When you’re starting a business, one of the most important things to figure out is how much it’s going to cost you. This is especially true when it comes to selling on Etsy.
There are a lot of factors that go into calculating the cost of selling on Etsy, and it can be tricky to get an accurate estimate. In this blog post, we will break down all of the expenses that you may incur when selling on Etsy. By understanding what these costs are, you can plan for them and make sure your business is profitable!
How Much Does It Cost To Have An Etsy Shop
In this section, we will discuss the costs associated with setting up and maintaining an Etsy shop.
If you don’t know then It is free to open an Etsy shop. However, there are a few other fees related to listings and transactions that we will take a look at in a while.
How Much Does Etsy Take?
Etsy offers users two subscription options for seller accounts: the free Standard Plan and the for-purchase Plus Plan. The Standard Plan is free, but you cannot use some customization features that are only available in Etsy Plus Plan.
Etsy Free Standard Plan:
This plan gives you everything you need to start selling on Etsy. You can have up to unlimited listings, and you don’t have to pay any monthly fees. However, you will still be charged a listing fee and a transaction fee with some other taxes whenever you make a sale.
Etsy Plus Plan:
This plan costs $10 per month, It gives you everything that is included in the standard plan plus some other cool features like custom URL, advanced shop customization, etc.
These additional features can be very helpful for your business. For example, you get to use Custom URL for your shop, which allows you to brand your shop.
Here are some benefits you get every month with an Etsy Plus Plan:
- A custom URL for your shop: This can be helpful for branding your shop.
- Advanced customization options for your shop: You can change the look and feel of your Etsy shop to match your brand.
- 15 Listing credits that can allow you to post or renew 15 listings without any listing cost, which is equivalent to 3$ as 1 listing costs 0.20$.
- $5 Etsy Ads credit: This is an advertising credit that you can use to promote your listings.
- Free .store domains
- Some other discounts on domains, packaging, and promotional materials
What Are Etsy Fees
Etsy fees are the fee that you pay to Etsy to list, sell and process your items.
Now you must be wondering what are Etsy selling fees?
Now let’s take a look at all of the fees that you will incur when selling on Etsy and how does Etsy fees work.
Etsy Listing Fees
When you list an item for sale on Etsy, you will be charged a listing fee. This fee is currently $0.20 per listing, and it is charged when you create a new listing or renew an existing one.
Each listing expires after 4 months, and you can renew it for another $0.20 fee.
Let’s understand this with an example, let’s say you list 3 items today on Etsy, then it will cost you $0.60 (0.20$x 3 listings).
Now the 0.20$ that you paid per item is the cost of listing that item on Etsy for the next 4 months.
Now, let’s say after 4 months you have a total sale of 10 on product 1 and the rest 2 products haven’t generated any sale.
So now, the 10 sales that you have made on product 1 will cost you a total of $2 (0.20$ x 10 renews or sales)
And because the other 2 items haven’t generated any sales they will get auto-renew and will cost you an additional 40 cents (0.20$ x 2 renews) to keep those 2 listings active for the next four months.
The listing cost of 20 cents per renewal will remain the same whether you have a free Etsy Standard plan or a paid Etsy Plus plan.
Etsy Transaction Fees
Etsy transactions fees are the fee they charge as the cost of using or doing business on their platform.
Etsy charges 5% transaction fees of the price of your product including the cost of customizations and gift wrapping.
For sellers in US and Canada, if you include the cost of sales tax in your listing price, then Etsy does not charge transaction fees on sales tax.
But, if you’re a seller outside of the US and Canada, these transaction fees might include the cost of some applicable taxes.
Payment Processing Fees
Etsy has its own payment gateway named Etsy Payments, which is available to sellers in a few eligible countries including the US, UK, Canada, Australia, etc.
If your shop is not located in a country where Etsy Payments is available, you can direct your buyers to pay you through PayPal.
You’ll still be charged the standard transaction fee on the orders that are paid through PayPal.
