You must have these questions in mind if you are trying to start a new Etsy shop: “Are Etsy fees high? How much does Etsy take from each sale?”
Etsy fees can be a confusing topic for Etsy shop owners. There are quite a lot of them and some hidden one that can eat into your profit if you’re not careful.
In this guide, we are going to breakdown all the fees that Etsy charge so you have a better idea of the true cost of selling on Etsy.
Read till the end for a case study for products at different price points and ways to offset the Etsy fees.
For ease of comparison, all the figures in this guide are in USD.
Etsy charges a flat fee of $0.2 for each product/listing you put on Etsy. This applies to both physical products and digital products.
If you sell a product and want to keep it in your shop, you will have to pay the $0.2 listing fee each time.
For example, if a customer buy 3 items from your shop, you will need to pay $0.6 in listing fees.
Listings expire after 4 months. So if the product is not sold and you want to keep it in the shop, you will need to renew the product listing and pay another $0.2. You can either do that manually or set to automatically renew the listing.
From April 11, 2022, every time you make a sale, Etsy charges 6.5% transaction fee to the final price (after any discounts), including shipping, product customisations and gift wrapping.
Etsy has increased the transaction fees two times over the years:
July 16, 2018: From 3.5% to 5%
April 11, 2022: From 5% to 6.5%
Most Etsy sellers will use Etsy Payment, which is Etsy’s own payment processing system, to receive money from customers. It enables sellers to accept a wide variety of payments like credit card, debit card, Apple Pay, bank transfers, Etsy gift card, etc.
Sellers must use Etsy payments if they are in one of the 36 eligible countries including US, UK, Australia, Canada and more.
The fee varies based on the location of your bank account. For most US sellers (or sellers receiving payments from US bank account), the payment processing fee is $0.25 + 3% of the final price with shipping, customisations and gift wrapping.
If you are not in an eligible country, you can use PayPal to accept payments. They have comparable payment processing fees.
Sellers can opt in Etsy Plus, which is a $10 monthly subscription package with these benefits:
If you make use of the listing credits and Etsy ads credits, then essentially you are paying $2 for the other benefits. For a busy shop with one-of-a-kind or limited quantity products, the restock request can be quite valuable to keep customers informed. Or for shops that make use of the discounts to custom boxes and business card printing, the Etsy Plus subscription can be worth it.
Etsy offers in-person selling through Square. Sellers can sync their Etsy shop to their square account, and accept in-person payment through Square. It’s good for local markets, trade shows, etc.
Sellers using this need to pay the Square payment processing fee of $0.1 + 2.6% of final sale price. Or $0.15 + 3.5% for manually entered payments. You don’t need to pay the 5% Etsy transaction fee if you sell through Square.
Pattern is a separate store front for your Etsy shop with some extra personalisation options, including domain name, website layout, font, colour and logo. It’s $15 a month with a 30 day trial period.
Another difference of Pattern than your Etsy shop is that for listings that are only on your Pattern site, you don’t have to pay the listing fee (listings don’t expire) and transaction fee is waived. However, the payment processing fee still apply.
In my opinion, the customisation is somewhat limited. Only a small number of pre-made website layout and fonts are available. And Etsy hasn’t updated or added new options for a while.
If the currency for listing price is different than the payment account currency, then there will be a 2.5% currency conversion fee.
For sellers in some European countries, there is a small percentage fee introduced at July 01, 2021 because of Etsy’s increased costs of operation in those countries. The fee is applied to the final item price plus shipping, customisations and gift wrapping. Sellers in these countries need to pay the regulatory operating fee:
There are two types of Etsy ads: onsite and offsite.
Onsite ads are optional. If you opt into Etsy ads, you will pay every time when shoppers click on your Etsy ads (Pay per click). It’s not charged based on views or sales. Etsy has changed and you can’t bid on the price of the click. All you can do is adjust which listings to promote and the daily budget.
On average, most sellers pay around $0.2-0.5 per click for an Etsy ad.
Unlike onsite Etsy ads, you only need to pay for offsite ads when shoppers actually buy your product after clicking the ads. The offsite ads are displayed on sites like Google, Facebook, Instagram and more.
