The Etsy platform is popular because of its unique eCommerce approach. The numerous success stories are a testament to that, but the question remains, is it still a viable option for making an online store.
If you want to know how much it costs to sell on Etsy in 2021, you’re in the right place. We’re going to go over all the Etsy fees you might face on the platform. Since there’s a lot to cover, let’s jump to it.
What Types of Fees Does Etsy Have?
Etsy offers sellers a lot of exposure from the start. While this is a great benefit, it comes with a price. Sellers face a wide range of Etsy selling fees. They include listing, transaction, shipping, payment, in-person, Pattern, and others.
While not all of them are obligatory, we’ll cover them in detail, as you still might face them at some point. Let’s start with the listing fees.
1. Listing Fees
Listing represents the item or items you are looking to sell. For example, a single listing might include either 1, 5, or 10 handmade cups. Whichever the case, there is a fixed fee of $0.20 per listing.
Whenever you make a sale, the listing will renew. That’s when the fees repeat.
Therefore, when making a price for your product, don’t forget to include this fee as an additional expense. Furthermore, you can make a discount more easily if you place several items on sale as a single listing. That’s something your customers will notice and appreciate.
2. Transaction Fees
Etsy also has transaction fees. Keep in mind that these are different from payment processing fees. Transaction fees are 5% of the price you charge for your product. The fee also includes the cost of gift wrapping and any other product customization.
There are no fees for the sellers in Canada and the US when it comes to sales tax. On the other hand, sellers in other countries might face some fees on applicable taxes.
3. Shipping Transaction Fees
It’s also good to know about the existence of spinning transaction fees. So whatever price you’re charging for your shipping services will come with the fees of 5%.
That’s another fee to add to the total price of your product.
4. Payment Processing Fees
Once you’ve made a sale, there are two ways in which you can receive the money you have on Etsy. Those methods are Etsy Payments or PayPal. Both have different payment processing fees.
Etsy Payments is the platform’s in-house solution that’s available in 36 countries. If you are in one of them, Etsy Payments will be the method you’ll have to use. If you are going to use the Etsy Payments processor, the fees you will face are 3% + $0.25 for every transaction.
The good news is that by using Etsy Payments, you get the option to accept payments in the form of Etsy Gift Card, Etsy Credit, PayPal, bank transfer, credit card, debit card, Google Pay, and Apple pay.
That’s perfect because your customers can opt for a payment method that suits them best.
In case you are selling from one of the unsupported countries, you can use PayPal as a payment method. It comes with fees of 2.9% + $0.30 per transaction.
5. In-Person Selling Fees
Another useful feature you’ll find available with Etsy is In-Person selling. It’s possible to sync your listings with Square. With the use of Square reader, you can make in-person sales. That’s a very convenient way to charge your customers if you have a physical store location.
Once you make a sale on Etsy, you’ll automatically pay the listing fees’ cost. On the other hand, Square will require you to pay for the platform’s processing fees of 2.6% + $0.10 per transaction.
It’s important to stress that selling this way does not incur the 5% Etsy transaction fee.
6. Pattern Fees
Making a unique website is the correct way to present your products authentically. That’s where Pattern, a platform available with Etsy, comes in. With it, making an online store is a simple experience.
On top of that, all of the listed items are in sync with your Etsy seller account. Therefore, while being independent, you get all the benefits of working with Etsy.
Using Pattern is going to cost you $15 per month. One of the useful features you get is expiration-free listings, unlike on Etsy, where they expire every four months.
7. Currency Conversion Fees
Even though this fee is easy to avoid, it’s best to mention it anyhow. Etsy recommends that the currency you use matches your payment account’s currency when you’re listing your items.
Taking this step makes no impact on who can see your listing. No matter which preferred currency the visitors pick, they will still be able to see your listing. Etsy takes care of converting your listing prices and displays them to the visitor. On top of that, the exchange rate fees are on the buyer’s side in that case.
However, if you, for any reason, have a different payment account and listing currencies, you will have to pay a 2.5% currency conversion fee.
