Opening an Etsy shop can be a fun and relatively affordable way to start a business. However, it is not completely free. Etsy charges sellers a few fees in exchange for the increased visibility and transactional services the site offers. Here’s a guide for those thinking about selling on Etsy.
What are Etsy Fees?
Etsy fees are small expenses a seller incurs when listing products, increasing visibility, or completing transactions on the site. There are several types of fees that sellers should be aware of, including listing fees, transaction fees, and advertising fees. They are described in the sections below. If you’re just starting out on Etsy, get as much information about the platform as you can. This includes starting an Etsy shop and 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 for all purchases. This is calculated based on the item’s retail price, along with any associated personalization or gift wrapping costs. Sellers must also factor in other costs, such as listing fees, shipping charges, and payment processing fees. But this is the main fee charged when sales are made.
Etsy Seller Fees
Etsy charges a variety of fees for everything from listing products to completing transactions. Here are the main ones Etsy sellers need to know.
Advertising costs | $0.20 each
Transaction costs | 6.5 percent of the final sale price
Subscription Fee | $10 a month
Payment Processing Fee | $0.25 plus 3 percent of the sale price
Shipping costs | 5 percent of the shipping costs
Etsy Subscription Fee
Etsy sellers who have regular sales and positive customer reviews can sign up for Etsy Plus. In exchange for a small monthly subscription fee, merchants get tools to support growing businesses, such as additional store customization options, domain extension discounts, 15 free listings per month, and a monthly advertising budget. The Etsy Plus subscription fee is $10 per month and is automatically deducted from your store credit.
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 when the item sells and then automatically renews.
Multiple Quantity Reimbursement
Etsy allows you to list an item with multiple quantities available. You only need to pay the $0.20 listing fee when creating the product. However, if you sell multiple quantities, you will be charged an additional $0.20 for each version sold.
Private Etsy Listing Fee
A private listing is an option if your Etsy shop creates custom items. However, the Etsy listing fees will still apply. So you pay a $0.20 advertising fee for each private listing you create.
Etsy transaction fees are charged when purchases are completed. Etsy charges 6.5 percent of the total price, including personalization and gift wrapping.
Shipping transaction costs:
Etsy also charges a 5 percent fee on the amount charged for shipping. Some Etsy sellers choose to offer free shipping and instead include it in the item’s total sale price. However, that amount would simply be charged the 6.5% transaction fee.
Etsy Payment Processing Fee
Etsy offers its own payment service to provide a consistent experience on the site whether customers pay by credit card or bank account. For transactions using Etsy Payments, US sellers will be charged 3 percent of the sale price, plus $0.25. Payment processing fees vary by country. And buyers may have a choice of other payment services, in which case you would pay fees on those services instead.
How much are payment processing fees on Etsy?
Etsy’s payment processing fees vary by country. US sellers pay a flat rate of $0.25 per transaction, plus 3 percent of the total sale price.
Currency Exchange Fees
Currency conversion fees are charged if the currency of your checking account is different from the currency listed in your store. Etsy will automatically convert the amount for you and charge 2.5 percent of the final sale amount.
Etsy offers a variety of advertising opportunities, including sponsored listings and offsite advertising. You can set your own budget for this, so the advertising costs are what you set in your Etsy ads account.
Offsite Advertising Cost
Etsy also buys offsite ads through various partners such as Google Shopping to increase visibility for sellers. Most stores that set an advertising budget pay 15 percent on the sales made as a result of clicks on these ads. The fee is reduced to 12 percent if your store 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 plan costs $15. And there’s a 30-day free trial.
Pay Etsy Fees
All Etsy fees are calculated automatically each month. The site therefore sets up an account that you can easily pay in your dashboard. Etsy may also automatically charge your checking account if the balance is in place. Here’s how to manually pay your Etsy bill:Go to the Shop Manager section of your dashboard (or More in the Sell on Etsy app)Click on Finance then Payment AccountSelect Pay Now Specify the amount you want to pay – your amount owed should be the default Choose your payment method (you can use a credit card, bank account or online service such as PayPal) Click Send Payment
Avoid Etsy Fees
Etsy charges fees in exchange for using its popular marketplace and payment features. So using Etsy to market products while completing purchases in some other way is considered to be cost avoidance. This could be a message with a customer telling them to pay you through Venmo so you can avoid the transaction fees. This is strictly prohibited by Etsy and may result in your store being closed.
How to Reduce Your Etsy Payments
Aside from avoiding costs, careful shop planning can help you save money while paying Etsy fairly for their services. Here are some tips to reduce Etsy payments.
Etsy allows you to create listings with multiple quantities and variations in colors and sizes. You only pay the initial offer fee of $0.20 for this. And you’ll be charged an additional $0.20 for each variant that is sold, but you don’t have to create multiple offers and pay fees for items that haven’t sold yet.
Using Private Listings
Creating custom items for buyers allows you to use private listings to facilitate purchases without creating new items in your public window. You will still have to pay $0.20 for these offers, but you will not be charged until the buyer completes the purchase. Public listings are charged as soon as you publish. So this step can save money if customers change their mind.
Compare shipping providers
You’ll end up paying Etsy’s shipping costs, whether you charge shipping separately or include it in the cost of the item. However, if you can find a cheaper shipping provider, you will save on those costs and potentially attract more buyers. Additionally, Etsy allows sellers to list digital products such as printable artwork, which don’t require shipping at all. This can help relevant sellers list cheap products and avoid additional shipping costs.
Double check your currency
Etsy charges a currency conversion fee if your Etsy currency does not match that of your bank account. So make sure your currency is set to your home country.
Use auto-renewal only when needed
Auto-renewal can save sellers time when creating offers. However, you do pay $0.20 each time an offer is renewed. So if you have products that are unique or you’re not sure if you’ll continue to offer them, disable this feature to avoid unnecessary costs.
Calculate Etsy Fees
Calculating Etsy seller fees can help you plan and budget for your checking account. It can also inform your decisions when pricing items. Every seller may have a different situation and Etsy cost calculators are available online to simplify the process. Here are the basic costs that sellers should charge:Take the $0.20 listing fee Calculate the product price and take 6.5 percent Add shipping to 5 percent Complete payments with a 3 percent fee plus $0.25 Take into account your self-imposed advertising budget
Etsy Fees Example
Let’s say you sell 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 post Understanding Etsy Fees – Small Business Trends was original published at “https://smallbiztrends.com/2022/03/etsy-fees.html”