Etsy was supposed to revolutionize what it means to be a talented home-artist, handmade artisan, or vintage expert.
However, when it comes to running your own business, you’ll have to deal with the numbers at some point!
Will it work out for you to commit more time and resources to an Etsy Shop? How much does it actually cost?
In this article, we’ll break down the various and variable fees involved in running an Etsy Shop so that you’re well informed when you go into a new and exciting venture!
A Breakdown Of Etsy Fees
Etsy Listing Fees
Setting up the shop is free, but each listing has a $0.20 fee.
This will be valid for four months, and then will require another $0.20 to re-list.
Auto-Renew Sold Fees
The $0.20 listing fee is consistent across all listings. If you have, say, 5 versions of the same mug that you produced in a single pottery session, then you can put them all under one listing.
Once one sells, you will be automatically charged $0.20, and the listing will be renewed for another four months.
You can also auto-renew a listing that has had no action. Simply open “renewal options” in the Listings Manager.
Switch the listing from “manual” to “automatic”, and the listing will stay up permanently- charging you $0.20 every 3 months.
Multi-Quantity Listing Fee
Multi-Quantity is just another way of phrasing Auto-renew. Adding a Multi-Quantity listing costs the usual $0.20.
Each time an item sells, the listing is renewed for another four months, and you are charged $0.20.
Etsy Transaction Fees
When you make a sale through Etsy, the website automatically takes a transaction fee. As of the 1st of December 2022, this is 6.5% on everything.
This includes the displayed price of the item, as well as shipping, gift wrapping, and optional personalization fees. The only time this transaction fee doesn’t apply is sales tax if you’re based in the US.
It gets a little more complicated with international sales and currency conversions, so check the section below for more details.
Etsy Payment Processing Fee
Payment processing fees are very difficult to nail down, due to their dependency on which bank you use and where in the world your bank account is located.
On their policy website Etsy gives this description:
“The payment processing fee is assessed on the total amount of the sale, including tax and postage. Payment processing fees are deducted from the sale amount in your payment account.”
Payment processing fees are usually handled by your bank, but if you are using Etsy Payment, then a small payment processing fee is applied. This is usually 3%, plus $0.25 per transaction.
Most transactions on Etsy involve Etsy Payment, because it allows a wide variety of payment forms like gift cards, financing services like Klarna, mobile apps like Apple Pay, or payments from different currencies.
It may seem annoying getting charged 3% on most transactions, but at the end of the day, it’s worth it. You don’t have to deal with the administrative nightmare of all the different types of payment customers will use to buy your goods!
Etsy Subscription Fee
There are two types of Etsy accounts: Etsy Standard, and Etsy Plus.
Free! Allows you to create an Etsy account, buy and sell items.
USD $10/ Month. Comes with:
- A monthly budget of credits for listings and Etsy Ads
- Access to a discount on a custom web address for your Etsy shop
- Restock requests for shoppers interested in your items that have sold out
- Advanced shop customization options
- Access to discounts on custom packaging and promotional material like boxes, business cards, and signage
- Does not come with other paid Etsy services, such as Etsy Ads, Pattern, and Etsy Shipping Labels
Etsy In-Person Selling Fees
You can use the Etsy-synced app, Square Reader, to process in-person payments. Square has its own set of transaction fees that can be found Here.
Square has different fees depending on the type of transaction, E.G, debit card mag strip, or credit card paywave.
In person transactions can be synced up to your online account for a fee of $0.20. If you choose this option then multi-quantity listings will still function the same as if an online transfer was made, and single-quantity listings will automatically be taken down.
Etsy Pattern Fee
One of the services Etsy offers is a website builder called Pattern.
Etsy Pattern is more affordable than competing website builders, at only $15USD per month plus the usual Etsy Payment rates.
This is because it is only designed as a shop website builder, and should not really be used for other purposes.
Pattern charges a 2.5% currency conversion rate, and there are no listing charges to listings made only to your Pattern website.
Currency Conversion Fee
Etsy will convert your Etsy Payments sales amounts from your shop currency into the currency of your payment account. You will be charged a 2.5% currency conversion fee on the sale amount.
Currency Conversion Fees are subtracted from your payment before it reaches your account.
Regulatory Operating Fee
Regulatory Operating Fees are applied when you sell an item. The fee varies from 0.25% to 1.1% of everything, including gift wrapping, optional personalization, etc.
Regulatory Operating Fee is supposedly designed to offset the differing prices and taxes of operating their website in various countries.
They have not disclosed the list of countries it applies to on their website, nor what percentage you will be paying in those countries.