8. Ad Fees
Etsy took a creative approach to stay competitive in the market. It came up with two ways in which sellers can advertise on the site and offsite.
Etsy ads are for advertising on the platform. A pay-per-click model ensures that you have all the details of how effective your Etsy marketing campaign is. Additionally, you can always set budget limits, allowing you to control your marketing efforts better.
More importantly, offsite advertisement is optional for some sellers, while others have to participate in the program. Etsy runs these ads on big platforms such as Google, Facebook, and many others.
Offsite Ads Program fees range from 12% to 15%. The rules of the program are as follows:
All sellers who make less than $10,000 annually can either opt-in or opt-out of the Offsite Ads program. If they choose to opt-in, their promoted listing fees will be 15% per sale made through the program.
Those who have more than $10,000 in annual sales are automatically part of the program, without the possibility of opting out. Their fees are 12% per sale made through the ads.
9. Plus Plan
Finally, you can also sign up for the Plus Plan, which will set you back $10 per month. You can take a look at plan details on Etsy’s site. The main advantages include:
- $5 in Etsy Ads
- 15 listing credits
- Numerous discounts and other perks
That might be an appealing option for sellers looking for more customization on the platform. You will more easily decide whether this plan brings more pros than cons for your store.
Is it Worth it to Sell on Etsy?
Selling on Etsy is still a viable option. All you have to do is get your math right. There are plenty of benefits that make it worth it to sell on Etsy. Some of them are:
- Quick and easy shop setup
- Great exposure right from the start
- Cheap advertising
- Cost-effective
However, not everything’s perfect. There are some cons to using Etsy.
- High competition
- Copycats
- Limited branding options
But, overall, it all comes down to whether you can make a profit. If you get that step right, everything else is less important.
What Percentage Does Etsy Take?
Here’s an Etsy fees example that will help you better understand how to calculate them. The example below is of an item listed for $10 and costs you $5 to make or get.
Revenue: $10
Cost: $5
Listing fee: $0.20
Transaction fee: $0.50
Processing fee:$0.55
Total cost:$6.25
Profit: $3.75
If you are more curious about your listings, you can try out the Alura Etsy Fee Calculator. It’ll tell you exactly what your profits per listing are:
Is it Cheaper to Sell on Etsy Than Other Marketplaces?
Etsy is aggressive in its fees and pricing, as there are many competitors out there. Some of the most popular include:
- Shopify - starts at $29 per month + payment fees.
- Big Cartel - free plan and $29.99 plan + payment fees.
- IndieMade - starts at $4.95 + payment fees.
- Squarespace - starts at $18 per month + payment fees.
- Wix - starts at $23 per month + payment fees.
- ArtFire - starts at $4.95 + payment fees.
- Amazon Handmade - Free plan with $1 charge per sale + a wide range of referral fees
As you can tell, all platforms are competitively priced. It all depends on your needs and whether pricing works for you.
Given how much Etsy provides from the start, it is fair to say that its pricing is on point. It’s one of the cheapest options available, as you can start your store without any expenses, besides the fees.
How Can You Avoid Fees on Etsy?
Avoiding fees on Etsy is not allowed by the platform. Therefore, to prevent a suspension or a ban, it is best to pay all fees and follow the platform’s terms of use. However, businesswise, there are several steps you can take to offset Etsy fees.
- Optimize costs - if you can cut costs from the start, you can increase your profit margin.
- Consider using fewer ads - check how effective offsite ads for your store are.
- Stop listing things that don’t sell - remember, listings renew every 4 months.
- Drive prices up - this one’s straightforward, but always keep in mind that you can up your prices from time to time. It is an immediate fix for your profit margins.
Do You Pay Taxes on Etsy Sales?
US residents will receive a Form 1099-K from Etsy, so will the IRS. Therefore, when filing your taxes, you should also account for the income mentioned on that form.
Sellers outside the US are also subject to VAT. Etsy will automatically charge on every sale, depending on the seller’s country of residence. You can learn more about it on Etsy’s fees page.