Now if you are using Etsy Payments, you will be charged 3% + $0.25 per transaction as a payment processing fee.
If you are using any other payment gateway, let’s say PayPal, then you will be charged the PayPal’s standard transaction fee or payment processing fees, which is around 2.9% + $0.30, but I suggest you read that on PayPal’s official website because they keep on changing their fee structure.
Etsy Shipping Transaction Fees
Yes, Etsy also charges fees on shipping transactions.
Currently, Etsy charges a flat rate of 5% of the total shipping cost paid by your customers.
You can offer free shipping to your customers, but even in that case Etsy will charge you the shipping transaction fee and you have to pay it by yourself.
The sellers who offer free shipping have to increase the product prices because they have to incur this shipping transaction cost themselves.
But it’s a great way to attract buyers and get sales because customers love free shipping.
Etsy’s Currency Conversion Fees
If you list your products in a different currency than that of your payment account then Etsy will charge you a currency conversion fee of 2.5%.
So I suggest you list the products in the same currency as mentioned in your payment accounts.
This will avoid foreign exchange charges and save you from Etsy’s currency conversion fees.
Etsy’s Ad Fees
You can opt for Etsy ads to drive traffic to your shop and product listings.
You can run Ads on Etsy itself to target buyers who are already searching and shopping on Etsy.
This is completely optional but I have seen many sellers using Etsy ads and they are getting great results in terms of traffic and sales.
There are 2 types of Etsy Ads.
1) Etsy Ad’s
Etsy ads are cost-per-click (CPC) advertising, which means you’ll be charged every time someone clicks on your ad.
The amount you’re charged per click will depend on how competitive the keywords you’re targeting are.
You can set a daily budget for your Etsy ads, and you’ll never be charged more than that amount in a day.
The main drawback here is that you’ll be charged even if the person who clicked on your ad doesn’t buy anything from your shop.
So, it’s important to make sure that you’re targeting the right keywords and that your ads are relevant to what you’re selling.
2) Etsy Offsite Ads
On the other hand, Etsy Offsite Ads are cost-per-sale, which means you’ll only be charged when someone clicks on your ad and then makes a purchase from your shop.
Etsy will charge you 15% of the product cost if someone buys your product by clicking on offsite ads.
No matter how many clicks you get on ads, you’ll only be charged when someone buys your product.
Isn’t it amazing?
If you want to know more about Etsy offsite Ads then check out our Etsy Offsite Ads Guide.
How To Calculate Etsy Fees?
Now you know all the fees that are involved in selling on Etsy and now you may be wondering how much does Etsy take from seller?
You can use this information to calculate your own Etsy fees.
To do this, you’ll need to know a few things:
– The price of your product
– The shipping cost
– The currency you’re listing your product in (if different from your payment account)
– The cost of any ads you’re running
Once you have that information, you can use some basic math to calculate the Etsy fees for your products.
Q. Do I have to pay Etsy fees if I don’t make a sale?
A. No, you only have to pay Etsy fees when you make a sale. You’ll only be charged the listing fee for listing that product on Etsy’s platform.
Q. Do I have to pay Etsy fees if I offer free shipping?
A. Yes, you’ll still be charged the shipping transaction fee even if you offer free shipping to your customers. However, this is a great way to attract buyers and get sales!
Q. Can I avoid Etsy’s currency conversion fees?
A. Yes, you can avoid Etsy’s currency conversion fees by listing your products in the same currency as your payment account.
Q. What is the best way to drive traffic to my shop?
A. The best way to drive traffic to your shop is through SEO and Etsy ads. You can use keywords to optimize your product listings and make sure they appear in search results. You can also run ads on Etsy to target buyers who are already searching and shopping on Etsy. Both of these strategies will help you get more eyes on your products and drive traffic to your shop!
Selling on Etsy is a great way to start your own business, but it’s important to understand the costs involved. By knowing the fees that you’ll incur when selling on Etsy, you can plan for them and make sure your business is profitable! Do you have any questions about selling on Etsy? Let us know in the comments below!