How Much Does It Cost to Sell on Etsy – Ultimate Guide

How much does it cost to sell on Etsy?

More and more new sellers are choosing the growing Etsy, and we know through Etsy's Q1 earnings report that Etsy added 7M sellers in the first quarter. At the same time, the total number of active buyers reached 89M. As a new or interested seller, we must figure out all the payments that pose an impact on profits. When it comes to business, it is important to be rigorous and serious.

The following is a detailed description of all the possible costs involved in being an Etsy seller for sellers who want to catch the Etsy wave.

• How much does it cost to sell on Etsy (Updates 05/2022)
  • A must spend for sellers
    • Listing fee
    • Transaction fee
    • Payment processing fee
    • Shipping fee
    • Taxes（under certain conditions）
  • Optional fees for sellers
    • Advertising fee: Onsite Ads; Offsite Ads
    • Etsy Plus subscription fee
    • In-Person selling fee
    • Etsy pattern fee
    • Currency conversion fee
    • Regulatory operating fee
• Examples of Etsy fees
• Frequently asked questions around 'How much does it cost to sell on Etsy'
  • How much does Etsy take per sale
  • How to save money on Etsy
  • When do you get paid on Etsy
  • Does Etsy automatically take fees
  • How to pay the Etsy fee
  • When does Etsy charge your card

How much does it cost to sell on Etsy？

Regarding the cost components, here we will give you two parts of the presentation, please note that the cost of goods and labor is not included here, as each person markets different goods and on a different scale

• One part is the amount necessarily incurred to satisfy the transaction
• The other part is the amount that is optional based on the marketing strategy

A must fee for sellers

Listing fee

Each time you add a new set of products or create a new listing, Etsy will charge you 20 cents as a listing fee. This applies to both physical products and digital products.

For example, say you have 10 identical necklaces that you are selling individually. You can list all of these necklaces under the same product page, but after each one sells, you must pay another $0.20 to renew the listing. If you sell all of these necklaces, you pay a total of $2.00 in listing fees.

Detailed scenarios about listing fee

• Sold out: This is a renewal fee for your listing when your product is sold out. It means each time an item is purchased from your store, Etsy will automatically send you a request to repost your listing. 
• Bundled sales: if you sold a pack of ten necklaces as one item, you would pay only one $0.20 listing fee.
• Expired: if the product is not sold for 4 months, if you still want to keep it in the store, you will need to update the product list and pay another $0.20.
• Auto-renew: for the above scenario, if you set up the auto-renew for your listing status, you can save time manually reposting products. It will cost 20 cents for each new listing.

Transaction fee

When you make a sale through Etsy.com, you will be charged a transaction fee of 6.5% of the price you display for each listing plus the amount you charge for shipping and gift wrapping. 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.

As of May 18, 2022, Etsy has made a total of two transaction fee changes

1. April 11, 2022: From 5% to 6.5%
2. July 16, 2018: From 3.5% to 5%

Payment processing fee

As sellers, we need to collect customers' money, Etsy supports two ways to collect online, one is official ‘Etsy Payment’ and the other is ‘Paypal‘, both of which will charge a payment processing fee.

• For most US sellers, Etsy Payments charges 3% + $0.25 per transaction. The fee varies depending on the location of your bank account. This allows you to accept payments by credit card, debit card, Etsy Gift Card, Etsy Credit, PayPal, some bank transfer services, Apple Pay, and Google Pay. You can also allow your customers to pay using their PayPal accounts. Etsy Payments rates will apply to these payments instead of PayPal rates.
• Sellers must use Etsy payments if they are in one of the 36 eligible countries including the US, UK, Australia, Canada and more. 
• If you are not in an eligible country, you can use PayPal to accept payments. They have comparable payment processing fees.

Shipping fee

Etsy offers sellers in certain locations the ability to purchase shipping labels to fulfill their orders. The cost of the shipping label will depend on the shipping carrier and the origin, destination, weight, and dimensions of the package. If you add signature confirmation or insurance, those fees will be added to the total cost of the label at the point of purchase. Sellers who purchase shipping labels may also purchase parcel insurance through licensed insurance carriers. U.S. Sellers who purchase USPS shipping return labels will be charged after delivery of the returned package. You must accept Etsy Payments or PayPal as payment methods to purchase shipping labels through Etsy. Shipping fees and any adjustments are reflected in your payment account and deducted from your current balance.

Taxes (under certain conditions)

The federal IRS requires that if the transaction amount reaches $20,000 and the number of orders reaches 200 in a natural year, you will receive a 1099K form and taxpayer information materials for tax payment.

• What is a Form 1099-K?
  • Etsy's Form 1099-K is the total sales revenue received by the store through Etsy Payments for the previous natural year. "Total sales" includes all sales, as well as shipping, refunds, card processing fees, sales tax collected using the sales tax tool, and even, cancelled orders.
• When will I receive my Form 1099-K?
  • Etsy will send out 1099-K forms or download the forms to qualified sellers by the end of January. Beginning in 2018, one can sign up to have a 1099-K form emailed to the platform. If you have met the 1099-K requirements yourself through Etsy Payments but have not received a 1099-K form in the mail by the end of February, you can sign up for electronic delivery or get in touch with the platform for support.

