Etsy is one of the world's most beloved online marketplaces. Spend any time browsing through and you’ll soon find yourself with a few items saved for later. Etsy sellers sell everything from vintage finds to handmade crafts to fancy arts and artisanal goods. Those sellers also have to deal with fees!
On the surface, Etsy seller fees are straightforward. They charge 0.20 USD per listing plus a 5% transaction fee. Easy, right? Not so fast. There are many Etsy transaction fees that you may not even be aware of, and things can get a little complicated when trying to work out the likes of VAT and taxes. Before you sell on Etsy, you need to know exactly how their fees work.
There are eight different types of Etsy fees:
And here is everything you need to know about them:
Listing fees are charged at 0.20 USD every time you list or renew a new item in your Etsy shop. Your listings are active for four months or until your items are sold. You still need to pay a listing fee, even if items don’t sell.
Your transaction fees are calculated according to the currency you’re using and may include postage and gift-wrapping charges. You may also see a delivery transaction fee charged at 5% of the total postage cost of the item and a Square manual transaction fee when you sell items in person, not via your Etsy shop inventory. Transaction fees are 0.20 USD per listing. An additional payment processing fee may apply.
There are several Etsy payment processing fees to take into account. This includes:
You can buy Royal Mail postage labels directly through Etsy. These fees depend on what is being shipped, where it's being shipped to, and other variables.
There are two Etsy advertising fees, including Etsy ads and offsite ads. Etsy ads refer to internal promotions on the Etsy site, charged at a cost-per-click rate. You can set a budget to limit your ad fees. The fee you are charged will depend on the value of the placement and the number of clicks you receive.
Offsite ads appear on ad space purchased by Etsy on other platforms such as Google, Instagram, and Facebook. You only pay ad fees when an ad leads to the sale of one of your items, and you will be charged a discounted advertising fee if you sell more than $10,000 on Etsy in a year.
If you want to really shine on Etsy, you should consider a subscription to Etsy Plus. The Etsy Plus subscription fee is around $10, and you'll receive discounted addresses, custom packaging and promotional materials.
You can create an Etsy Pattern website for free, but once it goes live, you'll be charged $15 per month until you opt-out. You'll also be charged a domain registration fee, renewal fees and restoration fees if you continue using your domain after a year.
Now that you know the ins and outs of Etsy fees, you need to ensure that you are paying them appropriately. Etsy takes strict measures against payment avoidance. Payment avoidance, either by altering prices, misrepresenting your location or encouraging buyers to make a purchase off-platform, may lead to Etsy closing your store and preventing you from making another one.
Ety's transaction fees, payment processing fees, listing fees and subscription fees can be daunting, to say the least. Selling on Etsy requires keeping a close eye on your books, especially shipping charges and other fees that can eat into your profits.
For example, let's say you produce necklaces for Etsy. The beads, charm and string you use cost $5 altogether for each necklace. You sell them for $10 and charge a $5 shipping fee.
You will need to add the following:
Along with your production costs, it will cost $6.56 to produce each necklace, so you may want to increase your pricing if you need to make a $5 profit.
While Etsy does send settlement statements, it doesn't make tracking your costs any easier. If you don't keep track of your Etsy fees, you won't be able to determine your profit margins (and you might miss out on tax breaks).
Luckily you can use a tool like Link My Books to make Etsy accounting much easier. Every time you receive a payout from Etsy, Link My Books will create a summary of all of your sales, fees, refunds, taxes and VAT. These statements can be sent directly to Xero or QuickBooks for bank reconciliation.
Selling on Etsy shouldn't mean spending hours sorting through bank statements with a calculator. Link My Books makes Etsy...easy!