Etsy 103 - Etsy Fees: Understanding Etsy Fees and How to Reduce Them

Etsy has rolled out multiple changes to its fee structure over the last few years and it can be difficult for sellers to understand exactly how much it costs to sell on Etsy. This articles reviews the most current fee structure (as of July 2015) and provides tips on how you can reduce your Etsy selling fees to maximize your profit.

Etsy Fee Components

There are three main fees that you will incur as an Etsy seller - listing fee, sales fee, and payment processing fee. There are also secondary fees that you may occur if you participate in additional Etsy programs - advertising, shipping labels, and wholesale. We'll first talk about the primary fees and how you can reduce them, then mention the secondary ones. Please note that all references to fees are in US dollars.

Etsy Listing Fee

Etsy charges you $0.20 for each item you list and that item is active for 4 months, so think of it as $.05 per month. Each time you renew a listing for 4 months, you are charged another $0.20 and you can renew a listing at any point (no matter how many have sold or if it had expired).

Examples of How Listing Fees Work

Example 1: You list 10 different products with one available unit for each of them. Upon listing them, your fee is $0.20 x 10 = $2.00.

Example 2: You list 10 different products with 3 available units for each of them. Upon listing them, you fee is $0.20 x 10 = $2.00. For each unit that sells past the first one within 4 months, you are charged an extra $0.20.
--2(a). One of your 10 products doesn't sell any units within 4 months. You pay no additional fee for this one.
--2(b). One of your 10 products sells 1 unit within 4 months. You pay no additional fee for this one.
--2(c). One of your 10 products sells all 3 units within 4 months. You already paid the listing fee for the first sale, so you're charged an additional $0.20 x 2 = $0.40.

Example 3: You list 1 product with 10 different variations under it. Upon listing, your fee is $0.20 x 1 = $0.20

eSale Expert Tip: You can reduce your Etsy listing fees by listing your variations under the same item, not as separate listings!

Example 4: Four months ago you listed 10 products with various available quantities and paid $0.20 x 10 = $2.00. None of them sold a single unit and all expired. You list 1 product with 10 different variations under it. You renew all 10 products for another 4 months and are charged $0.20 x 10 = $2.00.

Etsy Sales Fee

Etsy charges a 3.5% commission on each sale based on the item price. They do not charge the 3.5% on any shipping or tax charges - just strictly on the item price. Your location and buyer location do not matter either.

Examples of How Sales Fees Work

Example 1: You sell an item to someone in the USA for $100 plus $9 shipping and $0 sales tax. Etsy charges you 3.5% x $100 = $3.50.

Example 2: You sell an item to someone in another country for $100 plus $20 shipping and $10 sales tax. Etsy charges you 3.5% x $100 = $3.50.

Example 3: You sell two items to someone in the USA country for $100 each and don't charge them for shipping or sales tax. Etsy charges you 3.5% x $100 x 2 = $7.00.

Etsy Payment Processing Fee

When you accept a payment online from an Etsy customer, whichever payment processor you choose will charge you a fee. Etsy allows for accepting payments either through their Direct Checkout payment platform or through PayPal.

Etsy Direct Checkout PayPal (Business Account)
Payment Methods Accepted Credit Cards
Debit Cards
Etsy Gift Cards
Google Wallet
Apple Pay
Bank Transfer (in some countries)
Credit Cards
Debit Cards
PayPal Payments
Fee 3% of total sale price (incl. shipping and tax)
-PLUS-
$0.25 per transaction

Note: Countries other than the USA have a different fee structure which can be found here
2.9% of total sale price (incl. shipping and tax)
-PLUS-
$0.30 per transaction

eSale Expert Tip: You can reduce your Etsy payment processing fees by using Direct Checkout if your average total sale price is less than $50 and by using PayPal if your average total sale price is more than $50!

Etsy Advertising Fee

Etsy offers additional advertising opportunities to drive traffic to your Etsy listings by way of Promoted Listings (advertising products within Etsy) and Shopping Engine Ads (advertising products outside of Etsy).

Promoted Listings: You set a budget and bid against other sellers for promoting your listings across Etsy pages.
Shopping Engine Ads: Currently a free service, Etsy can push your listings out to various shopping engines such as Google Shopping.

eSale Expert Tip: You can reduce your Etsy advertising fees by optimizing your Etsy SEO before signing up for Promoted Listings - see this article for tips!

Etsy Shipping Fee

Etsy sellers who are in the US or Canada can purchase USPS shipping labels directly from Etsy. There is no additional cost to use this service.

eSale Expert Tip: You can reduce your Etsy shipping fees by looking at all of your shipping options before signing up to print USPS labels directly!

Etsy Wholesale Fee

Etsy Wholesale is a separate platform that requires an application for both buyers and sellers. In addition to the sales fees, seller membership requires a one-time $100 join fee.

Final Thoughts

Etsy is one of the cheapest options out there when it comes to fees for sellers, but there are still ways that you can reduce your fees:
1. List variations of products under one item instead of each one separately.
2. Use Direct Checkout for total sale prices (item price + shipping + tax) of less than $50/order, and PayPal for total sale prices of more than $50.
3. Optimize your Etsy SEO before trying Promoted Listings. Learn more here.
4. Look at all of your shipping options before printing USPS lables from Etsy.

Looking for a step-by-step guide for how to create a seller account on Etsy?
Sign up for a free 30-day trial of eSale to download it!

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