As an Etsy seller, you must know that your shop currency is a universal setting for all items listed in your shop. Understanding how to set your preferred currency and knowing its effects on transaction fees can make a significant difference in your selling experience. In this guide, we’ll walk you through the steps of setting up your preferred currency and discuss some key points related to it.

Understanding Supported Currencies for Etsy Payments

Etsy Payments currently supports a wide range of currencies, providing flexibility for both buyers and sellers. Here are the supported currencies:

• United States dollar (USD)
• Australian dollar (AUD)
• British Pound (GBP)
• Canadian dollar (CAD)
• Danish Krone (DKK)
• Euro (EUR)
• Hong Kong dollar (HKD)
• Indonesian Rupiah (IDR)
• Israeli Shekel (ILS)
• Malaysian Ringgit (MYR)
• Mexican Peso (MXN)
• Moroccan Dirham (MAD)
• New Zealand dollar (NZD)
• Norwegian Krone (NOK)
• Philippines Peso(PHP)
• Singapore dollar (SGD)
• South African Rand (ZAR)
• Swedish Krona (SEK)
• Swiss Franc (CHF)
• Turkish Lira (TRY)
• Vietnamese Dong (VND)

For sellers, please note that your Etsy Payment funds will be deposited in the same currency as your bank account’s country of origin.

Take Note: If you are located in Bulgaria, Croatia, Czech Republic, Hungary, Poland and Romania - your funds will be sent in Euros to your bank account. Be aware that your bank may charge foreign exchange fees to deposit these funds into your account.

How to Set Up Your Preferred Shop Currency

Follow these simple steps to set the currency for your shop:

1. Log in at Etsy.com.
2. Navigate to Shop Manager.
3. Under the Shop Manager, click on Finances.
4. Proceed by clicking on Payment Settings.
5. Choose Currency from the options available.
6. Select your desired currency from the drop-down menu.
7. Decide if you’d like prices of existing listings converted and rounded up to their nearest whole number in your new currency.
8. Confirm changes by clicking on Change Shop Currency.

Please note: If you have numerous items listed already, converting them into a different currency may take up to an hour. After setting a preferred shop currency, all future listings will automatically be priced in this selected currency.

The Impact of Your Chosen Currency on Etsy Fees

The universal transaction fee charged by Etsy – which is 5% – will apply to your listing price, shipping cost, and any gift wrap charges in your chosen shop currency. All fees imposed by Etsy are calculated and then converted into your Payment account’s default currency.

Understanding Currency Conversion Fees

Etsy allows its shoppers to view prices in any supported browsing currencies. When your shop’s listing currency differs from your Payment account’s currency, you’ll need to be aware of additional currency conversion fees. Etsy will convert the sales amounts from your shop currency into your Payment account’s currency, applying a 2.5% conversion fee on the sale amount. This fee is subtracted from the sales amount before it is reflected in your Payment Account. To understand and view the applied market rates for these conversions, sellers can download their Etsy Payments Sales CSV file.

If you choose to accept PayPal payments directly instead of through Etsy Payments, funds will correspond with your PayPal account’s currency. For other international payment methods such as money orders or personal checks, ensure that you discuss the currency with your buyer before they submit their payment.

In cases where no specific shop currency is selected, Etsy defaults to US dollars (USD). Unfortunately, it isn’t possible to time conversions based on fluctuating rates throughout the day.

Seller’s Perspective

Currency conversion fees apply when the currency of your payment account differs from that of your listings. These are distinct settings - if they don’t match, Etsy will carry out a currency conversion when paying you as the seller. This doesn’t affect how pricing displays for customers but it does impact the fees you pay to Etsy.

The currency conversion fee is solely tied to your payment account settings and not influenced by any configurations set by the buyer. Even if a receipt prints in a different currency, this doesn’t necessarily mean that you’ll be charged a conversion fee.

Some sellers choose to list their items in specific currencies for aesthetic purposes – they want prices displayed consistently for buyers from certain countries, avoiding odd figures due to conversions.

For instance:

Let’s say you’re located in Canada and have set your prices in Canadian dollars. If a buyer whose account is set up in US dollars visits your shop, Etsy will display prices converted into US Dollars.

In such scenarios, there won’t be an additional currency conversion fee since both your listed price and bank account are denominated in Canadian dollars. However, if listings were displayed in US dollars while your bank account was still Canadian-based, each transaction would incur an extra 2.5% currency conversion fee atop regular Etsy charges.

