings with Square: If you choose to sync your Etsy listings with Square, listings with multiple quantities will incur the same $0.20 renewal fee as those on Etsy. If your listings are not synced with Square, a transaction fee of $0.20, known as the "Square manual" fee, will apply.
In-Person Selling Fee Deductions: In-person selling fees are subtracted from your current balance and are reflected in your payment account.
Etsy Transaction and Processing Fees: In-person sales processed with the Square reader will not be subject to Etsy's 6.5% transaction fee or any of Etsy's payment processing fees.
Square's Payment Processing Fees: In-person sales are, however, subject to Square's Payment Processing Fees. The standard processing fee by Square is 2.6% + 10¢ for contactless payments, swiped or inserted chip cards, and swiped magstripe cards. For payments that are manually keyed-in, processed using Card on File, or manually entered using Virtual Terminal, Square charges a fee of 3.5% + 15¢.
Payment Processing Fees
Fee Structure: Etsy charges a payment processing fee for each transaction made through Etsy Payments. For sellers based in the United States, the payment processing fee is 3% + $0.25. This is not a fee that is only incurred from Etsy, any payment from any retailer using a credit card has this fee - this is imposed by the credit card companies to all retailers.
International Variations: Please note that these fees can vary in different countries. For detailed information about payment processing fees for your specific location, please refer to the Etsy Payments Policy.
Basis for Fee Assessment: The payment processing fee is calculated on the total amount of the sale, including tax and shipping.
Fee Deductions: Payment processing fees are deducted from the sale amount in your payment account. Where applicable, deposit fees are subtracted from your Available Funds and reflected in your payment account at the time of your scheduled deposit.
Shipping Fees
Fee Calculation: The cost of a shipping label will depend on various factors, including:
The chosen shipping carrier
The origin and destination of the package
The weight and dimensions of the package
Optional Services: If you choose to add signature confirmation or insurance to your shipment, these fees will be added to the total cost of the label at the point of purchase. Sellers can also purchase parcel insurance through licensed insurance carriers.
Return Labels: U.S. sellers who purchase USPS shipping return labels will be charged after the return package has been delivered.
Payment Method Requirements: To purchase shipping labels through Etsy, sellers must accept Etsy Payments or PayPal as payment methods.
Fee Deductions: The shipping fees, along with any adjustments, are reflected in your payment account and deducted from your current balance.
Pattern Fees
Etsy's Pattern tool enables you to create a personalized website to showcase your items. Here's how the fee structure for this service works:
Free Trial: You can try the Pattern tool for free for the first 30 days.
Monthly Subscription Fee: After the initial 30-day free trial, a monthly subscription fee of $15.00 USD will be charged. Your first month’s fee will be pro-rated, and you will be charged the full subscription fee for each subsequent month you use Pattern.
International Taxes: Where applicable, Etsy may charge local taxes (e.g., VAT/GST) on your monthly subscription fee.
Domain Name Registration: If you purchase a domain name through our partner Tucows, Inc., you will be charged a fee to register the domain name and for any related services you purchase from Tucows.
Auto-Renew: Your subscription fee will automatically renew on the first of the month at 12:01am Eastern Time. You can turn your subscription off at any time by clicking "cancel Pattern" from the Pattern settings on your dashboard or from your payment account. However, if you switch off the service after your subscription renews on the first of the month, you'll still be responsible for paying the full subscription fee for that month.
Fee Deductions: All Pattern fees are reflected in your payment account and deducted from your current balance.
Example Profit Calculations
Understanding Etsy's fee structure is vital for sellers looking to price their products effectively and determine potential profits. In the following examples, we break down the various fees for a US-based seller selling a $10 item with the seller covering a $3.50 shipping fee and a $10 item where the customer pays a $3.50 shipping fee. This breakdown will help illustrate how Etsy's fees affect your bottom line.
$10 Item with Free Shipping
Listing Fee: $0.20
Transaction Fee: $0.50 (5% of $10)
Payment Processing Fee: $0.55 (3% of $10 + $0.25)
Shipping Fees: $3.50 (Purchased by the seller)
Total Fees: $0.20 + 0.50 + $0.55 + $3.50 = $4.75
Final Profit: $10 - $4.75 = $5.25
$10 Item with $3.50 Shipping
Listing Fee: $0.20
Transaction Fee: $0.675 (5% of $13.50)
Payment Processing Fee: $0.655 (3% of $13.50 + $0.25)
Shipping Fees: $3.50
Total Fees: $0.20 + $0.675 + $0.655 + $3.50 = $5.03
Final Profit: $13.50 - $5.03 = $8.47
Understanding Etsy's fees and charges is a key component of successful selling on the platform. From listing fees to shipping costs, from payment processing to offsite advertising, these charges can all impact your bottom line. As this breakdown illustrates, careful consideration of these costs in relation to your product pricing is crucial to maintain a profitable business.
To make this task less daunting, we've created a tool to streamline the process – the Product Pricing Breakdown spreadsheet. Specifically designed for Etsy sellers, it integrates all Etsy fees. Just input your costs for materials and supplies, and the spreadsheet does the rest, calculating the optimum price for your items to ensure you make a profit. It's a valuable resource that lets you focus on what you love most – creating – while confidently managing the business aspect of your Etsy shop. Equipped with this knowledge and tools, you are well-prepared to navigate the world of Etsy selling and turn your creativity into a thriving business.
Hey, I’m Nicole!
Following my successful national park-themed Etsy shop, I'm using social media to share my journey and everything I know, inspiring and empowering fellow crafters and small business owners.