Optional fees for sellers

Advertising fee

Over the past few years, Etsy has rolled out some marketing tools for users. These include onsite and offsite ads, which of course come with their fees. Here’s a rundown of these fees:

• Etsy’s Onsite Ads: onsite ads are optional. If you opt into Etsy ads, you will pay whenever shoppers click on your Etsy ads (Pay per click). It’s not charged based on views or sales. Etsy has changed and you can’t bid on the price of the click. All you can do is adjust which listings to promote and the daily budget. On average, most sellers pay around $0.2-0.5 per click for an Etsy ad.
• Etsy’s Offsite Ads: when you sign up to Etsy you are automatically enrolled in the Etsy Offsite Ads program which is Etsy’s advertising program 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. With a threshold of 10.000 USD annual revenue (365 days), there will be two types of rates.

Etsy Plus subscription fee

Etsy offers users two subscription options for seller accounts: the free Standard Plan and the for-purchase Plus Plan. Here’s what each plan offers.

• Etsy Standard Plan Pricing: Etsy's Standard Plan is a free seller account with all the basic tools that allow users to list products on Etsy, purchase, and print discounted postage, and market their products through sales and coupons. The Standard Plan also allows you to access the Sell on Etsy App.
• Etsy Plus Plan Pricing: Sellers can opt-in to Etsy Plus, which is a $10 monthly subscription package with these benefits
  • Extra customizations for shop front (extra shop banner types, featured listing layout)
  • Restock requests for sold out items
  • $5 Etsy ads credit per month
  • 15 listing credits per month ($3 value)
  • Discount for packaging and promotional materials like business cards and custom shipping boxes
  • Free .store domains or 50% off domain for .com, .net
• If you make use of the listing credits and Etsy ads credits, then essentially you are paying $2 for the other benefits. For a busy shop with one-of-a-kind or limited-quantity products, the restock request can be quite valuable to keep customers informed. Or for shops that make use of the discounts on custom boxes and business card printing, the Etsy Plus subscription can be worth it. However, one thing to take note of is that your payment account will be added to the subscription fees on the same day every month in your domestic currency. This is called as Auto- renew feature on Etsy. For example, if you sign up on March 3rd, you will need to pay a subscription fee automatically on April 3rd, May 3rd, and so on.

In-Person selling fee

Etsy has partnered with Square to offer sellers an option for in-person selling. Etsy sellers may sync their Etsy store to their Square account for a holistic selling solution. It’s good for local markets, trade shows, etc. To accept in-person payments, you’ll need a Square card reader. 

• When you accept payments in person for items that you have listed on your Etsy site, you’ll pay the usual listing fees as well as Square’s payment processing fees. You will not pay the 5% Etsy transaction fee.
• Sellers using this need to pay the Square payment processing fee of $0.1 + 2.6% of the final sale price.
• For manually entered payments, you are charged a fee of 3.5% of the sale price plus $0.15.

Etsy pattern fee

If you’re looking to build a more personalized website to sell your products, Etsy has a solution for you. Pattern is web-building software that allows you to develop your store that is still connected to your Etsy seller account. Pattern is a separate storefront for your Etsy shop with some extra personalization options, including domain name, website layout, font, color, and logo. Pattern is available for a 30-day free trial. After that, you are charged $15/month, plus tax where applicable.

If you already had a product listed on Etsy, and you also want to list it on Pattern, you do not need to pay an additional listing fee (you have already paid one to Etsy). Pattern listings do not expire, so you don’t have to pay renewal fees, either.

Currency conversion fee

If the currency for the listing price is different than the payment account currency, then there will be a 2.5% currency conversion fee.

• Nonetheless, Etsy payment users in Bulgaria, Czech Republic, Hungary, Croatia, Romania, and Poland will have all fees deducted from their payment account in their designated payment account currency, the Euro.
• You can avoid Etsy’s currency conversion fees by receiving payments via PayPal.

Regulatory operating fee

For sellers in some European countries, there is a small percentage fee introduced on July 01, 2021, because of Etsy’s increased costs of operation in those countries. The fee is applied to the final item price plus shipping, customizations, and gift wrapping. Sellers in these countries need to pay the regulatory operating fee

Examples of Etsy fees

It is recommended that you try the online Etsy Fees Calculator directly, you only need to input, no manual calculation is required, and it also supports the calculation of labor costs, advertising costs, etc., saving time and convenience.

Take a necklace as an example, how much does it cost to sell on Etsy? The price is relatively high, while it involves more packaging and branding materials, which makes shipping more expensive.

• Product price: $60
• Shipping: $8

• Cost of product: $20
• Shipping cost: $8

• Listing fee: $0.2
• Transaction fee: 6.5% * (Product price + shipping) = $4.42
• Payment processing fee: 3% * (product price + shipping) + $0.25 = $2.29
• Total Etsy fees: $6.91

• Estimated Profit: $33.09
• Estimated Margin: 48.66%

Frequently asked questions around 'How much does it cost to sell on Etsy'

How much does Etsy take per sale

As you can see from the example, Etsy fees make up around 20% of the total cost for most sellers, which cannot be ignored. It's easy to underestimate Etsy's fees. This is especially true after the April 2022 increase in transaction fees from 5% to 6.5%.