Different Currencies on Receipts as a Seller

If you’re seeing receipts printing out with different currencies or languages as a seller - don’t fret! This is based on settings on the buyer’s end, not yours. You’ll still be paid in the currency your payment account is set up in.

If a customer queries about their receipt displaying differently, guide them to check their currency and language settings under the Preferences tab in their account settings.

This detailed understanding of Etsy’s currency conversion process should help you make smarter decisions regarding listing currencies and managing associated fees. Keep these points in mind for a smoother selling experience!

Switching Back To Your Original Shop Currency

Etsy allows sellers who have changed their shop currency to switch back within 14 days without affecting original pricing. However, reverting after this period may result in item prices deviating from initial amounts due to factors like optional rounding and varying exchange rates over time.

Pros and Cons of Setting Etsy Listings in US Dollars

Here are key points to consider when you’re deciding whether to set your Etsy listings to display in US dollars:

Pros of Using USD for Listings:

Stability for Majority US Customers: If the bulk of your customers are US-based, using USD for listing prices ensures stability in how prices appear. Currency fluctuations can cause prices to appear as irregular numbers instead of whole figures.

Perception and Industry Norms: Some sellers believe that prices ending with .00 convey a sense of higher quality. Conversely, if .99 endings are standard within your industry, this could be another reason to opt for USD.

Customer Currency Settings: By setting USD as your shop currency, all your listed prices will display in USD unless a customer has configured a different currency on their end.

Cons of Using USD for Listings:

Currency Conversion Fees: The main drawback for non-US sellers using USD is the associated currency conversion fee when transferring money from Etsy into your bank account. An additional 2.5% fee applies any time there’s a mismatch between your shop’s currency and the one linked with your bank account, eating into profits from each sale.

Inconsistent Pricing Display: While pricing remains consistent for American buyers when you use USD, they may look unusual due to fluctuating exchange rates for shoppers based elsewhere.

Why You Might Prefer Listing In Your Country’s Currency

There are also compelling reasons why you might want to list items in the same currency where you have set up banking:

Pros of Using Local Currency for Listings:

Control Over Pricing Appearance: By setting local currency, you maintain control over how prices appear within that country.

Cons of Using Local Currency for Listings:

Exchange Rates Impact: Regardless of setup, varying exchange rates will inevitably influence how price displays differ across countries other than where you’ve set up banking.

In business, every added overhead chips away at your profit margins. Therefore, it’s important to consider the bottom line and fees you’re paying when deciding on your shop currency. Although a 2.5% fee might seem insignificant initially, it can accumulate over time and potentially make a significant difference to your overall profits.

Best Currency Choice for Your Etsy Shop

Deciding on the most suitable currency for your Etsy shop is an important step that requires careful thought and consideration. Here are five key factors to consider:

1. Understand Your Customer Base

Knowing who your customers are and where they come from can guide you toward the best currency choice for your listings. If a significant majority of your customers are from a particular country, it could be beneficial to set prices in that country’s currency. This can make shopping more straightforward for customers, as they wouldn’t have to convert prices into their local currency.

2. Consider Your Profit Margins

Each transaction on Etsy comes with its unique costs, including fees and potential conversion charges if the listed price’s currency differs from your bank account’s designated one. If you find that paying an additional 2.5% conversion fee significantly eats into your profit margins, it might be wise to align your listing prices with the same currency as in your payment account.

3. Analyze Your Sales Data

Sales data is a goldmine of information that can help shape various aspects of your business strategy—including deciding on listing currency. Look at where most of your sales are coming from geographically; if there’s a strong trend towards one specific region or country, setting up shop in that area’s primary currency could be advantageous.

4. Experiment with Pricing Strategy

The world of e-commerce allows room for testing and learning—use this to your advantage! Try out different pricing displays by altering currencies or even adjusting price endings (.99 vs .00) and monitor any changes in sales over time.

Conclusion:

In conclusion, managing your shop’s currency settings on Etsy is a critical aspect of running a successful online business. It intertwines with various factors - from pricing strategy to buyer experience and impacts transaction fees as well as profit margins. Whether you choose to list prices in USD, your local currency or any other accepted currencies on Etsy, the decision should be rooted in understanding your customer base, considering the potential costs involved and ensuring profitability.

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