Before you start any business venture, it is really important to understand what your profit is going to be. When you sell on marketplaces, such as Etsy, the fees are one of the biggest costs you will have.
In this blog I look at the various different Etsy seller fees you will pay so you can work out exactly how much it will cost you to sell your products on Etsy. I’ll also cover Etsy’s payment terms and when you can expect to get paid by Etsy.
It goes without saying that you need to know what fees you’re going to pay on Etsy before you start selling. Without knowing your Etsy seller fees, you won’t be able to work out how much profit you’ll take home from each product you sell.
What are Etsy selling fees?
Etsy is an online marketplace that sells unique handmade, customised and vintage items. It has a huge amount of active sellers and active buyers, so it is a great place to sell your handmade products online.
A lot of sellers, shop owners and handmade business owners I speak to get worried about different types of fees, particularly when they go up which they do from time to time. But when you think about the alternative, seller fees are actually pretty cheap.
When you sell on your own website, you usually have to pay to bring potential customers to your website through Facebook or Instagram ads, or possibly Google ads – these are generally an awful lot more than seller fees. Similarly if you’re selling handmade products at craft fairs or art shows, you’ll usually have to pay to be there plus you have all the time and effort you have to put in to be there. So I think of seller fees as a little thank you to Etsy for bringing me customers.
If you’re already selling on another marketplace like Amazon Handmade, don’t assume that the fee structures are the same – they’re not.
The way Etsy and Amazon charge their fees is completely different and they even have different terminology to complicate things further. I explain this in more depth in “What’s the difference between Amazon Handmade and Etsy”.
Different types of Etsy fees
The good news is that Etsy doesn’t charge a monthly subscription fee or a selling fee, instead it charges 4 separate fees. These are the:
- Listing fee
- Payment processing fee
- Transaction fee
- Advertising fee
Let’s break these down to see how much Etsy takes for each sale.
Listing fee
Etsy charges a $0.20 (£0.16) listing fee for each item you sell on Etsy. This fee applies to each product you sell. For example, if you have 5 identical necklaces which you are selling individually under the same product listing, you’ll be charged $0.20 listing fee for each sale, so if you sell all 5 necklaces you’ll pay $1 (£0.80).
Each listing lasts for 4 months, after which Etsy will automatically renew the listing and you will be charged again. You can turn off automatic renewal in your settings. There aren’t any additional listing fees, but you will need to pay the listing fee on every sale.
You are usually given some listing credits when you sign up for Etsy.
Transaction fee
Etsy payment charges a transaction fee on each sale which is 6.5 % of the product price plus delivery cost.
A little cheeky from Etsy to charge on the shipping, but remember if you offer free shipping then you don’t need to pay a transaction fee on it.
The transaction fee is like Etsy’s commission which it takes from each sale you make in return for running the marketplace and bringing you customers. All markets take a commission, even though they call them different things. Amazon calls it the referral fee for some reason.
When you list your items for sale and set your listing price, you will be able to work out what your transaction fee will be.
Payment processing fee
Etsy payment charges $0.25 + 3% (or £0.20 + 4% in the UK) on all payments made through Etsy payments (also known as Direct Checkout). The payment card processing fee differs depending on the country in which your bank account is located.
With Etsy payments, customers can pay in all the normal ways – credit card,debit card, paypal, Etsy gift card – even Klarna.
So how do these fees stack up against other handmade marketplaces like Amazon Handmade and Not on the High Street? Here’s a handy breakdown of the costs by marketplace:
Advertising fees
Advertising is one area where Etsy is a bit cheeky and you need to keep your wits about you.
When you sign up to Etsy you are automatically enrolled in the Etsy Offsite Ads programme which is basically Etsy’s advertising programme through which it advertises on external sites like Google, Facebook, Pinterest and partner websites.
If you’re a new seller you can opt out of offsite ads. You’re not forced to partake in it until you earn over $10,000.
If you made LESS than $10,000 on Etsy in the last 12 months…
If you made LESS than $10,000 on Etsy in the last 12 months, for example if you’re a new seller, then you can opt out of the programme. If you choose to stay in the programme, you’ll be charged an advertising fee of 15% on every sale that comes from an offsite ad.
If you made MORE than $10,000 on Etsy in the last 12 months…
If you made MORE than $10,000 on Etsy in the last 12 months then you cannot opt out of the programme. You will be charged an advertising fee of 12% on each sale they get from an offsite ad.
These advertising fees are in addition to the other Etsy fees you pay on each sale, but you’ll only pay the fee on sales that come from an offsite ad.
