If you're planning to sell on Etsy, it's important to understand the fees involved. There are four main fees that Etsy charges sellers: a listing fee, a transaction fee, a payment processing fee, and an offsite ads fee.
The listing fee is a small fee of $0.20 USD that you pay each time you list an item in your shop. This fee is charged even if your item doesn't sell, so make sure to factor it into your pricing strategy.
The transaction fee is a 6.5% fee that Etsy charges on the total cost of the item, including shipping and handling. This fee is taken out of the payment you receive from the buyer. For example, if you sell an item for $50 USD and charge $5 USD for shipping, your total transaction cost would be $2.87 USD ($2.50 USD for the item + $0.37 USD for the shipping), and Etsy would take a 6.5% fee of $2.87 USD, which is $0.19 USD.
Payment Processing Fees
The payment processing fee is a 3% + $0.25 USD fee that Etsy charges to process payments for your sales. This fee is also taken out of the payment you receive from the buyer. Using the same example as above, if you sell an item for $50 USD and charge $5 USD for shipping, your total payment processing fee would be $1.85 USD ($1.75 USD for the 3% fee + $0.10 USD for the $0.25 USD fee), and the final amount you would receive after fees would be $51.06 USD.
Offsite Ads Fees
The offsite ads fee is a fee that Etsy charges when a buyer clicks on an ad for your product that is displayed off of the Etsy platform. The fee is based on a percentage of the sale, which ranges from 12% to 15% depending on your sales volume. If you make a sale as a result of an offsite ad, Etsy will automatically deduct the fee from your account.
If you sell an item on Etsy for £10 and charge £2 for shipping, here's how the fees would break down:
The listing fee would be £0.20, which is charged each time you list an item in your shop.
The transaction fee would be 6.5% of the total cost of the item plus shipping, which would be £0.74 in this case (£0.65 for the item + £0.09 for the shipping).
The payment processing fee would be 3% + £0.20, which would be £0.50 in this case (£0.40 for the 3% fee + £0.10 for the £0.20 fee).
If an offsite ad results in a sale, Etsy would charge a fee ranging from 12% to 15% of the sale price, depending on your sales volume.
So, in this example, the total fees for a £10 transaction would be £1.44 (£0.20 listing fee + £0.74 transaction fee + £0.50 payment processing fee). However, if an offsite ad resulted in the sale, the fees would be higher depending on the percentage charged.
It's important to factor in these fees when setting your prices on Etsy to ensure you're making a profit. Keep in mind that fees may vary depending on the price of your item and the services you use on Etsy. It's a good idea to periodically review your fees and pricing strategy to ensure that you're maximising your profit.