A breakdown of Etsy fees: how much of a cut does Etsy take?

With more than 90 million buyers flocking to its online marketplace, Etsy offers the potential of new revenue and new audiences. Heck, Etsy’s sales have more than doubled from 2020 to 2021.

But you’re likely left with one question: is it worth it?

While there are plenty of things to take into consideration, one of the most commonly asked questions regards the true cost of selling on the channel. In this blog, we’ll dig through the various fees involved in selling on Etsy, and tips for adding Etsy to your multichannel selling strategy.

Mandatory Etsy fees for 2022

You may have seen Etsy chant the refrain “all it takes is 20 cents to get started.” While that’s not totally off, there are several other required fees to take into account.

Listing fees: $0.20 per item

This is where the “20 cents” comes from. For every item you publish on Etsy.com, you must pay a flat fee of $0.20 (USD). You’ll be charged this fee whether or not your product actually sells, and your account will be charged as soon as you hit “publish” on a listing.

Keep in mind that there are other quirks regarding Etsy listing fees:

• Auto-renewal – If your item hasn’t sold after four months, Etsy will automatically renew your listing (read: charge you another 20 cents). You can opt out of auto-renewal from your account, which means you’ll have to manually repost a listing once it has expired.

• Multi-quantity listings – If a listing includes multiple variations, and a customer purchases more than one variation, you’ll be charged for each variation that’s purchased. Or, if a customer buys multiple units of the same product, then you’ll be charged 20 cents per unit (unless your units are sold as a single pack). For instance, say that you list a t-shirt for sale and a customer decides to buy 10 of them. You will be charged a grand total of $2 in listing fees, or 20 cents per additional unit after the first t-shirt sold, which you already paid a listing fee for.

• Multipacks and pre-bundled items – When multiple products are prepackaged together and sold as a single product, you will only be charged one listing fee per pack.

• Private listing – On Etsy, you have the option to list certain items for sale just for a particular buyer to see. These types of listings will be subject to the same 20-cent listing fee.

Transaction fee: 6.5%

A transaction fee is what you pay whenever you make a sale on Etsy. It’s currently 6.5% of the total sales price—a jump from 5%, as of April 2022—and includes the cost of shipping, gift wrapping, and product personalization. (However, on your Etsy bill, your transaction fee will appear as two different line items: transaction fees deducted from your product price and transaction fees deducted from your shipping cost.)

For sellers in the U.S. and Canada, this fee is based on the pre-tax total.

Payment processing fee: 3% + $0.25 per transaction

The processing fee covers the costs of handling credit card or bank transactions when using Etsy Payments. Sellers in 36 eligible countries (including the U.S. and Canada) have access to this tool, which accepts PayPal, Google Pay, Apple Pay, credit card, and debit card.

Etsy Payments charges a flat rate ($0.25 USD) and percentage of the final sales price (3%), including tax and shipping, for sellers in the U.S. Outside of the U.S., processing fees vary by country.

Offsite Ads (for high-volume sellers): 12%

Offsite Ads are ads that Etsy places on behalf of its merchants to drive more business to its marketplace. Offsite Ads appear on search and social media destinations, as well as other select media sites.

All sellers are automatically enrolled in Offsite Ads—and if your Etsy shop has earned more than $10,000 in the last 365 days (as calculated on the first day of the month), you are required to stay enrolled. You will be charged 12% of the total sales price whenever someone actually purchases your product from an Offsite Ad. This advertising fee will never exceed $100 USD. You will also remain enrolled for the lifetime of your shop, even if you fall below the $10,000 threshold on a later date.

The fine print: If a customer clicks on an Offsite Ad that features one of your listings, then buys something from your shop within 30 days of that click, this will be attributed to an Offside Ad. For example, say that an Offsite Ad features a $25 lamp you sell. If someone clicks on the ad and decides to buy a $500 table you offer, you’ll be charged the 12% fee even though the ad was for your lamp. Now, let’s say that within that same 30-day period, the customer purchases your $25 lamp—that too will incur the 12% fee. In addition to this, you will still be responsible for paying shipping transaction fees or other applicable fees.

Currency conversion fee: 2.5%

If your company attracts international business and uses Etsy Payments, you will be charged a 2.5% currency conversion fee on your total sales price (including the cost of shipping, gift wrapping, and personalization). Put another way, this fee will be applied whenever the currency on your shop’s listing is different from the currency of your Payment account.

