As an aspiring Etsy seller, you must be excited to start selling your handmade or vintage items on one of the largest and most popular online marketplaces out there. But before you jump in, there are a few things you should know about the Etsy marketplace and the fees involved in selling on Etsy. In this article, I’ll break down the numbers and provide you with all the essential information you need to know before starting your Etsy shop as a seller and how much does it cost to start an Etsy Store.
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Understanding the Etsy marketplace
Etsy is an online marketplace where buyers and sellers come together to buy and sell unique handmade or vintage items. It’s a platform that allows small businesses and individuals to showcase their creativity and sell their products to a global audience. Etsy has over 4 million active sellers, and the platform generates over $10 billion in sales annually.
The Etsy marketplace is known for its unique and creative items, and it attracts buyers who are looking for something different than what they can find on traditional online marketplaces like Amazon or eBay. As an Etsy seller, you have the opportunity to reach a global audience of buyers who appreciate handmade and vintage items.
Etsy seller fees & payments policy updated
Etsy has updated its fees and payments policy to make it more transparent and easier for sellers to understand. The new policy went into effect in 2023 , and it includes changes to the fees that Etsy charges sellers. We will get into more details about this further down.
| Type of fee | Cost of the fee | Example |
| Etsy listing fee | $0.20 per item | 50 product listings x $0.20 = $10 |
| Etsy transaction fees | 6.5% transaction fee on the total amount of sale | $50 x 6.5%= $3.25 |
| Etsy payment processing fee | 3% + $0.25 on the total amount of the sale | $50 x 3% + $0.25 = $1.75. |
| Currency conversion fee | 2.5% basic fee Exchange rate dependent | $50 x 2.5% = $1.25 |
| Etsy Off site Ads | 15% on the total sale amount | $50 x 15% = $7.50 |
| Additional cost | Variable | Variable |
| Value added Tax | Variable | Variable |
Etsy Seller Fees – How Much Does it Cost to Start an Etsy Store?
As an Etsy seller, you have to pay fees to Etsy for the privilege of selling on their platform. These fees can add up quickly, so it’s essential to understand what they are and how they work. Etsy fees can be broken up into seven different sections.
Section 1: Etsy listing fee
Etsy charges a $0.20 listing fee for each item you list on their platform. This fee is charged when you create a new listing or renew an existing one. The listing fee is non-refundable, even if your item doesn’t sell.
This listing fee is a flat rate. So, it doesn’t matter how much your product costs. For example, if you upload 50 products 50 x $0.20 = $10.
| Etsy listing fee | $0.20 per item | 50 product listings x $0.20 = $10 |
Section 2: Etsy transaction fee
Etsy charges a 6.5% transaction fee on the total amount of the sale, including shipping costs. This fee is charged when you make a sale on Etsy.
For example, let’s say you make a sale on a product and the customer paid $50 including shipping. Etsy will take 6.5% of that amount which will amount to $3.25.
| Etsy transaction fees | 6.5% transaction fee on the total amount of sale | $50 x 6.5%= $3.25 |
Section 3: Etsy payment processing fee
Etsy charges a payment processing fee of 3% + $0.25 on the total amount of the sale, including shipping costs. This fee is charged when you receive payment from a buyer.
For example, you sell a product for $50 then Etsy will take 3%+ $0.25 which will equal too $1.75.
| Etsy payment processing fee | 3% + $0.25 on the total amount of the sale | $50 x 3% + $0.25 = $1.75. |
Section 4: Currency conversion fee
According to Etsy’s guidelines, it is advisable to list your products in the currency you receive payments in. In case you opt for a different currency, you will be charged an extra fee. It is recommended to follow the platform’s currency listing policy to avoid additional charges.
However, if your store is in a different currency to what you get paid in then you might see a 2.5% basic fee. This is also dependent on exchange rates etc.
For example, a $50 sale can see a fee of $1.25.
| Currency conversion fee | 2.5% basic fee Exchange rate dependent | $50 x 2.5% = $1.25 |
Section 5: Etsy Off site Ads
Etsy Off site ads are any adverts Etsy has made online that converts to sales. If Etsy brings you a sale from one of their online marketing efforts, then you will be charged an additional 15% on the total sale amount.
For example, your product sells for $50 then you will be charged another $7.50.
| Etsy Off site Ads | 15% on the total sale amount | $50 x 15% = $7.50 |
Section 6: Additional cost
In addition to the fees listed above, there may be additional costs associated with selling on Etsy but these costs are only if you decide to add them.
For example, you can use Etsy marketing which can cost you anywhere from $1 to $100 a day. You can set up discounts etc.
| Additional cost | Variable | Variable |
Section 7: value added tax
The final cost that you will encounter is tax. Tax is calculated on the price of each sale. This all depends on where you are from and the cost of the sale.
| Value added Tax | Variable | Variable |
Etsy Seller Fees – How to Save Money on Etsy?
If you’re looking to save money on Etsy fees, there are a few things you can do. First, you can list multiple items in one listing to save on listing fees. This is a great option if you have several items that are similar or go together.
Second, you can offer free shipping on orders over a certain amount. This can encourage buyers to purchase more items from you, which can help offset the cost of shipping.
Conclusion
Starting an Etsy shop as a seller can be a great way to showcase your creativity and sell your handmade or vintage items to a global audience. However, it’s essential to understand the fees involved in selling on Etsy and how to save money on those fees. By following the tips and information provided in this article, you can start your Etsy shop with confidence and maximize your profits.
