Selling on Etsy comes with its own set of rules. I see many people complaining about the cost of fees and how little they make by selling on Etsy. But there are so many benefits to using Etsy. If you take the time to work out how much it costs to sell on Etsy, you can ensure you’re making money on every sale.
There are a plethora of fees involved with selling on Etsy. Lets take a look at each one and see what they do. Then we can look at exactly how much they each cost.
Recently Etsy has brought out a new fee. When you first open your Etsy account you may be charged a set-up fee. This is to cover the cost of Etsy’s enhanced security checks and to provide support for new shops. It’s also a way for Etsy to weed out some of the less genuine people on there. If you’ve got to pay upfront you’re slightly less likely to be dodgy!
Listing fees are all related to putting your item on Etsy to sell. You pay this fee whether your item sells or not. You only pay it when you first list the item to sell. If you list 10 items, Etsy charges you 10 listing fees. If you list 1 item with a quantity of 10 available, Etsy will charge you 1 listing fee. Once you’ve sold an item, or if your listing has expired after 4 months, Etsy will automatically renew your listing (assuming you have it enabled anyway!). You’ll pay the same listing fee again each time this happens. There’s also a multi-quantity fee if you sell more than one item from the same listing. For example, if you listed an item with 5 available and a customer purchased 3 of them. The listing fee is charged for the additional 2 items that you hadn’t put on separately. It’s a little confusing! But it means you aren’t any better or worse off if you put 1 item with a quantity of 5, or 5 individual listings.
The transaction fees are charged after a customer makes a purchase from your shop. When you make a sale, Etsy charges you a percentage of the order amount. This includes any shipping cost and/or gift wrapping you may have charged for.
When you accept payments through Etsy payments, Etsy will charge a fee for the privilege. I know right!? This is the payment processing fee. Etsy charges a flat fee plus a percentage of the total sale price. If your customer uses the integrated PayPal and you are using Etsy payments, you will only pay the Etsy fee and not any additional fees on top for PayPal.
Etsy payments is the primary way for sellers to get paid on Etsy. It’s implied that it’s optional but it really isn’t. If you don’t sign up for it you can’t open an Etsy store. But it lets your buyers pay through credit and debit card, PayPal, Apple pay, Google pay etc.
As we live in the UK, we are one of the few countries required to pay a regulatory operating fee. Etsy states this is because the cost of doing business has increased due to new regulations. Sellers are charged a percentage of the total order price.
If you list your items for sale in a different currency to the one in your payment account, you’ll be charged a fee. This is because Etsy will have to convert the sale amount from your shop currency into your payment account currency. The fee is a fixed percentage of the sale amount.
Offsite ads are when Etsy advertise your products for you outside of Etsy such as on Google, Facebook, Pinterest etc. If a customer clicks on one of these ads and makes a purchase from you, Etsy charges an offsite advertising fee. The downside to this is that the customer doesn’t have to make a purchase straight away. If they make a purchase from you within 30 days of clicking on the ad, you will still be charged the fee.
Currently, the ad fees charged by Etsy are optional if your shop earns under $10,000 in the last 365 days. Go over that amount and the fees become mandatory but they are reduced. I know a lot of people complain about the offsite ads fees for selling on Etsy. But think about how much it would cost to advertise on each platform separately. And that you’d have to pay that amount upfront, whether you sold anything or not. Maybe it’s not such a bad thing after all? Especially if you factor that selling fee into your price.
For a standard Etsy shop there aren’t currently any monthly fees. However, if you sign up for extras then there are. Etsy Plus is a subscription package that provides access to tools for sellers looking to grow their shop. Currently, it provides credits for listings and Etsy ads as well as discounts on domains, packaging and promotional material. It also lets your customers request restocks for sold out items and advanced shop customisations. There is a monthly charge for these benefits.
Pattern is a way for an Etsy seller to have their own website. It will sync your listings across from Etsy to your website. You won’t pay additional Etsy listing fees for having your items on your website. You also won’t pay the Etsy transaction fee for selling an item on your website. Unfortunately, the payment processing fee still applies and you’ll need to pay the monthly charge too.
We’ve looked at the details of all the fees Etsy sellers have to pay. Now let’s look at the actual costs. *These are accurate at the time of writing but by the time you read it the fees may vary.
Set-up Fee: $15
Listing Fee: $0.24
Transaction Fee: 6.5% of the total price + VAT
Payment Processing Fee: £0.20 + 4% of the total price + VAT
Regulatory Operating Fee: 0.32% of the total price + VAT
Currency Conversion Fee: 2.5% of the total price
Offsite Ads Fee: Opt in and it’ll be 15% + VAT. If it’s mandatory as you earned over $10,000 in the last 365 days then it’s 12% + VAT.
Etsy Plus: $10 + VAT per month
Pattern: $15 + VAT per month
Let’s work through a simple-ish example. These fees are calculated by assuming you’re not VAT registered and you aren’t using offsite advertising. *I’ll be using an approximate conversion rate here and rounding where needed. Don’t come for me if they’re a little bit out!
Say you list 1 item for sale at £10. You’ll need to pay the listing fee of £0.19 initially. Once you’ve sold it Etsy collects the transaction fee of £0.78. Also the payment processing fee of £0.72. Finally, Etsy calculates the regulatory operating fee as £0.04. Your total fees payable are £1.73 so you’d make £8.27. This also assumes you haven’t switched on auto-renew to renew your listing. You’d pay another £0.19 if you have.
Working out all the costs associated with selling on Etsy can be very difficult. However, luckily for you I have created a calculator that will work out the total cost for you. Head over here and fill in the details to see the cost of the various fees. You’ll also see how much money you’ll get when you make a sale on Etsy.
There are some fees that sellers have to pay whether they like it or not. And there are others that you can choose to pay.
The following fees are mandatory: Listing fee, transaction fee, payment processing fee, regulatory operating fee and offsite advertising fee if you earned over $10,000 in the last 365 days.
Optional is not really the right word here as some of the fees you do have to pay but there are ways around some of them too. So we’ll stick with optional until I can think of a better word to use! The following fees are optional: Auto-renew fees (if you switch it off you’ll only pay the fee when you relist the item yourself), currency conversion fee (make sure your payment account is in the same currency as your selling price and you won’t pay it), offsite advertising (if you earned under $10,000 in the last 365 days), Etsy Plus and Pattern.
Most of the time, the fees are what they are and you can’t pay less. However, there are one or two things you can do to save a couple of pennies.
If you haven’t done so already, sign up to share and save. Etsy provides you with a trackable link you can share everywhere. When a customer purchases via this link, Etsy refunds you 4% of the order total. I realise it’s not a lot in the grand scheme of things, but it’s better than nothing!
This is a simple one. Make sure your shop currency is the same as your payment account currency. That will be one fee that you can completely eliminate then.
You might want to consider opting out of offsite advertising if you can. If you’ve earned under $10,000 in the last 365 days then Etsy ads are optional. But do check first if they’ve been making you lots of sales. If they’re getting customers into your shop and making you money, it might be worth keeping them.
When you open your shop on the Etsy platform, you can list your first 40 items for free. Usually, you need someone who already has a shop on Etsy to give you a link. However, a quick Google got me a link too. Other than that, I haven’t seen any other offers for new sellers. If you know of any please let me know!
Hopefully this blog post has helped you to understand the different types of Etsy fees and how much they cost. If you factor in the standard Etsy fees into your pricing there’s no reason why you shouldn’t have a successful Etsy store.
Ell Evan Bookkeeping are not Tax Advisors and so our advice and suggestions on the application of tax rules cannot be construed as tax advice.
