- If you have just started an Etsy shop,
or if you are thinking about starting an Etsy shop
and learning more about it all,
it can be quite confusing to understand all the fees
that you are charged on your Etsy invoices.
At this point you probably have already taken a look
at the fee descriptions in the Etsy help pages,
but you might still find it hard
to wrap your brain around what is what.
and you're left wondering which fees you need to pay
and which ones you don't.
Some sound like they're the same,
but apparently they're not,
and your brain starts to feel like it might just explode.
So my goal with this video is to make the Etsy fees clear
and easy to understand once and for all.
To do that I've made a super helpful free worksheet
that you will be able to fill out
as we work through each fee in this video.
You can download it, print it out, the link is down below,
and fill it in as we go through each fee.
You'll see there is 3 main types of fees.
Some fees everyone pays,
some fees only apply to you if you're in a certain country
or have a certain amount of sales each year,
and some fees are features you can choose to use
and it's totally up to you whether you do or not.
What I'm going to do today is go through each of these,
and as we go you can fill in this worksheet,
because you will understand
if each one is applicable to you,
and how much it will cost.
Once we've gone over all the different fees,
I'll sum everything up with an example.
Ready?
Let's dive in.
(cheerful music)
Bonjour, my name is Deb
and I am the founder of Tizzit.co,
a membership community for makers and handmade shop owners,
just like your fabulous, fabulous self.
You can learn more about our community, Tizzit HQ,
via the link below this video,
but for now let's jump straight into today's conversation,
How much does it really cost to sell on Etsy?
So, what I'm going to do to make this easier to understand
is divide the fees into three categories,
fees that everyone has to pay,
fees that you might have to pay,
and fees for optional services
that you can choose to use and pay for.
For simplicity, for each fee I talk about today
I will use US dollars in my examples.
Let's start with the fees that everyone has to pay.
The first fees we will talk about are listing fees.
Listing fees are the fees that you pay
whether your products sell or not.
They are a fee that Etsy charges
to have your items displayed on the platform.
It's a bit like paying rent,
something you pay for a little corner of Etsy.
For each product you list,
you will pay a listing fee of 20 cents per listing.
This fee covers 4 months of listing
of a single product on Etsy,
which means that if your product sells within those 4 months
and you want to keep that listing active
to sell more of that product you will have to relist it
and pay a new 20 cent listing fee.
If your product doesn't sell in those 4 months
the listing expires and you can either leave it be
or decide to relist it and pay a new 20 cent listing fee.
Now, there are a few extra options
based on the quantity you are selling
or the inventory you have available,
so let's go through some examples to see what it looks like.
Example one, selling one-of-a-kind items.
Let's say you sell for example small silver sculptures
and each one is very unique.
When one of your sculptures sells
that listing will disappear from Etsy
and not be there anymore.
If one of your sculptures doesn't sell for four months
the listing will disappear
unless you wanna keep trying to sell it,
in which case you'll relist it and pay a 20 cent dollar fee.
Example two, using the auto-renew option.
If you don't sell one-of-a-kind
and can sell more than one quantity
of the item you're listing,
you'll likely turn on auto-renew
so your listing doesn't go off Etsy when it sells,
So, with a candle example,
let's say you made a batch of 20 lavender scented candles.
When you create the listing
you will enter the quantity of 20 that you have available
and turn on auto-renew for your listing.
Then, each time a candle sells,
instead of saying "sold out,"
your listing is going to auto-renew,
and you'll be charged 20 cents.
And the listing will stay active on Etsy
with the remaining stock.
Example three.
What if someone buys multiples of the same item?
Etsy also has a fee they call the multi-item listing fee,
which applies to situations where
someone purchases multiple quantity of the same item.
So, let's take our candle examples again.
If you have several candles,
like several of the same candle to sell
and someone decided to purchase say three
out of your 10 candles,
you are going to be charged 40 cents,
and the reason for that is
that the first time you listed the item
you already paid your 20 cents for the listing to be active
and if someone purchases three candles
you then already have paid that first 20 cent fee
and you just need to pay for the two remaining,
which is a total of 40 cents.
Example four, private listing fee.
You can also create what is called a private listing,
not to be confused with customizable or personalizable,
I can't pronounce this word, items
where someone say add customization to a listing.
So for example, text on a pillow, name on print.
This is truly for someone contacting you directly
and asking you to work on
a specific custom project with them,
so you then create a listing just for them.
So let's say one of your customers asked you
if you could make a candle with lavender
and orange scents mixed together,
something you don't currently offer.
You will make a private listing
and send it to that specific customer.
You won't be charged a 20 cents fee
until that specific buyer purchases the candle
from your private listing.
If you still feel a little confused,
what I want you to remember is that
for every single item that you sell on Etsy
it is going to end up costing you at least 20 cents.
Pretty much whatever happens,
once you've sold an item it's going to cost you 20 cents
and if you list an item it's going to cost you 20 cents
every 4 months if it hasn't sold in those 4 months.
Next let's talk about transaction fees.
These fees are something that you must pay
every time you make a sale.
It's basically a bill from Etsy that says,
"Hey, you've made a sale, thanks to us.
This is how much it's gonna cost you,"
and that fee at the time I am recording this video is 6.5%.
Now here's where I see people getting confused.
Your transaction fee is going to be calculated
from the total sale amount
including shipping and gift wrap charges.
Let's look at an example to understand what it looks like.
Let's say you sold one of your candles for $23
and the person who bought it wants it gift wrapped.
Their bill will look like this.
Candle $23, gift wrap maybe $5,
shipping say $5, $33 in total.
So for this order your transaction fee
is going to be $2.15.
So in your worksheet you'll see this fee
is marked as compulsory because everyone pays it.
The only caveat here is that these fees sometimes go up,
they certainly have in the past,
but when they do I'll update the worksheet
and we also included a link
so you can check for yourself that they are still 6.5%
and enter the update percentage if they have changed.
So make sure that you check out that link in your worksheet.
The last fee you have to pay for your Etsy shop
is called a processing fee.
Processing fees sometimes get confused
with transaction fees, but they're different
and they are on top of the transaction fees
that we just talked about.
They are another fee that you pay each time you make a sale,
and they are essentially a fee for the payment
to be processed by whatever payment processor was used.
Now, before we discuss processing fees,
I want to answer a question
that I know a few of you are gonna have,
which is can I use Paypal for my Etsy shop?
In a nutshell, the answer is no, not really,
or least not anymore.
I know some of you may have seen or heard of
shops on Etsy that use Paypal
and this is because for a long time
Paypal was offered as a way to get paid on Etsy,
but this has changed.
Those shops very likely opened before April of 2021,
when Etsy Payments,
which is Etsy's in-house payment processing system,
basically became the only payment processor you can use,
unless you're in India, I'll explain that in a minute.
But anyone opening a shop since then
cannot use Paypal as their payment processor.
You might also be thinking then,
but hey Deb, I'm pretty sure I've purchased stuff on Etsy
using my Paypal account before.
And yes you can do that, but that's a different thing.
Customers, or your buyers, can use Paypal
in most countries to purchase items on Etsy
but that's then processed via Etsy Payments
and so the sellers still get paid via Etsy Payments.
Okay, now that we've cleared that up
let's talk about Etsy Payment fees.
As we just discussed,
if you open a new shop on Etsy today
you will pay Etsy payment processing fees
unless you're in India,
in which case you'll have to check out
the India payment fees instead
which I will link to in your worksheet.
When you use Etsy payments,
Etsy charges a percentage of the total item price,
shipping, and gift wrap, plus a flat fee for each order,
and adds this fee on top of the transaction fee.
The fee varies depending on what country you live in,
but just to give you an idea,
it's between 3% and 6.5% plus the flat-fee.
For the US, which is what we're using
for our examples in this video,
it's 3% plus 25 cent flat fee
at the time of this recording.
But again, you can use the link in your worksheet
to look up the fee for your country
and write it down in the how much column,
then you'll know exactly what you will be paying.
Let's look at what the Etsy payment fees
would be for our candle order.
So, the Etsy payment fees for US Etsy sales
are 3% of the sales price plus 25 cent flat fee per order.
So in this case your fee would be 3% on $33 plus 25 cents,
which is $1.24 total.
Next we're going to move on to fees
that you might have to pay depending on a number of factors.
If you use Etsy payments as your payment processor
you might have to pay what's called a deposit fee
for Etsy to deposit the payment into your bank account.
This fee is only charged in certain countries.
At the time of this video being recorded
its the case for nine countries
in various parts of the world.
And if you live in one of these countries,
the link to that list is in your worksheet,
here is how a deposit fee works.
First, the funds you have earned from your Etsy sale
must be above the deposit minimum
Etsy has set for your country
in order for Etsy to deposit the funds
into your bank account.
If they are below that amount
Etsy will leave the funds in your payment account
until you make enough sales
to get your balance above that minimum.
There is also a fee threshold.
If the deposit amount is above the fee threshold
then you do not have to pay the deposit fee at all.
If your funds from your sale,
which go into your payment account,
are above the minimum, but below the fee threshold,
then you will be charged this deposit fee
and the fee amount is different for each country.
Etsy will deduct the fee from your payment account
and then deposit the remaining funds into your bank.
Action step here is checking with the link
inside your worksheet if you are in a country
where deposit fees applies.
If you are, write how much they are
and what the minimum and threshold are
under the how much column.
Next up, we have currency conversion fees.
Also may need to pay a currency conversion fee
on your listing.
If you list a product in a currency
that is different from your bank's currency,
Etsy charges you a 2.5% fee to convert your funds
from Etsy Payments to the currency of your bank account.
You may also need to pay something called
the value-added tax, or VAT.
Depending on where you are located,
Etsy may be required to collect VAT on your seller fees
and pay it to your country's tax authority.
They may also need to collect VAT
on Etsy Payments processing fees,
again depending on where you are located.
I have a link on your worksheet to the page
that will tell you if Etsy collects VAT for your country
and what the rate is.
And even though it isn't really an Etsy fee
as in, that's not money Etsy is making,
they're just collecting it for the government,
it is something you need to consider
in your cost calculations.
Next let's talk about advertising fees.
Advertising fees can come from two things,
offsite ads and Etsy ads.
Let's start with the first one, offsite ads,
which are mandatory for some sellers, but not all.
Offsite ads will advertise your product
on websites like Facebook, Instagram, Google, and more.
Etsy's offsite ads are optional
if your Etsy shop has made less than $10,000 USD
in the past 365 days,
if you have made more, they're required.
If your shop made less than $10,000 USD
you'll pay a 15% fee on the order,
the total including shipping and gift wrap,
that occurred from someone clicking on your offsite ad.
If your shop made more than $10,000 you'll pay 12%.
So let's say you have set up offsite advertising
for your lavender candles,
and someone Googles lavender scented candles
and sees your ad pop up for your listing
and they click that ad and purchase a candle.
You'll have to pay an advertising fee to Etsy.
Let's assume your shop earns over $10,000 USD a year.
Your fee will be $33 by 12%, which is 36 cents.
Action steps, in your worksheet,
write down whether this applies to you or not
and what percentage you will be charged
if you need to pay it.
Okay, the other kind of advertising fees are for Etsy ads,
also called promoted listings.
And this moves us into the third category of fees,
fees that are totally and 100% optional for any Etsy seller.
Etsy ad fees, unlike offsite ads
which become compulsory above $10K,
are 100% optional and you can decide to use them or not,
meaning you can decide to pay for them or not.
They are those promoted listings
that appear on the Etsy site when someone is shopping.
So if someone types lavender candle on Etsy
you could pay to have your lavender candle listing
show up higher in the results than it would have otherwise.
These ads, called "promoted listings",
use a bidding auction system.
The highest bidder for the keyword gets the promoted spot.
When you set up your Etsy ads you will set a daily budget
and Etsy will use this information
to do your bidding automatically each day.
These ads are just like your Facebook ads or Instagram ads,
you pay per click.
The amount you pay will depend on
how many people click your ads and where your ad appears.
Now let's move on to the other optional fees
that you may have to pay
depending on what options you choose for your listing.
The first is shipping label fees.
Etsy shipping labels are not available in every country
and are only offered for certain carriers
inside those countries.
So if you use one of these carriers
you can choose to print an Etsy shipping label
for your package.
And the fees charged will depend on the weight
and dimensions of your package,
the origin and destination you are shipping to,
as well as any insurance coverage you want to purchase.
Another optional fee is the Etsy Pattern fee.
Pattern is a website builder
that allows you to have your own website at your own URL
but that is still connected to your Etsy seller account.
So for example, if your candle business
is called Candles by Susie, you can use Pattern
to create a website called candlesbysusie.com,
and have your Etsy listings on this website.
If you choose to have a pattern website,
you will be charged a flat $15 a month.
Square fees.
Etsy has a partnership with Square
that lets sellers sell their products
using Square card readers.
If you sync your Square reader to your Etsy inventory,
you'll be charged the transaction and listing fees
we have discussed previously
If your inventory is not synced
to your Square card reader,
you will be charged 20 cents per transaction by Etsy.
Another fee you might encounter
is the Etsy seller subscription fee.
Etsy has a subscription service called Etsy Plus
that you can enrol in to receive a number of benefits
like credits for shop listings and Etsy ads,
advanced shop customization and more.
If you have a Plus subscription
you'll be charged a flat $10 a month.
Congratulations, my friend.
You made it through most of the video
and now you have a good understanding
of all of the Etsy fees.
Cheers to you for sticking with me on this.
I know that trying to understand all these different fees
can make your brain hurt, like a lot.
(laughs)
So, now let's put it all together
and look at a simple example
of what you are going to be paying.
I will use an online calculator.
There are a tonne of them online
that you can find if you Google Etsy fee calculator.
I will use the one from Alura.
Now, obviously this is really hard to calculate
for an entire shop's sales,
because it's going to depend on so many things.
If for example you sell one product
that costs one thousand dollars
the fees are going to be different
than if you had one thousand sales of one dollar items.
Some fees as we've seen,
you'll also only need to pay in some instances.
So let's keep things simple for this example
and let's just look at the fees
that you will definitely 100% pay,
because no matter where in the world
you're watching this video from,
I know you'll at least be paying that.
So it's your starting point if you wish.
What you know you'll pay at least.
So let's use the candle sale example
we've been using for this video.
For this sale your initial sales revenue is $33,
and the fee calculator shows that
your listing fee will be 20 cents, your transaction $2.15,
and your processing $1.24.
Now if we use this same example
but assume you are using offsite ads
and your shop makes less than $10,000 a year,
you can toggle the onsite ads button
and choose a fee percentage of 15%.
Your fee calculator now shows an offsite ads fee of $3.96
in addition to the fees we listed earlier.
So as you can see, this calculator shows you
how much your total fees on Etsy would be
and factors in what it costs you to produce this product
so that you can see your total profit and profit margin.
And that's how you break down your profit.
Now, an important note.
This calculator computes your Etsy fees,
which is what Etsy charges you,
but remember that what you really want to keep an eye on
is your total profit and your profit margin,
which are going to depend on
how much it actually costs you
to create this product as well.
So, this is really a whole separate topic,
but that's why you see here that the total profit
is much lower than $33 minus $3.58.
$21.46, it's because on top of those Etsy fees you pay
you have other costs that you have to pay
to produce this product.
Material, labour.
So it's very important that you price strategically
and with all this in mind so you can make a healthy profit.
If you haven't printed out the worksheet yet
and are ready to calculate your Etsy fees,
I've got the link down below this video
for you to print it out, download it,
you can just fill it out on your computer as well.
You didn't even need to print it
if you don't have a printer.
But make sure that you download that worksheet below.
Thank you so much for watching
and until next time, au revoir.
(beep)
(stammering)
This is great, great start.
Cool.
Let's say you smell.
Let's say you smell, what?
Blah blah blah blah.
Checking with the link inside your work ship if your-
your work ship?
Nope.
If your shop made less than $10,000.
Blah blah blah blah.
Less than Tay K USD, you will pay.
(stammering)
Your offsite ad fees will be.
So, just bear with me.