Although you don’t need to pay if the shopper clicks and not buy your product, the downside is that the Etsy offsite ads fee is very high.
The offsite ads fee is 12% for sellers who made over $10,000 for the last 12 months, and 15% for the rest of the sellers. For sellers who made over $10,000 over the last 12 months, offsite ads is compulsory and cannot be opted out.
Now that we know all the types of Etsy fees, let’s look at a few scenario of a few different products and their Etsy fees.
The 3 products we will look at are at 3 different price points so that you can compare to your situation. I've assigned some realistic prices and shipping costs to them for a good estimate.
Keep in mind that these examples leave out other potential fees like Etsy ads, Etsy plus subscription, currency conversion rate, etc. as they are either optional or shared among many listings. But when you are doing your budgeting, remember to include them.
Our first item is a small bottle of essential oil. It’s a relatively cheap item, and because of its smaller size, the shipping cost is not too high.
Product price: $15
Shipping: $3
Cost of product: $5
Shipping cost: $3
Total product + shipping: $8
Listing fee: $0.2
Transaction fee: 6.5% * (Product price + shipping) = $1.17
Payment processing fee: 3% * (product price + shipping) + $0.25 = $0.79
Total Etsy fees: $2.16
% of Etsy fees of total costs: 21.3%
% of Etsy fees of product price: 14.4%
Let’s look at our second example, which is a mid-range crystal necklace. The price is higher than the first item. It has more packaging and branding material involved, which makes it a bit more expensive to ship.
Product price: $60
Shipping: $8
Cost of product: $20
Shipping cost: $8
Total product + shipping: $28
Listing fee: $0.2
Transaction fee: 6.5% * (Product price + shipping) = $4.42
Payment processing fee: 3% * (product price + shipping) + $0.25 = $2.29
Total Etsy fees: $6.91
% of Etsy fees of total costs: 19.8%
% of Etsy fees of product price: 11.5%
Our last example is a custom wedding gown, which is our high-end item. Because it needs to be in pristine condition when arrived, more packaging and protection is needed for shipping, which makes the shipping costs higher.
Product price: $900
Shipping: $50
Cost of product: $300
Shipping cost: $50
Total product + shipping: $350
Listing fee: $0.2
Transaction fee: 6.5% * (Product price + shipping) = $61.75
Payment processing fee: 3% * (product price + shipping) + $0.25 = $28.75
Total Etsy fees: $90.7
% of Etsy fees of total costs: 20.6%
% of Etsy fees of product price: 10.1%
As you can see from the examples, Etsy fees make up about 20% of the total costs for most sellers, which is not to be overlooked. It’s easy to underestimate the amount of Etsy fees. This is especially true after the increase in transaction fee from 5% to 6.5% in April 2022.
In general, the higher the item sale price, the lower the percentage of Etsy fee compared to the product price.
Keep in mind the other potential fees like Etsy ads and currency conversion fee. If your order comes from an offsite ad, the percentage that Etsy takes could go up by another 15% of your sale price, which means the total could go up to about 35% of the product price.
Many Etsy sellers underprice their craft. That can lead to low profit and an unsustainable business.
Some commonly overlooked costs include: hours used to create the product, labour cost, tools of making the craft, etc.
One of the ways to offset the Etsy fees is to increase your product price. Increasing the price is a good way to increase the perceived value of your craft. Many sellers are surprised that after putting up their prices, their sales didn’t drop.
Good branding can help you charge more for the same product. Learn more about it here.
By listing the product price same as your bank account currency, you can save the 2.5% currency conversion fee.
Etsy ads cost can add up quite quickly if you are not careful. You can control the budget and the promoted listings of the onsite Etsy ads. Experiment and turn off the ones that don’t bring you any sales. Read more about my experience with Etsy ads here.
Think about every aspect of your business and see if there are any potential savings. Some common ideas include:
I've written a step-by-step guide for those of you who want to start an Etsy shop. If you have an hour free, follow this guide to open your very first Etsy shop.
