Etsy Fees Explained

Hey friends! 

Today's post is about Etsy Fees and is something I get asked all the time, especially by new Etsy sellers who don't understand exactly how it works.

As with any business, it's so important to know your numbers, because it's THE ONLY WAY TO GROW YOUR BUSINESS  Let me say it again...

KNOWING YOUR NUMBERS IS THE ONLY WAY TO GROW YOUR BUSINESS!

I know that seems like I have simplified it a bit.  AND yes, there are many factors that go into a successful Etsy Shop, including have a well researched product, knowing SEO, etc.... BUT, it all starts with knowing your numbers.

So let's start with the basics:

Listing Fee: When you list an item on Etsy, there is a $0.20 listing fee. This fee is charged for each item that you list for sale, and it is valid for four months or until the item sells. In addition, it is charged every time a product is sold and the listing is renewed.

Transaction Fee: A transaction fee of 6.5% is charged on the total sale price of each item, including the cost of shipping and any applicable taxes. This fee is assessed for each item that is sold through Etsy.  Recently, Etsy increased this from 5% and while many Etsy sellers were upset, it's the cost of doing business and is still very affordable compared to many other marketplaces.

Payment Processing Fee: Etsy uses third-party payment processors, such as PayPal and Direct Checkout, to process payments. These processors charge a fee for their services, which is typically around 3% + $0.25 per transaction. As a seller, you will be responsible for paying these fees in addition to the transaction fee charged by Etsy. As these fees change from time to time, always double check.

Shipping Label Fees: Etsy sellers have the option to purchase shipping labels through the platform. Shipping labels purchased through Etsy will include a discounted rate and shipping label fee, The label fee varies based on the location you are  shipping to, the weight and dimension of the package, and the shipping method.

Advertising Fees: Etsy sellers also have the option to promote their listings through paid advertising campaigns. These campaigns can be targeted to specific search keywords and geographic regions, and the cost of advertising is based on the amount you bid for each click.  In addition, unless you opt out, Etsy automatically enrolls you in their Off-Site Ad program.  The cost depends on how much $$ you have made on Etsy in the past 12 months. Here is what Etsy says in their handbook:

The offsite advertising fee depends on the revenue you’ve made on Etsy in the past 365 days:

• If your Etsy shop made less than $10,000 USD, you’ll be charged a 15% fee for an order attributed to an Offsite Ad on the amount you made from your sale before the advertising fee was applied.
• If your Etsy shop made at least $10,000 USD, you’ll get a discounted fee of 12%. 

The offsite advertising fee for an order will never exceed $100 USD, regardless of the order total for an order attributed to an Offsite Ad. Learn how orders are attributed to Offsite Ads.

If you’re a seller with a shop currency other than USD, your revenue total is calculated from your order amounts converted to USD with the currency exchange rates Etsy used at the time that the sale was processed.  

Etsy Plus subscription: It is an optional subscription for seller to increase visibility and features, but it costs $10 per month. Etsy will automatically deduct this fee from your account each. month.

Product Costs: What did the product cost you to make? This should include everything that went into making the product.  This will be different for everyone and for every product, but keep detailed notes on the costs.

Please note that there are additional fees if you are not using US currency, but this should give you a great starting point.  Happy Selling!