One of the other services Etsy offers is an Advertising Network that runs through their website via promoted listings, and offsite, too.
Etsy Ads could probably have its own article written about it, so I’ll just give an abbreviated description of the pricing.
They have a function on the website to track the performance of your ads, so that you can see if it is worth the money.
Onsite Ads/Promoted Listing
You can adjust your advertising budget on the fly, and they will increase your maximum budget if you are consistently paying your bills on time, whilst at the maximum ad budget.
Your listings might be shown in Etsy Search, Category Pages, Market Pages on both Etsy.com and the Etsy app.
Etsy Offsite Ads are free. The only catch is that you can’t apply for them, or have them increased.
Etsy offsite ads function partly as an advertisement for the website in general, but they tailor the types of listings they display to fit with the customer’s needs.
If you run an Etsy store selling custom beads, then someone searching the web for beads might find your listing advertised!
Example Breakdown And Estimate Of Etsy Fees:
Here is an example of the total cost for selling on Etsy:
For instance, let’s say you’re selling a handmade piece of jewelry – a custom sterling silver ring for $50.
Listing the ring will cost you only 20 cents. Say you produced a lot of rings, and the customer wanted to buy one for everybody in their six person family. That’s $0.20 times six, or $1.20.
Shipping Fee (Paid by customer):
Shipping is usually built into the price of the item. Say it costs $10 to ship a small box with six rings. 6.5% of the shipping cost will be added as a shipping transaction fee.
So, in this case, it’s $0.65.
The transaction fee is paid by the seller. It’s taken before the money arrives in your account.
The transaction fee is 6.5% of the total cost of the item.
Payment processing fee (Only applicable if you use Etsy Payment):
If you live in the US then the Payment Processing Fee will be 3% of the total sale, plus $0.25.
In this example the items cost 6 times $50, or $300. Plus shipping, this is $310.65.
Six listing fees- this is $1.2.
Transaction Fee: 6.5% of $310.65 = $20.19
Payment Processing Fee: 3% of the total sale, plus $0.25. In this case, it is $9.56.
Total Sellers Fee on this transaction: 1.2 + 20.19 + 9.56 = $30.95.
What Percentage Does Etsy Take For Sellers?
At the end of the day, you sold 6 rings on Etsy for $310.65 including shipping. Etsy’s share of this is $30.95.
If you want to calculate your Etsy fees quickly, have a search around for the many Etsy fee calculators that are available online.
Some calculators will even be able to calculate your profit automatically!
Additional Costs That Come With Opening An Etsy Shop
Some costs you may not have considered of opening an Etsy Shop are ones associated with opening any kind of shop, namely, branding and packaging.
Branding on Etsy is mostly about your online presence. You might want to work with a designer to sort out the branding for your page.
Things to consider are a logo, a shop cover photo, a mood board, and even good quality photography of your products (including color palette design choices).
This can cost anywhere from under $100 to thousands- it all depends on the designer.
We are living in the social media age, and you might also want to consider running a social media page or two to help promote your work.
If you find this difficult, or don’t have the time, you might want to consider hiring a social media manager. Prices for this can also range drastically!
This is, again, its own whole article. Packaging design is its own whole job, but I would recommend not spending too much on packaging.
People buying from Etsy want that touch of homemade feeling. Customers also tend to appreciate non-plastic packaging, so look into paper and cardboard where you can.
How To Save Money On Etsy Fees
Don’t undervalue yourself! The right prices will make sure your business stays profitable. People are always willing to pay for quality on Etsy.
List Your Prices In The Same Currency As Bank Account
This can help you save money on currency transfer fees.
Choose What Listings To Run Etsy Ads On
Use the Etsy Ad diagnostics, and find the products that are most clicked on. If something isn’t working, then don’t waste money pushing it.
Cut Down Costs The Smart Way
There are businesses that can work with you to supply shipping and packaging tools, coupons, and more. Don’t waste money when you don’t have to.
Apply Flat Rate Shipping
Flat rate shipping means you offload the costs of shipping to the customer.
Bundle Your Items
People love deals! Bundles and discounts just make us want to buy things.
The Bottom Line
Starting a business- even just an Etsy online shop- can be daunting.
Use an Etsy calculator, and remember that roughly 10% of your sale will go straight back to Etsy in the form of fees before you see the money.
There’s certainly a lot to take into consideration; start by learning how the Etsy fees system works, and thinking about what other kinds of costs you’ll have to consider.
It’ll help you with one of the most essential decisions you will need to make: Choosing the right pricing for your products!