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The Real Cost Of Selling On Etsy: Etsy Fees, Pricing, & Offsite Ads Explained

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Liz Hull

Liz Hull

Liz Hull is a writer for Merchant Maverick. In her three years with Merchant Maverick, she has tested and reviewed over 40 eCommerce platforms and published two ebooks on the topic of online selling. Liz has also been published in Startup Nation and Home Business Magazine Online. Liz has a BA in English and Spanish from George Fox University.

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15 Comments

Responses are not provided or commissioned by the vendor or bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the vendor or bank advertiser. It is not the vendor or bank advertiser's responsibility to ensure all posts and/or questions are answered.

    Burak Eren

    Hi!

    Is there significant difference between using Etsy Payments and PayPal? Which one is cheaper?

      This comment refers to an earlier version of this post and may be outdated.

      Jessica Dinsmore

      Hi Burak,

      There are definitely some notable differences. PayPal lets you add payments to a standalone site. Etsy is a marketplace. While there’s a HUGE amount of traffic going to Etsy’s site, you’re also directly competing against other sellers and must pay fees to Etsy for every listing and every sale, in addition to credit card processing fees. With PayPal you have to build your own site and acquire your own traffic, but your fees are less and you have a lot more control over how the site looks and other details — you don’t have to worry about Etsy’s requirements for product images, for example.

        Allison

        This was an excellent read to help me decipher all the little, sneaky fees Etsy charges and make some more conscious decisions on how to price and manage the marketing side of my tiny, but hopeful, business. Thanks for laying it all out so simply.

          This comment refers to an earlier version of this post and may be outdated.

          Judy Morgan

          Hello… As a newbie to Etsy, do we have to calculate all these percentages each time we make a sale or is there somewhere to go to find this information. Thanks so very much, Judy πŸ¦‹

            This comment refers to an earlier version of this post and may be outdated.

            Jessica Dinsmore

            Hi Judy,

            You can find instructions on how to view your fees and taxes in the Etsy Help Center

              This comment refers to an earlier version of this post and may be outdated.

              Valerie Long

              Just a note that the processing fee is charged on the FULL amount of the transaction including both shipping and taxes. This means that with the Etsy shipping calculator charging actual shipping costs to customers, Etsy then takes 8% of that (5% transaction fee and 3% processing fee) leaving sellers to cover the balance. Also now that Etsy collects sales taxes, sellers pay the 3% processing fee on those taxes which are then deducted in full from the seller account. Nickels and dimes add up quickly.

                This comment refers to an earlier version of this post and may be outdated.

                Joesan Stewart

                You also left out the taxes portion that is listed under Taxes and Fees part which i still don’t understand.

                Great information though. Thanks Much.

                  This comment refers to an earlier version of this post and may be outdated.

                  Sharon

                  Just to clarify, the new offside ad fee is 12% or 15% IN ADDITION to the regular transaction and processing fees charged, and is also charged on the shipping. It also applies to all sales made to that customer within 30 days of them clicking on the ad. So if they click on an ad for a $25 item, and end up buying $1,000 worth of stuff from you, you’re hit with the 20% to 23% total fees on $1000, PLUS on the shipping costs. And if it happens to be a regular long time customer who searches you and happens to click on an ad (or god forbid bookmarks the ad), you’re getting hit on repeat purchases forever. THIS is why sellers like myself who cannot opt out are outraged. It did prompt me to finally start my own website on Indiemade.

                    This comment refers to an earlier version of this post and may be outdated.

                    Brooke

                    “So if they click on an ad for a $25 item, and end up buying $1,000 worth of stuff from you, you’re hit with the 20% to 23% total fees on $1000, PLUS on the shipping costs.”

                    True, but you seem to be neglecting the fact that the ad caused you to make $1000 in sales, which most people would be thrilled about and which *you would not have made without the ad*. So while you might (understandably) wish you could have made that $1,000 sale with much lower fees, you can’t. That means the only alternative to making a $1,000 sale and paying 20% to 23% is making no sale at all and earning $0.

                      This comment refers to an earlier version of this post and may be outdated.

                      Mary

                      Today I sold an item for $25, but it cost me over $76 to ship the item. It cost me $5 to purchase the item that I listed for sale. So, how much did Etsy take? how much did I make? I just might be quitting Etsy.

                        This comment refers to an earlier version of this post and may be outdated.

                        amanda

                        you forgot the “shipping transaction fee”, which is a percentage based fee just on the shipping costs. Considering Etsy already gets a kickback from the USPS that they don’t pass on….

                          This comment refers to an earlier version of this post and may be outdated.

                          Liz Hull

                          Hi Amanda,
                          Thanks for your comment! In my original post, I had lumped transaction fees and shipping transaction fees together in one section. Your comment made me realize that it would be best to have two separate sections for each topic. I’ve updated the post with a new section to address just shipping transaction fees. Thanks again for your feedback!
                          Liz

                            This comment refers to an earlier version of this post and may be outdated.

                            Kim

                            Correct me if I’m wrong, but I believe you have the total fees added incorrectly. I thought the buyer pays for shipping, unless you offer free shipping. But I believe the way you wrote above is the buyer paying for shipping. Item is $10, customer pays shipping of $5.
                            Shipping fee in % is $0.25
                            Transaction fee is $0.25
                            Payment process fee $0.25 + $0.45 ($15Γ—0.03)
                            Listing fee is $0.20
                            Total of fees for a $10 item is $1.40 (not $6.65 as posted in the article) maybe wording and the math needs to be corrected above.

                            Item cost $5 to make.
                            $10- ($5+$1.40) = $3.60 profit.
                            If a seller wants to double the profit, the fees needed to be added into the cost. It is best to up the price 2.5 times rather than 2 times. $5 x 2.5 = $12.50, with a profit of $6.10, buyer pays shipping. In the end the buyer pays $17.50. Is the item worth that price now?
                            The fees are high compared to Ebay, but the only thing that is advantageous over ebay is customers get a chance leave feedbacks. Maybe handmade on amazon is the next big platform for selling handmade stuff.

                              Kim

                              Let me correct the math again since I can’t edit my post, because the shipping fee is being charged twice.
                              Process fee should be $0.30 + $0.25 = $0.55.

                              Shipping fee in % is $0.25
                              Transaction fee is $0.25
                              Payment process fee $0.25 + $0.3 ($10Γ—0.03)
                              Listing fee is $0.20
                              Total of fees for a $10 item is $1.25

                              Item cost $5 to make.
                              $10- ($5+$1.25) = $3.75 profit.

                                Jessica Dinsmore

                                Hi Kim,

                                Etsy has a really frustrating pricing structure! The shipping cost that is being charged plus what the shipping costs the seller is awash in the example. However, the seller pays a shipping transaction fee plus the payment processing fee bundles the cost of the product plus the shipping charges, because that’s what’s going on the credit card. I hope that makes sense.

                                If you are interested in alternatives, we do have a post on Etsy alternatives that can point you in other directions. Thanks for writing!

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