Regulatory operating fees: cost varies

Merchants located in select countries outside the U.S. are subject to regulatory operating fees in addition to the standard Etsy fees. The regulatory operating fee is a fixed percentage of your total sales price (including the cost of shipping, gift wrapping, and personalization). This fee ranges from 0.25% to 1.1%.

Optional Etsy fees for 2022

On top of these base costs, Etsy offers optional services that carry their own costs.

Etsy Ads: cost varies

Etsy offers onsite ads for boosting the visibility of your items. Fees for these ads are “pay per click” (PPC), meaning that you incur charges any time a person clicks on your Etsy Ad, whether or not they proceed to buy your product.

The cost per click is determined based on an auction system. You can set a daily budget, which essentially tells Etsy how much you’re willing to pay for a single click on your ad. When you’re first starting out, you’ll be allowed a maximum daily budget of $25. Etsy will recalculate this limit on a weekly basis for Etsy Payments users, and on a monthly basis for users who aren’t enrolled in Etsy Payments.

Offsite Ads (for lower volume sellers): 15%

If your Etsy shop has generated less than $10,000 in sales over the last 365 days (as calculated on the first day of the month), you can opt out of the Offsite Ads program. Sellers below this threshold are charged a higher fee (15%) for Offsite Ads than those who exceed the threshold (12%).

Shipping labels: cost varies

If you choose to leverage Etsy Shipping, you can save up to 30% on shipping costs from USPS, FedEx, and Canada post. You can also print labels directly from your Etsy account. Doing so automatically marks items as shipped and adds a tracking number to the order—both of which can help you to boost your seller ranking and earn Etsy’s Star Seller badge.

In-person selling fee: $0.20

If you have a physical store and use Square as your POS system, you can sync your Etsy listings with your store inventory. The benefit of this is that if someone purchases your product in stores, your listed quantity on your Etsy page will be updated automatically.

There’s no extra charge beyond the usual listing fees when your Etsy listings are synced with Square. However, if you sell an item via Square that’s not synced with your Etsy listings, you’ll be charged a separate $0.20 fee that shows up as a “Square manual” fee on your Etsy bill.

Square charges additional processing fees for each transaction, which varies by the type of sale.

Etsy Plus: $10 per month

Etsy Plus is an optional subscription service that offer perks, such as:

• 15 listing credits each subscription cycle

• $5 in Etsy Ad credits each subscription cycle

• Etsy Shop customization

• Ability to accept restock requests from your shop

• Discounts on web domain, custom shipping boxes, business cards, and more

An example of an Etsy bill

To put all this into perspective, let’s pretend you sell snazzy dog collars. They cost you $10 to make and you sell them on Etsy for $20. Your customer pays $5 in shipping and $1 in tax, bringing his/her total price to $26.

You have sold less than $10,000 in the last 365 days, but you choose to pay for Offsite Ads for extra exposure.

Here’s what your bill shakes out to be at the end of the transaction.

Etsy takes a total of $6.61 from your sale, or 25% of the total amount that your customer paid at checkout.

Etsy can be costly

Etsy, no doubt, has its perks and can bring lots of business your way. But there’s also no denying that selling on Etsy comes with a cost (albeit, so does selling on Amazon, eBay, or any other marketplace)

These costs present its own challenges:

• Smaller margins – As the hypothetical example above shows, the costs can add up quickly, which means you may not be able to price your items competitively if you want to maintain a decent margin.

• Rising fees – As on any marketplace, policies and fees can change at any time. Etsy has increased its transaction fees twice in the last four years–most recently in April of 2022, prompting a temporary strike among sellers.

• Your brand is secondary – Customers come to Etsy for Etsy. Read: they trust Etsy, which is why Etsy is a great destination for both buyers and sellers. On the flip side, customers may not pay as much attention to the individual shop that they’re purchasing from, making it harder for you to establish brand stickiness and earn repeat business.

• Popularity means more competition – Etsy’s rapid growth has attracted more sellers than ever, which means your products may not stand out unless you invest in paid placements.

All in all, Etsy’s unique and enthusiastic audience could be a great fit for your brand. But it goes without saying that you’ll want to monitor your costs closely and have a plan for building up your brand both on and off Etsy.