Etsy.com is a go-to place for those who are interested in buying unique and outstanding hand-made or artisan products. Launched in 2005 in Brooklyn, New York, it’s become one of the top e-commerce companies in the world, surpassed only by such giants as Apple, Chewy, and Amazon. According to Statista, the platform generated a marketplace revenue of 1.7 billion U.S. dollars in 2021.
With lots of people flocking to Etsy, the chances to boost your business and attract more customers than ever are quite high. Naturally, if you’re selling hand-made, vintage items and craft supplies, setting up an Etsy shop is a must. If you’re new to Etsy and don’t know where to start, you might want to consider our tips on how to create an Etsy shop. When you know what to expect and which pitfalls to avoid, making it to Etsy’s top seller list doesn’t seem far fetched.
However, you have to take your time navigating through Etsy seller fees as they can seem a bit overwhelming at first. Understanding the structure of Etsy fees is essential because there are some hidden costs involved that may really eat into your profit if you don’t know how much Etsy charges sellers.
All it takes to get started on Etsy for first-time sellers is $0.20. But there are some other Etsy seller fees you should keep in mind. Let’s break down Etsy fees – find out what fees Etsy charges its sellers and make sure that you know how much it costs to sell on Etsy in 2022.
3. Ad fees
8. Pattern fee
1. Etsy listing fees
One of the most important mandatory Etsy seller fees, the listing fee is a flat fee of $0.20 which is applied to each item you list on Etsy. Etsy charges this amount as soon as you hit the ‘publish’ button on the website, regardless of whether you actually sell this item or not.
Apart from a flat listing fee, there are some other Etsy seller fees that fall into this category that sellers should know about.
Etsy will automatically renew your listings and charge you another $0.20 if your item hasn’t sold after 4 months. While this feature does save you time, it may come as a surprise to lots of newbies as they often forget about it when they calculate Etsy fees. Unless you want your items to be relisted, opt out of this fee manually. It’s one of the fees Etsy sellers may avoid.
Multi-quantity listing fee
If your customer buys multiple units of the same product from your Etsy shop and they don’t come as a single pack, be ready to pay an additional $0.20 per item. That’s on top of the $0.20 listing fee that you’ve already paid when listing the product. Confused? Let’s say you have a loyal customer that just loves your pottery and decides to buy 6 plates in different colors. You’ll be charged an additional $1.20 in Etsy seller fees.
However, you can package multiple items and sell them as a single unit. In this case you’ll have to pay one listing fee for a pack. That is, if you sell 6 plates as a prepackaged unit, Etsy charges $0.20 only once.
Calculate Etsy fees in advance and make an informed decision that best fits your business!
Private listing fee
Etsy’s functionality allows you to list certain items for sale for a particular buyer to see. For example, if you want to sell a particular set of your pottery to specified loyal customers, be ready to pay the same amount of $0.20 for this listing. That’s a perfect feature if your Etsy shop works with custom orders, but you have to pay extra in Etsy seller fees.
2. Etsy transaction fees
According to the changes made to Etsy seller fees in April 2022, each time you sell something on Etsy, you have to pay a transaction fee of 6.5% of the total sales price. Bear in mind that Etsy transaction fee includes not only the cost of the product, but also the cost of personalization/customization, gift wrapping, and even shipping.
When you receive your Etsy bill, don’t be surprised – the transaction fee appears as two items: fees deducted from the item price and the ones deducted from shipping. Sellers from the USA and Canada should also note that the transaction fee is based on the pre-tax total amount.
NB! Etsy doesn’t charge transaction fees on sales tax to sellers from the US or Canada (on condition that the cost of sales tax isn’t included into the listing price). If you reside outside of the US and Canada, applicable taxes may be included into the transaction fees.
3. Ad fees
While Etsy.com offers multiple options for promotion and advertising the items you sell on your Etsy shop, there are two that new Etsy sellers most certainly should be familiar with: Etsy Ads and Off-site Ads. Etsy seller fees in this case differ.
Etsy Ads fee
Etsy allows its sellers to promote the items they sell within the website. The cost is determined on a ‘pay per click’ (PPC) basis, which means that you pay whenever someone clicks on your ad, even if it doesn’t result in completing the purchase. The good thing here is that you can determine the budget you’re willing to spend on this type of advertising and Etsy won’t charge you more in Etsy seller fees.
Offsite Ads fee
If you sell on Etsy, you know that they’re using social media platforms to promote the items on behalf of the sellers. All the Etsy sellers are signed up for this type of ad by default, but the fee varies depending on the volume of sales. If you’re a lower value seller and your sales don’t exceed $10,000 annually, Etsy charges a higher fee of 15%, but you can opt out of this feature altogether. However, if you sell on Etsy in high volumes and your sales exceed the annual threshold of $10,000, Etsy will charge you a lower fee of 12% of the total sales price. As you can see, the offsite ad fee is one of the mandatory Etsy seller fees you can’t avoid.
