Understanding Etsy Fees
Opening an Etsy shop can provide a fun and relatively affordable way to start a business. However, it isn’t completely free. Etsy charges a few fees to sellers in exchange for the increased visibility and transaction services the site provides. Here’s a guide for those thinking of selling on Etsy.
What are Etsy Fees?
Etsy fees are small charges that a seller must make when listing products, increasing visibility, or completing transactions on the site. There are various types of fees that sellers should be aware of, including listing fees, transaction fees, and advertising fees. They are outlined in the sections below. If you are just starting out on Etsy get as much information about the platform as possible. This includes how to start an Etsy shop as well as other topics such as how to be successful on Etsy.
How Much Does Etsy Charge Per Transaction?
Etsy charges a 6.5 percent transaction fee on all purchases. This is calculated based on the sale price of the item, along with any associated personalization or gift wrapping charges. Sellers must also take other fees, like listing fees, shipping fees, and payment processing fees, into account. But this is the main fee charged when sales are made.
Etsy Seller Fees
Etsy charges several fees for everything from listing products to completing transactions. Here are the main ones Etsy sellers should know.
Listing fee | $0.20 per item
Transaction fee | 6.5 percent of the final sales price
Subscription fee | $10 per month
Payment processing fee | $0.25 plus 3 percent of the sales price
Shipping fee | 5 percent of the shipping price
Etsy Subscription Fees
Etsy sellers who make frequent sales and have positive customer reviews may opt-in to Etsy Plus. In exchange for a small monthly subscription fee, sellers get tools to support growing businesses, like extra shop customization options, discounts on domain extensions, 15 free listings per month, and a monthly ad budget. The Etsy plus subscription fee is $10 per month and is automatically deducted from your shop balance.
Etsy sellers can set certain products to auto-renew, meaning the listing will automatically appear in the shop even after a sale. This costs the same as listing a new item — a flat fee of $0.20 per listing, which is charged whenever the item is sold and then automatically renewed.
Multi Quantity Fee
Etsy allows you to list an item with multiple quantities available. You only have to pay the $0.20 listing fee when creating the product. However, if you sell multiple quantities, you’ll be charged an additional $0.20 for each version that sells.
Private Etsy Listing Fee
A private listing is an option if your Etsy store makes custom items. However, the Etsy listing fee still applies. So you’ll pay $0.20 listing fees for each private listing you create.
The Etsy transaction fee is charged when purchases are completed. Etsy charges 6.5 percent of the total price, including personalization and gift wrapping.
Shipping Transaction Fee
Etsy also charges a 5 percent fee on the amount charged for shipping. Some Etsy sellers choose to offer free shipping and instead roll it into the item’s total sale price. However, that amount would simply be charged the 6.5 percent transaction fee instead.
Etsy Payment Processing Fee
Etsy offers its own payments service to provide a consistent experience on the site, whether customers pay with a credit card or bank account. For transactions that use Etsy Payments, U.S. sellers are charged 3 percent of the sales price, plus $0.25. Payment processing fees vary by country. And buyers may have the choice of other payments services, in which case you’d pay fees to those services instead.
How much are the payment processing fees on Etsy?
Etsy’s payment processing fee varies by country. U.S. sellers are charged a flat rate of $0.25 per transaction, plus 3 percent of the total sale price.
Currency Conversion Fees
Currency conversion fees are charged if your payment account currency is different than the currency listed in your shop. Etsy automatically converts the amount for you and charges 2.5 percent on the final sale amount.
Etsy offers a variety of advertising options, including sponsored listings and offsite ads. You can set your own budget for these, so the advertising fee is whatever you set up in your Etsy ads account.
Offsite Ad Fees
Etsy also purchases offsite ads through various partners like Google Shopping to increase visibility for sellers. Most shops that set an ad budget pay 15 percent on sales made as a result of clicks from these ads. The fee is reduced to 12 percent if your shop has made more than $10,000 in the past year.
Pattern is Etsy’s website-building tool. So sellers can use it to increase reach outside of Etsy’s marketplace. The monthly subscription costs $15. And there is a 30-day free trial.
How to Pay Etsy Fees
All the Etsy fees are calculated automatically each month. So the site compiles a bill that you can easily pay in your dashboard. Etsy can also take fees automatically from your payment account if the balance is there. Here’s how to pay your Etsy bill manually:
Go to the Shop Manager section of your dashboard (or More within the Sell on Etsy app)
Click on Finances, then payment account
Select Pay now
Specify the amount you’d like to pay – your amount due should be the default
Choose your payment method (you can use a credit card, bank account, or online service like PayPal)
Click Submit Payment
Etsy Fee Avoidance
Etsy charges fees in exchange for the use of its popular marketplace and payments features. So if you use Etsy to essentially market products while completing purchases in another way, that is considered fee avoidance. This could include messaging with a customer and telling them to pay you via Venmo so you can avoid the transaction fee. This is strictly prohibited by Etsy and may result in your shop being shut down.
How to Reduce Your Etsy Payments
Aside from fee avoidance, some careful shop planning may help you save money while still paying Etsy fairly for their services. Here are some tips for reducing Etsy payments.
Etsy allows you to create listings with multiple quantities and variations in colors and sizes. You’re only charged the initial $0.20 listing fee on this. And you’ll be charged an additional $0.20 on each variation that sells — but you don’t need to create multiple listings and pay fees on items that haven’t yet sold.
Use Private Listings
If you create custom items for buyers, private listings allow you to facilitate those purchases without creating new items in your public storefront. You still need to pay a $0.20 fee for these listings, but the charge is only made once the buyer completes their purchase. With public listings, you’re charged as soon as you publish. So this step can save money if customers change their minds.
Compare Shipping Providers
You’ll end up paying Etsy fees on shipping, whether you charge separately for shipping or roll it into the item’s cost. However, if you can find a cheaper shipping provider, you’ll save on those fees and potentially appeal to more buyers. Additionally, Etsy allows sellers to list digital products like printable artwork, which doesn’t require shipping at all. So this may help relevant sellers list low-cost products and avoid extra shipping costs.
Double-Check Your Currency
Etsy charges a currency conversion fee if your Etsy currency doesn’t match that of your bank account. So make sure your currency is set to your home country.
Only Use Auto-Renew When Necessary
Auto-renew can save sellers time when creating listings. However, you’ll pay the $0.20 fee each time a listing is renewed. So if you have products that are one-of-a-kind or that you’re not sure about offering on an ongoing basis, turn this feature off to avoid unnecessary fees.
How to Calculate Etsy Fees
Calculating Etsy seller fees can help you plan and budget for your payment account. It may also inform your decisions when pricing items. Each seller may have a different situation, and there are Etsy fee calculators available online to simplify the process. Here are the basic fees for sellers to calculate:
Take the $0.20 listing fee
Calculate product price and take 6.5 percent
Add shipping fees at 5 percent
Complete payments with a 3 percent fee plus $0.25
Consider your self-imposed advertising budget
Etsy Fees Example
Say you’re selling a necklace that costs $50, plus $5 for shipping. Your fees would be:
$0.20 listing fee
$3.25 transaction fee
$0.25 shipping fee
$1.90 payment processing fee
This article, “Understanding Etsy Fees” was first published on Small Business Trends