These are different to the Etsy ads that you can pay for separately. Etsy ads are the ads that appear on the search pages of Etsy itself. These can be configured by you in the back end of Etsy.
Etsy Fees example
It’s really important to remember advertising as it can make a big difference to your profit margin. The Etsy Offsite Ads programme is separate to the pay per click ads you can choose to run yourself on your listings.
Some sellers opt out of advertising altogether. Personally, I run some pay per click ads on some of my products because I find it helps get me more organic sales. I review it every few days though to check it’s profitable and I’m not spending loads without getting sales.
Whether you choose to advertise or not, it’s worth factoring it into your sale price so you have the option to advertise at a later date if you choose to.
One advantage of ads is that you can see what keywords shoppers are using when they click on your advertised listing. You can see a long list of all the keywords under Etsy advertising and Manage advertised listings. This data is useful for improving your listing because you can identify extra keywords to add to your listing or see where you’ve got irrelevant keywords you need to remove.
Other Etsy Costs
Shipping Cost
Etsy doesn’t charge a shipping fee, but there are shipping charges that you should factor into your profitability calculations. In the back end of Etsy you can set your shipping price for each of your products. Generally I like to offer free shipping to the customer, as this has the best conversion rate.
Sales Tax
You are responsible for paying the sales tax for any sales, however Etsy does collect this on your behalf for most US states. In the US the sales tax is charged directly the buyer. Here is a quote directly from Etsy:
“Etsy calculates the state sales tax rate (they can vary from location to location, and item to item) for the delivery address, charges the buyer, and sends the tax owed to the state.”
Currency Conversion fees
If a buyer pays for your products in a different currency Etsy will charge you a 2.5% currency conversion fee on the exchange rate. These fees 2.5% of the sales price of the item, including shipping charges. If you don’t want to pay these charges, you can turn off different countries in the back end. You can also select different payment account currencies for your payments.
Etsy Plus
Etsy Plus is for professional sellers who want to start growing faster on Etsy. It is a monthly subscription package which gives you extra features on Etsy including:
- $15 Listing Credits per Month
- $5 Etsy Ads Credits per Month
- A custom brandable URL for your Etsy Shop
- Restocking alerts for your customers when you get back in stock
- Extra store customisation options
Etsy Plus is $10 a month, so if you are using Etsy ads, you might as well use Etsy Plus, as you are getting $5 free ad spend.
In Person Etsy Fees
Etsy shop owners can now sync their Etsy store with their physical stores, which is great for inventory management. You will need to get a square payment card reader in order to take the payments, and once it is set up it is really easy to use.
The fee for square is 2.6% plus $0.10 on each sale. You don’t need to pay the felling fee.
Etsy Pattern Fee
Etsy Pattern is some software that helps you to build personalized websites that are synced with Etsy. This costs $15 a month, but it looks amazing. I used Etsy Pattern for a client and it helped boost Etsy sales and it also helped with search engine optimization.
When do you get paid on Etsy?
One of the huge perks of selling on Etsy is that you can decide when you get paid. You can set up your deposit schedule so you can get paid daily, weekly or monthly. Most other online marketplaces have fixed payment schedules, for example Amazon pays you every 2 weeks.
Just note that you have to have funds of at least $25 of £15 available in order for Etsy to make a deposit. If you don’t have that much available, the balance will keep rolling over until you have the required amount.
For that reason, it’s probably easiest to have your payments set to weekly when first starting out until you build up a regular flow of sales. I have mine set to weekly as I find that works with my cashflow.
Compared to other online marketplaces such as Amazon, Etsy has a huge advantage in the payments, as other marketplaces often make you wait one or two weeks to get your money.
What is a Payment Account Reserve?
Sometimes Etsy will hold back some of your funds due to various reasons, such as if you’re new to the platform, you’ve changed your bank details, or you’ve violated an Etsy policy. Reserves are lifted once you’ve been selling for 90 days providing the issue has been resolved.
How to start selling on Etsy
Selling on Etsy can be great for handmade and vintage businesses as you can reach a huge audience that would be almost impossible to reach just using your own website. However, Etsy can be quite difficult to get started, which is why I made this huge guide on exactly how to start selling on Etsy.
Summary
Fees are a necessary part of getting your products in front of customers! It’s a lot cheaper than running google ads or instagram ads, and at the end of the day Etsy is a business and it needs to make money too.
The main thing is to make sure you factor in all the fees (including some advertising spend) when you are working out how to price your products. That way you can be sure that you’ll be left with a decent amount of profit once Etsy has taken all it’s fees.
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