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 sellers incur when listing products, boosting visibility, or completing transactions on the platform. Sellers should be aware of various types of fees, including listing fees, transaction fees, and advertising fees, which are detailed in the sections below. If you are new to Etsy, it’s important to gather as much information about the platform as you can. This includes resources on how to start an Etsy shop as well as guidance on 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 frequently make sales and receive positive customer reviews can choose to enroll in Etsy Plus. For a modest monthly subscription fee, sellers gain access to valuable tools designed to support their growing businesses. These tools include enhanced shop customization options, discounts on domain extensions, 15 free listings each month, and a monthly advertising budget. The Etsy Plus subscription fee is $10 per month and is automatically deducted from your shop balance.

Auto-Renew Fee

Etsy sellers have the option to enable auto-renew for specific products, allowing the listing to automatically reappear in their shop after a sale. This process incurs the same cost as listing a new item, which is a flat fee of $0.20 per listing. This fee is charged each time the item is sold and subsequently 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.

Transaction Fees

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 payment 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 payment services, in which case you’d pay fees for 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 apply when the currency of your payment account differs from the currency displayed in your shop. Etsy will automatically convert the amount for you and impose a charge of 2.5 percent on the final sale amount.

Advertising Fees

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 of 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 Fees

The 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 on 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 payment features. So, if you use Etsy to market products while completing purchases in another way, that is considered fee avoidance. This could include messaging 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 its services. Here are some tips for reducing Etsy payments.

Consolidate Listings

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. You’ll be charged an additional $0.20 on each variation that sells, but you don’t need to create multiple listings or pay fees for items that haven’t yet sold.

Use Private Listings

If you make custom items for buyers, private listings enable you to manage those transactions without adding new items to your public storefront. You will incur a $0.20 fee for these listings; however, this fee is only applied when the buyer completes their purchase. In contrast, with public listings, you are charged immediately upon publication. Therefore, using private listings can help you save money if customers decide to 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 help sellers save time when setting up listings. However, you will incur the $0.20 fee each time a listing is renewed. Therefore, if you have unique products or are uncertain about offering them continuously, it’s best to disable this feature to prevent unnecessary Etsy 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

Image: Etsy

This article, “Understanding Etsy Fees” was first published on Small Business Trends