In general, the higher the selling price of the item, the lower the Etsy fee as a percentage of the product price.

Keep in mind other potential fees, such as Etsy advertising and currency conversion fees. If your order comes from off-site advertising, the percentage Etsy charges may increase another 15% of your sale price.

How to save money on Etsy

• Increase Prices: many Etsy sellers underprice their craft. That can lead to low profit and an unsustainable business. Some commonly overlooked costs include: hours used to create the product, labor cost, tools for making the craft, etc. One of the ways to offset the Etsy fees is to increase your product price. Increasing the price is a good way to increase the perceived value of your craft. Many sellers are surprised that after putting up their prices, their sales didn’t drop.
• List Your Prices In The Same Currency As Bank Account: By listing the product price the same as your bank account currency, you can save the 2.5% currency conversion fee.
• Choose What Listings To Run Etsy Ads On: Etsy ad costs can add up quite quickly if you are not careful. You can control the budget and the promoted listings of the onsite Etsy ads. Experiment and turn off the ones that don’t bring you any sales.
• Advertise On Other Platforms: Advertising to a social media following, starting a blog, and guest posting on other platforms are easy, free eCommerce marketing strategies to increase web traffic and get people to your Etsy storefront.
• Cut Production & Shipping Costs: this is the next obvious step. Rethink the way you handle both production and shipping. Is there any way you can make your products more quickly or more affordably without significantly impacting quality? And when it comes to shipping, are you comparing options from multiple shipping carriers to make the most cost-effective decisions possible? If there’s an area where you can lessen your expenses, do so.
• Show Up To In-Person Events: in-person Square fees are much cheaper than Etsy transaction and payment processing fees. So, instead of just redirecting people directly to your Etsy store, sell at in-person craft shows or host your events to get those in-person customers.
• Don’t Keep Stale Listings: because your listings renew every four months (at an additional $0.20 fee each time), make sure the products you list on your store move within four months. Etsy’s new search engine algorithm prioritizes more recent listings, and if you want to rank higher in Etsy search results, you need to have fresh listings. Plus, if you keep paying for items that don’t sell, you might end up paying more in fees than the product is worth.

When do you get paid on Etsy

One of the great things about selling on Etsy is that you can decide when you get paid. You can set up your deposit schedule so that you can get paid daily, weekly or monthly. Most other marketplaces have a fixed payment schedule like Amazon pays every 2 weeks.

Note that you must have at least $25 of the £15 available to deposit on Etsy. If you do not have that much available balance, the balance will continue to roll over until you have the required amount.

For this reason, it's probably easiest to set up your payments to be weekly at the beginning until you've established normal sales traffic. I set mine to weekly as I find that works for my cash flow.

Does Etsy automatically take fees

Your Etsy fees will be automatically deducted from the revenue you make on Etsy if you’re a participant in Etsy payments. Etsy will simply take the fees you owe them from the sales you made and then transfer what’s left to you.

If you’re not a participant in Etsy Payments, you will have an amount due each month, which you can pay through your Etsy account -> Shop Manager -> Finances -> Payment Account -> Amount Due -> Pay Now.

If you’ve listed items on Etsy but have not made any sales, you’ll have to pay the amount due (from listing fees, ad costs, or others) since there isn’t revenue to deduct fees from.

How to pay the Etsy fee

1. From Dashboard, choose Finance then go to Payment account on your Etsy Shop manager.
2. Select Pay now under Amount due.
3. Select the amount you’d like to pay and choose the payment method.
4. Select Submit Payment.

When does Etsy charge your card

Etsy will charge your card on the first of the month if you’re a US-based business and are enrolled in auto-billing. If you aren’t enrolled in/aren’t eligible for auto-billing and have an amount due, you can pay that amount between the 1st and the 15th of the month. When you make a sale through Etsy Payments, your fees will automatically be deducted from the amount Etsy pays you for your sales. If you have enough sales in a month to cover all your fees, you won’t have an amount due and Etsy won’t charge your card/you won’t have to make a payment to Etsy.

If you don’t pay your amount due by the 16th of the month, Etsy may suspend your shop. They may also restrict account privileges, such as removing your Star Seller Badge, blocking you from creating new listings, or renewing existing listings. Etsy also reserves the right to use a third-party collection agency to help them collect a payment.

Final words

That’s everything you need to know about the Etsy seller fees, from Listing fees, and transaction fees to subscription and ads fees. In a nutshell, Etsy pricing is quite competitive, and it’s quite cheap to maintain a store. The only thing that is not so affordable is shipping transaction fees.

Want to find more profitable products? Want to increase the exposure of products? Want to increase the number of good reviews? Come and experience Etsyhunt.com, a one-stop tool for Etsy sellers. If you need more information or related questions, please leave me a message at [email protected]

Good luck!

How much does it cost to sell on Etsy? Share it with others!