Selling on Etsy can be profitable, but understanding its fees is crucial to maximizing and optimizing earnings potential.
As an Etsy seller, one of your initial expenses will be the listing fee. Etsy charges a flat fee of $0.20 for every item listed regardless of whether or not it sells; this cost applies for four months (or until it's sold).
Example: If you list 100 items, the total listing fee would be 100 x $0.20 = $20.00.
Upon an item selling on Etsy, Etsy charges a 6.5% transaction fee on its total sale price including shipping and gift wrapping - automatically deducted from your payment account.
Example: If you sell an item for $100 with a shipping fee of $5, the total sale price is $105. The transaction fee would be 6.5% of $55, which equals $6.82.
Etsy imposes a payment processing fee, which varies based on country; in the US, it's usually set at 3% of the total sale price plus a $0.25 flat fee per order.
Example: Applying our previous example, with a total sale price of $105, The payment processing fee would be calculated as (3% of $105) + $0.25 = $3.15 plus $0.25, totalling a total payment processing fee of $3.40.
Etsy charges a 2.5% currency conversion fee when selling items listed in one currency but sold in another to ensure you are paid in your desired currency.
Example: Supposing a foreign sale price equaling $105 was converted, the conversion fee would be 2.5% of that figure or $2.62.
To calculate total fees for an Etsy sale, add up all applicable fees: listing, transaction, payment processing, and conversion fees (if applicable).
Total Sale Price: $105
Listing Fee: $0.20
Transaction Fee: $6.82
Payment Processing Fee: $3.40
Conversion Fee (if applicable): $2.62
If no conversion fee applies, the total fees would be:
Total Fees = $0.20 + $6.82 + $3.40 = $10.42
To calculate your profit, subtract the cost of goods sold (COGS) from the total sale price and any fees and COGS charges.
Example: If your COGS were $20, profit calculation would look something like this:
Profit = Total Sale Price - Fees - COGS [= $105 - $10.42 - 20] = $74.58
Etsy provides several advertising solutions for sellers looking to promote their products, each with its fee structure. Here is an outline of some of Etsy's main advertising fees:
Etsy Ads allows you to advertise your listings within Etsy's platform by placing ads in prominent areas, such as search results and pages within Etsy itself. These advertisements appear prominently and provide great exposure for your listings.
Cost: Etsy Ads operate under a pay-per-click (PPC) model, meaning you pay each time someone clicks on your ad. You can set a daily budget and Etsy will manage bids to ensure as many clicks within that budget as possible.
Budget: The minimum daily budget for Etsy Ads is $1.00. Your budget can be altered at any time to fit your needs.
Etsy will promote your listings on external platforms like Google, Facebook, Instagram, Pinterest and Bing, which customers click through from. In such a scenario, an advertising fee only becomes due if a customer clicks and purchases within 30 days after clicking your ad.
Cost: Offsite Ads charges a fee based on a percentage of total order value (including shipping and taxes).
12% Fee: For sellers with less than $10,000 in sales over the past 365 days.
15% Fee: For sellers with $10,000 or more in sales over the past 365 days.
Participation: Sellers who make $10,000 or more in sales in the last 365 days must participate in
Offsite Ads. Those with less than $10,000 can choose to opt-out.
Set Your Budget: When setting a budget for Etsy Ads, determine how much daily spending is acceptable to you and adjust as necessary based on performance monitoring and adjustments made as part of your ad optimization strategy.
Monitor Return on Investment (ROI): To accurately gauge your return on investment (ROI), compare advertising spending against sales generated through those ads and adjust your strategy according to performance.
Analyse Performance: Use Etsy's advertising analytics to assess which ads and keywords drive the most traffic and sales, providing valuable data that can help refine your advertising strategy.
Include All Costs: It is essential that all costs of packaging, shipping materials, and any additional expenses be considered in your calculations.
Review Regularly: Etsy's fee structure may change over time, so it is advisable to review it periodically.
Utilize Tools: Consider using online Etsy fee calculators to calculate fees quickly.
To accurately determine the costs and profits of each transaction, you need to use an Etsy fee calculator. By computing fees including listing fees, transaction fees, and processing of payment fees unique to Etsy's platform, it assists you in planning pricing strategies, understanding your spending, and optimising your profits. This tool makes sure that financial planning is transparent, allowing you to make well-informed decisions that maximise the profitability of your Etsy business.
Q.1 What is the Etsy listing fee?
Etsy charges a flat listing fee of $0.20 for every item listed; regardless of whether or not it sells, this charge remains active until either four months have passed or until it sells, whichever comes first.
Q.2 What are Etsy transaction fees?
Etsy charges a 6.5% transaction fee on the total sale price. When an item sells, this fee will be deducted from a seller's payment account.
Q.3 What are Etsy payment processing fees?
Etsy charges a payment processing fee which varies based on country. In the US, this typically entails 3% of the total sale price plus a $0.25 flat fee per order processed through Etsy - these fees will be deducted when Etsy processes the payment.
Q.3 What is the Etsy conversion fee?
Etsy charges a 2.5% currency conversion fee when sellers list items in one currency and sell them in another. This fee applies to shipping costs and taxes only once during each transaction.
Q.4 What is the Etsy conversion fee?
Etsy charges a 2.5% currency conversion fee when sellers list items in one currency and sell them in another. This fee applies to shipping costs and taxes only once during each transaction.
Q.5 Is Etsy free to sell?
Etsy is not free for sellers to sell items. While creating an Etsy shop is free, there are various costs associated with selling, such as listing fees, transaction fees, and payment processing fees - sellers should keep these in mind when pricing their items on Etsy.
Q.6 How much does Etsy take in fees?
The total fees Etsy takes can vary, but they include the following:
