Overview: Etsy Fees | How Much Does it Cost to Sell on Etsy (Etsy Seller Fees)
Etsy, since its establishment in 2005, has become one of the most popular peer-to-peer e-commerce websites. The transactions revolve around selling handmade items, vintage items (which must be at least twenty years old), and crafting supplies.
New sellers, however, are confused when starting out and are wondering, “How much does it cost to sell on Etsy?” Calculating how much it costs to sell on Etsy involves three main aspects:
- Listing prices
- Etsy transaction fee for sales
- Etsy transaction fee for payment processing
Determining overhead costs is imperative to any business, so potential sellers should pay special regard to these Etsy fees. Etsy receives plenty of traffic, but how much do Etsy fees—that is, Etsy seller fees and Etsy transaction fees—affect a seller’s potential profits?
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Setting Up
When trying to figure out how much it costs to sell on Etsy, potential sellers wonder about Etsy fees for setting up their “shop” on the Etsy website. However, there is no sign-up Etsy fee or even a monthly membership cost.
Setting up a shop is relatively easy, and sellers can choose from a wide variety of preferences, such as shop language, shop country, shop currency, and shop names. Also, sellers can add their own personal character to their shops by applying interesting logos, their selling backstory, colorful fonts, and even photo backgrounds.
Image Source: Etsy
This free set up, of course, lowers the overall cost to sell on Etsy.
After setting up their shops, sellers are ready to make their first product listings. Determining the answer to “how much does it cost to sell on Etsy?” starts with understanding the listing price—which might seem innocent at first.
Listing Price
This Etsy fee is a mere $0.20 USD per listing, and each will last four months, or until someone buys the particular item. This Etsy fee, however, becomes complicated when a seller lists multiple items under one listing. The cost to sell on Etsy then goes up because this Etsy fee of $0.20 does not apply to all of the items posted under a single listing.
Etsy itself provides an excellent breakdown on their website in regard to this particular cost to sell on Etsy. In their example, they use a quantity of bowls as the item being sold. Say a seller is listing only one of these handmade bowls. The listing fee is $0.20, and if this listing is set to renew after four months(automatic renewals are an option), the Etsy fee is another $0.20.
Let’s say the seller lists four bowls under a single listing—this is the quantity available for sale, much like a stack of T-shirts in a store. The Etsy fee is $0.20 for the entire quantity.
This time, however, only one bowl of the four is sold, and three are left over. What happens now? The list price automatically renews (an additional $0.20) because three bowls are left over. Obviously, this raises the cost to sell on Etsy if it occurs often, but if a seller’s product is generating enough profit, it may not matter.
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In another example, Etsy considers a single list posted for a total of ten bowls. The original Etsy fee, as previously mentioned, is a mere $0.20 for the single listing, which now includes ten bowls.
However, the irony of this Etsy fee would become apparent if all ten bowls were sold at once in a single purchase. In this case, the original Etsy fee for listings will then be applied to only the first bowl. For the remaining nine bowls that were also sold, an additional $0.20 would be charged for each bowl. The Etsy fee for renewal, again, would be another $0.20.
The Etsy fee for listings adds to the cost to sell on Etsy because sellers cannot get away with using a single list to sell a large group of items. So when trying to figure out how much does it cost to sell on Etsy, sellers should pay special attention to the Etsy fee for listings. Sellers may list a surplus of items under a single listing, but they would actually have to pay $0.20 for every item sold—even if those items are originally grouped together.
The listing price would mostly affect sellers who are trying to sell a great number of smaller objects at lower prices. For example, say about 1,000 items a month are sold on average; the seller would pay the Etsy fee of $0.20 for each item, or $200. On the other hand, sellers aiming to sell only a few expensive items would be affected less by the Etsy fee for the listing.
Understanding the listing price is the first aspect to determining the answer to the question: “How much does it cost to sell on Etsy?” Next, we’ll look at the Etsy transaction fee for the sale and the Etsy transaction fee for the payment processing.
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Etsy Transaction Fees for the Sale and Payment Processing
For the Etsy transaction fee for the sale, the website charges 3.5% of the selling price. This percentage does not apply to the relevant tax rates or shipping rates. However, if the sellers wish to use Etsy’s Direct Checkout, an additional Etsy fee is applied, depending on the seller’s location.
In regard to US sellers, an Etsy fee for payment processing will be 3% plus $0.25 for every transaction that uses Direct Checkout. What is more, the Etsy fee for using Direct Checkout actually applies to shipping fees and sales tax—unlike the Etsy fee for the sale.
Image Source: Etsy Seller Fees
The transaction fee is straightforward, but many sellers often wonder how Direct Checkout will affect their cost to sell on Etsy.
Originally, before Etsy introduced Direct Checkout, most transactions occurred through PayPal (which applies 2.9% plus $0.30 per transaction), and sellers often liked using PayPal because once a sale was made and the money was transferred, sellers could transfer the money from their PayPal accounts directly into their banks.
Direct Checkout might be preferable, however, due to its safety and versatility.
Direct Checkout is a secure SSC-encrypted platform, and Etsy has security specialists and anti-fraud systems in place to help protect buyers and sellers. The payment system can accept a wide variety of payment methods.
Also, Etsy has integrated PayPal into Direct Checkout, but sellers do have the option to go solely through their PayPal accounts. In addition to the payment versatility, Direct Checkout deposits sellers’ profits directly into their bank accounts.
There is an Etsy fee for currency conversions, however. This occurs when sellers list items in currencies other than that of their bank accounts. In such cases, Direct Checkout converts the sale into the currency of the sellers’ banks, and Etsy applies 2.5% to the current market rates.
In regard to how much does it cost to sell on Etsy, sellers often ask whether using Direct Checkout or PayPal is preferable. Once again, the Etsy fee for Direct Checkout is 3% plus $0.25 for every transaction; for PayPal, 2.9% plus $0.30. The question, it would seem, is unnecessary to long-time sellers on Etsy.
They prefer to have both options available, which allows them to make sales with people from countries all over the world where either Direct Checkout or PayPal is not available.
The benefits of Direct Checkout, when determining how much does it cost to sell on Etsy, might not be best represented in figures. Sellers who go through Direct Checkout are automatically enrolled in Etsy’s seller protection policies. However, sellers must ensure that they adhere to the seller eligibility requirements and order eligibility requirements.
There are no Etsy seller fees or Etsy transaction fees for these protection policies, but seller protection ought to be considered when determining how much does it cost to sell on Etsy. Such protection helps sellers protect their sales long-term, which is a benefit that offsets the costs to sell on Etsy.
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Promoted Listings
Promoted listings are another aspect to consider when determining how much does it cost to sell on Etsy. According to Etsy, promoted listings allow sellers to get their products in front of shoppers more frequently. In short, sellers’ listings become ads displayed in buyers’ search results for products.
The Etsy fee for promoted listings are actually chosen by the sellers—that is, sellers allot a daily budget for this service. Once budgets are set, Etsy does the rest—at no additional Etsy transaction fees or Etsy seller fees.
Etsy uses several factors to determine which promoted lists show up in search results. Etsy connects the promoted lists to buyers’ actual searches. Buyers have preset filters for their searches, which will weed out certain promoted listings. This is done so sellers’ promoted listings are not wasted on buyers if the product is outside a designated price range or cannot be shipped to a buyer’s particular location.
In regard to promotional listings, sellers need to consider their absolute “bid,” which is the highest amount a seller is willing to pay for one click on the highlighted listing. While not exactly an Etsy fee or Etsy seller fee, a detail-orientated seller will consider this bid amount when determining how much does it cost to sell on Etsy.
Most sellers allow Etsy to determine the best bid amounts, which the website determines by analyzing mainly lists’ histories, lists’ prices, and sellers’ daily allotted budgets for promoted listings.
However, sellers can increase or lower their bids if they believe doing so is necessary. Sellers, at no additional Etsy fees, can raise bids to provide their promoted listings more attention, or they can lower their bids if they want to extend their daily budgets.
Promoted listings do not hassle sellers with additional Etsy seller fees or Etsy transaction fees, but considering promoted listings is a must for a serious seller who is determining how much does it cost to sell on Etsy. Promoted listings are a potential form of advertisement that will add to the overall cost to sell on Etsy, and such advertisement costs need to be considered when sellers are trying to determine successful overhead costs.
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Conclusion
Due to Etsy’s popularity, sellers of handcrafted items, vintage items, and crafting supplies often consider Etsy as their premier place of sale. Etsy, an excellent peer-to-peer e-commerce site, allows great versatility to sellers when they are creating their shops, and the site allows many forms of payment, allowing sellers to reach more potential customers in a greater number of countries.
However, potential sellers need to consider Etsy fees when determining how much does it cost to sell on Etsy. The few Etsy seller fees or Etsy transaction fees do add up, so a prudent seller will consider the various Etsy fees when delineating their overall business model—such costs to sell on Etsy certainly factor into overhead costs.
What is more, the Etsy fee for the Direct Checkout payment platform is a rate very similar to PayPal, but the many payment options within Direct Checkout allow sellers to reach more customers, who often have their unique preferences for issuing payments.
In addition, the payment protection provided to sellers who use Direct Checkout is a benefit that offsets the costs to sell on Etsy.
Advertising, of course, is a part of any business, and Etsy provides the option of promoted listings—at no particular Etsy seller fee or Etsy transaction fee. Sellers can determine how much they want to spend on promoted listings, and Etsy helps to determine the best bid price, at no extra Etsy fee.
When sellers factor in the Etsy listing price, the Etsy transaction fee, the Etsy payment processing fee, and the Etsy payment structure for promotional bids, they’ll have a solid grasp of how much does it cost to sell on Etsy, and thus on their potential overhead costs.
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