4. Etsy Payments fees
These Etsy seller fees are charged for using Etsy Payments and depend on a number of conditions: the seller’s country and the currency listed on the Etsy payment account. Let’s have a look at what Etsy charges for Etsy Payments.
Payment processing fees
If you use Etsy Payments, you also cover the costs of handling credit card or bank transactions. The conditions for eligible countries differ, but in the USA, sellers pay a flat rate of $0.25 and 3% of the final sales price in a payment processing fee for this tool. The final sales price of a product includes tax and shipping.
NB! Don’t confuse Etsy’s transaction fee with payment processing fee – these are two different payments! The transaction fee covers the cost of using the platform, while the payment processing fee is a charge for using Etsy’s payment processor – Etsy Payments.
Regulatory operating fee
Sellers from the UK, France, Italy, Spain, and Turkey have to pay an additional regulatory operating fee on each transaction they complete in their Etsy shop. Etsy charges a fixed percentage of the total sales price of the item including shipping, gift wrapping, and personalization. The amount depends on the additional costs incurred for operating in a particular country but doesn’t exceed 1.1% of a product price.
Currency conversion fee
Currency conversion fee is probably one of the most frequently neglected Etsy seller fees that might seriously eat into the revenue of Etsy’s sellers. If the currency on your listing differs from the one registered on your Etsy payment account, Etsy will charge you a 2.5% currency conversion fee on the total sales price of the item.
What’s more, all the fixed-cost fees, for example Etsy listing fee, are published in USD. Etsy will automatically convert the fees from USD to the currency listed on your payment account at the market rate once the fee is reflected in the account. When you calculate Etsy fees, keep in mind that the conversion rates may vary. This fee might be avoided if your listing currency and account currency are the same.
5. Shipping label fee
Etsy seller fees vary a lot and the shipping fee is not an exception. Etsy sellers can purchase shipping labels to fulfill their orders, as well as parcel insurance. This feature is available in certain locations and helps to track the delivery of items. There’s one condition though – you must accept either PayPal or Etsy Payments to purchase the shipping labels through Etsy.
Etsy’s shipping label fees depend on the dimensions of the package, its weight and origin, the shipping carrier, and destination – the usual things you take into consideration while ordering shipping. These types of Etsy seller fees and any adjustments to them are deducted from your current balance and can be found in your payment account under ‘shipping label fee’.
6. Subscription fee
To boost your sales, Etsy offers two types of packages – Etsy Standard and Etsy Plus, and Etsy will charge you for some extra features you choose to use. While Etsy Standard is a default plan and is actually free, Etsy Plus costs $10 a month. Etsy Plus membership gives you access to lots of benefits – discounts on domain customization, packaging and promotional materials, listing and ads credits, restock alert feature, etc. Etsy Plus may be worth the money, for example if your Etsy shop sells unique limited items that aren’t always available and you want to make sure that your customers are informed about the restock. Naturally, this feature has an extra charge in Etsy seller fees.
7. In-person selling fee
If you sell on Etsy and have a physical store, you can use Square to collect payment in person. Thanks to the Etsy-Square collaboration, you can sync your inventory with your Etsy listings and the quantity available will be automatically updated. All you need to do is to use the Square reader to process payments.
There will be an addition to your Etsy seller fees – you’ll be charged the usual listing fees plus Square’s payment processing fees for the listings that are synced with Square. However, in this case you won’t have to pay the Etsy transaction fee. Beware that Etsy will charge you for the listings that aren’t synced.
8. Pattern fee
One of the many optional Etsy selling fees, pattern fee is charged for the Pattern subscription. Pattern is a special tool that allows you to set up a separate website in addition to your Etsy shop. Acting as an additional channel for your business, the website doesn’t replace your existing Etsy shop but helps you get more exposure and reach a wider audience.
If you choose to test this feature, you start with a free 30-day trial which can later be turned into a subscription. Etsy will charge you $15.00 monthly. Your subscription is automatically renewed each subsequent month, but you can cancel at any time.
Final words on Etsy small business trends and tracking the way you pay Etsy fees
Etsy is a creative online marketplace for artists and artisans worldwide that offers incredible opportunities to level up their business. Selling on Etsy has lots of perks which outweigh the downsides connected with the fact that you have to pay Etsy fees. While Etsy seller fees aren’t low, maintaining an Etsy shop is quite cheap. Knowing what to expect in terms of fees is crucial for any business and monitoring the costs should be no less important. But with so many Etsy seller fees involved, it’s easy to get lost in your Etsy accounting.
It’s high time to find a secure and efficient accounting solution you can trust that will make selling on Etsy practical and hassle-free. Synder is an accounting software for Etsy that can simplify daily management tasks and free you of manual work. The tool boasts the largest number of features: error-free reconciliation and flawless P&L reporting, instant record of details (including splitting out selling on Etsy fees), immaculate withheld tax management and inventory tracking. And their recent addition to the reporting features – Business Insights – will elevate your performance and allow you to make better decisions!
Let Synder Accounting save your money and time so that you can spend them on growing your business and ensuring the best service! Book a demo to see how Synder can streamline managing your Etsy business. Work smarter, not harder!