If you are starting your own small business, that is related to making and selling something handmade or unique then Etsy is the right place to start! However, you will not be the first one, because there are more than 1,6 million active sellers on Etsy. And there are really awesome success stories that started on Etsy. But, to be really successful on Etsy you have to know your way around their rules and fees. So let’s figure out how much does it cost to sell on Etsy and how to save money selling on Etsy.
How much does it cost to sell on Etsy? Etsy fees
First of all, let’s establish what types of fees is out there:
- Listing fees
- Transactions fees
- Payment processing fees
- Advertising fees
- Shipping fees
- Wholesale fees
- Currency conversion
Quite a lot isn’t it? Well, don’t feel frustrated we will explain them to you one by one, without any unfamiliar terminology in order to present them as easy as possible. But first here’s a brief example, just for roughly establishing how much does it cost to sell on Etsy, using the example of two different stores:
|Number of products||30||125|
|Sales per month||10||40|
|Payment processing fee||$12.73||$79.40|
So, let’s begin to figure out how much does it cost to sell on Etsy.
The listing fee is one of the main parts of the whole sum that answers a question, how much does it cost to sell on Etsy. Basically, it is a commission for every item you are trying to sell. In other words, Etsy charges you $0,20 USD for every item that you put out on their site.
You have 4 months to sell your product, if you no one buys it, you will have to pay $0,20 USD again.
The easier to way to calculate this fee is to consider it as a $0.05 per month.
Please note, that there are no fees for editing the information about your product that is already presented in your Etsy store. Another important detail is that if you sell multiple quantities of the same item you will have to pay $0,20 USD for each one, yes just these two coins:
So, to sum up, you will have to pay a fee regardless if you sell an item or not. We think that this is quite unfair. To bypass this, you can create a private listing, this way you will only pay for the items you actually sold.
This is one of the easiest fees to understand. Etsy will take a 3.5% of every item you sell. For example, you sell a product for $100, so you pay a $3.5 as a transaction fee. However, there are some small details. If you are selling from US or Canada this fee will not apply to the Goods and Services tax, sales tax, or Harmonizes Sales Tax. But if you sell from any other country, all taxes that are included in the price will also include into the calculation of this fee.
Payment Processing Fees
Etsy payments system is a convenient solution, it allows buyers to purchase using Etsy gift cards and following payment systems:
- American Express
- Apple Pay
- Android Pay
If you have connected Etsy payments system to your store then you will have to pay an additional fee. The amount is different for each country, it depends on the location of sellers bank account, for example, if your account is registered in the USA you will have to pay 3% of the item price plus 0.25 USD per product sold. Usually, if you are not from USA or Canada, it will be harder to calculate how much does it cost to sell on Etsy.
Owners of Etsy store currently can purchase two types of paid advertising through Etsy’s Advertising Dashboard: Promoted Listings and Google Shopping ads. The pricing policy between those two services is really complicated. We don’t want to bore you with a huge amount of numbers. But the mechanics of this fee is a little bit different.
Etsy advertising fee depends on a number of clicks on your advertisement, not on a number of products sold.
Etsy allows you set a limit of money to spend on advertising per day. For more details check out their advertisement policy.
There is a possibility to purchase Etsy labels for sellers from the Unites States or Canada. It is not mandatory, but it can be very convenient for some merchants. The cost of the shipping label varies depending on the parameters of the package and a service you have chosen. Keep in mind, that you have to accept Etsy Payments or PayPal as a payment method to use Etsy shipping labels. We do not recommend trying to anticipate this fee when calculating how much does it cost to sell on Etsy.
This fee has a similar structure with a transaction fee. But this one only applies if you are using Etsy Wholesale, if you are puzzled, find out what is Etsy Wholesale.
Long story short, you will have to pay a standard transaction fee of 3,5% of the wholesale price, without the taxes and shipping cost.
The detailed story is that you pay one-time $100 joining fee and 10% transaction fee if dealing with larger retail partners off Etsy such as Macy’s, Whole Foods, etc.
Etsy uses US Dollars as the main currency. But they provide a possibility to list your items in any currency. There is one interesting detail. If your main bank account is not a US Dollar account, then you can list your products in the currency of your main account for free. However, if you decide to present your items in any other currency be ready to pay 2,5% over the current market rate from any funds that buyers pay you.
Don’t forget the sales tax
We cannot address this tax as an Etsy fee. Yes, it is deducted from some of a number of money buyers pays you. However, you are playing a role of a middleman here, simply passing through the cash. So this takes no part in figuring out how much does it cost to sell on Etsy. Let us explain. According to the law of the curtain countries, Etsy is required to collect a value-added tax. We will not bore you down by mentioning all of the countries this rule applies to. So, if the tax is necessary, Etsy system will automatically add the correct amount to the price. If the payment was done using the Etsy Payments system, then you don’t need to do a thing, if not, you will need to pay that amount to Etsy. Don’t worry, you don’t have to calculate this stuff manually. The amount of cash will be calculated automatically and displayed in your Etsy Bill.
All you have to do is recognize what it is, and leave a necessary amount on your banking account. Pattern Fees
Etsy Pattern, does it worth it?
Not so long ago, Etsy has launched a new service called Etsy Pattern. In short, this service allows you to create your own website, that will host a store with the same items that are currently on your Etsy store. The main selling point of this service is that you are managing only one store while getting profit and all kind of benefits from two at the same time.
Etsy crew really did a good job, got to give them a credit. They have figured out that more than 1.5 million of their active sellers had an idea of creating their own website. But the process was too complicated for them, so they have dropped the idea.
So, let’s get down to business. How much does Etsy Pattern cost? What benefits and features does it bring?
How much does Etsy Pattern cost?
The price for your own website with Etsy store in it is 15$ per month. This might be quite steep for the smaller stores on the Etsy market. But, for some of them, this might be the one thing that is in a way of their own success story. So, what are the feature and benefits of Etsy Pattern:
- Unique design – Etsy offers you a set of powerful tools to customize your own website in a way that you want
- Two shops in one – very nice timesaver. You can manage both, your Etsy store and a pattern store from one control panel
- Custom domain – create a unique website address for your one of a kind Etsy store, so your customers will remember the name of your shop. So when they brag about their new item they would tell the name of your shop and not “I got it on Etsy”
- Powerful data center – review and compare the statistic data from your Etsy store and Pattern Shop
Is it worth to add Etsy Pattern to your store? Should you add this expense when calculating how much does it cost to sell on Etsy? We cannot answer these questions for you. Try to consider everything above, and decide for yourself. Actually, you can try it out for free for one month.
How to reduce the cost of your store
We have established how much will it cost to sell on Etsy. However, any self-respective entrepreneur will research any possible way to pay less, or in other words how to squeeze his budget. We did the heavy lifting for you. In this chapter, we will discover ways to pay less to Etsy.
As we have established before, Etsy allows two ways how you, as a merchant, can accept payments from customers. These are Direct Checkout and PayPal. Let’s compare their tariffs:
- Etsy Direct Checkout – 3% of the sale price and $0.25 per transaction
- PayPal (Business Account) – 2.9% of the sale price and $0.30 per transaction
Not a huge difference, we agree. But the devil is in the detail. With a little bit of math applied you can calculate that if your average total sale price is above $50 you will save money by using PayPal. On the other hand, if your average checkout is less than $50 then Etsy Direct Checkout is your choice.
If your average total sale price is above $50 choose PayPal, if it is less than $50 select Etsy Direct Checkout.
Another possible way how you can save money selling on Etsy is to use variants. Let’s break down two examples.
- 1. You list on your Etsy store 10 different products with one item available for each, that will cost you $0.20 x 10 = $2.00 for 4 month
- 2. You list on your Etsy store 1 product with 10 variations with one item for each, that will cost $0.20 x 1 = $0.2 for 4 month
You already figured it out, didn’t you? But, be careful. Don’t overuse this trick. Use it only when it makes sense. When you have several different products that are very similar but vary by one particular feature.
How to reduce advertising cost on Etsy?
One of the most expensive cost items in any kind of business is the advertisement. Etsy store is no exception. Advertising fees can chop away a significant part of your budget. There are no exact and usable for anyone way to cut this expenses. All, we can advise here is to optimize SEO performance of your store before spending even a cent for advertisement.
Last but not least, the way to reduce shipping fees of Etsy store. Unfortunately, it is fair only for a business that is based in US or Canada. Purchase USPS shipping labels from Etsy, this feature has no additional cost. Or, you can use Etsy shipping that will grant you an additional 5% discount if you use Etsy shipping labels.
Etsy is really a great marketplace to sell unique and handmade products online. No wonder that this is the most popular resource for this kind of purpose, and that’s why it was a starting point for so many success stories. And now you know all about how much does it cost to sell on Etsy. If you are not satisfied with Etsy services check out other sites like Etsy.In addition, you know some of the ways around their rules, that will save your money. If you find some more way to save cash selling on Etsy feel free to share them in the comments.
In addition, you know some of the ways around their rules, that will save your money. If you find some more way to save cash selling on Etsy feel free to share them in the comment section below.