Understanding Etsy Fees

by , under Etsy Shop

It’s been a long time since I last posted, and I have good reason for it.  My humble explanation is soon to come, but for now I am posting this information to help out a friend who is opening her first Etsy shop.

When I first opened mine, the fees were mind-boggling to me and I couldn’t make sense of them.  The problem was that the help sections gave one name to a fee, but the fee would show up on my bill under an entirely different name.  I don’t know why Etsy hasn’t caught on to this yet and fixed it.  But in the meantime, you can trust this handy-dandy guide to figuring out the fees you will be charged and under what name to locate them on your bill.

Click to Download

Click above to download a spreadsheet to estimate profits and costs.  It includes the fees below, so you can plug in prices and tinker around to find how much profit you can make.

 

Fee: Listing Fee
Cost: 20 cents per listing

Every time you list an item, Etsy will automatically charge you 20 cents.  If you list an item with a quantity more than one (say, you have a digital download and you list the quantity as 100), you will be charged 20 cents every time some buys the item because the next one in line is considered “relisted”.

The only time you are not charged 20 cents upfront is when you make a custom order straight from a private conversation.   Etsy will let you know if you are being charged or not via a pop-up box, so there are no guessing games.

Fee Name (as it shows on your bill):  Transaction Fee
Cost: 3.5% of the total cost to your buyer

Whatever your buyer pays for the item AND shipping, Etsy charges you 3.5% of that cost.  This is not calculated into the cost of the item and is a fee you pay in addition to the listing fee after the item sells.  You can factor in the cost of this fee into your price, but remember that raising the cost of the item also raises the cost of this fee since it is based on a percentage.

Example:  For example, if the item price is $5  and the shipping price is $2, the fee is 3.5% of $7 (24.5 cents)

Fee Name (as it shows on your bill):  FEE (USD)
Cost: 3% of the price of the item (NOT including the shipping price) + 25 cents

This is the most confusing of the fees.  If a customer pays with a credit card (you will see it called Direct Checkout on your bill and order forms), you are charged this fee through Etsy.  The fee is 3% of whatever your buyer paid for the item, but unlike the Transaction Fee above which includes the shipping cost, this fee does NOT factor in the shipping cost.

Example:  For example, if the item price is $5  and the shipping price is $2, the fee is 3% of $5 (15 cents)  Then tack on the additional 25 cents to get a total fee of 40 cents.

As with the Transaction Fee, you can factor in the cost of this fee when figuring out what to charge the customer, but raising the price of the item will raise the price of this fee.  Because this fee doesn’t include the cost of shipping, I usually tack on this extra expense on the shipping price.  But remember, doing that could raise the Transaction Fee because it does include the shipping price.

NOTE: the only time you won’t be charged this fee is if the customer pays via PayPal.  If that is the case, you will see on the order form that they paid with PayPal, and you won’t be billed the FEE (USD) through Etsy.  However, PayPal charges a fee anytime you receive money through them from a sale.  The fee is slightly more (by a few cents) than the FEE (USD) that Etsy charges.  You can find how much PayPal charges by checking out your Recent Activity on your  PayPal homepage and clicking Details for each transaction.

That’s just about it!  If any of this confuses you or you need more help understanding Etsy’s fees or any aspect of Etsy, just ask!

Open an Etsy Shop

Related Articles:

Want to open an Etsy shop?

A Little Bit About thelittledabbler Etsy Shop

  1. Cheri

    Quick question. Does that mean there will always be two fees per item? (Assuming Paypal isn’t used.) I’ll need to reevaluate my prices a bit.

    I use a simple formula to figure out what to charge:
    (Profit + materials)/(1- % of fees and taxes)

    Basically, I pick what my time is worth, add what it cost me to make the item, and divide by what % of the price that is.

    Speaking of taxes, any advice?

    • Libby Sawyer

      I think what you are asking is are both the Transaction Fee and FEE (USD) charged? The answer to that is yes. For every item you sell, you will be charged the three fees listed above. So, for every item you sell, you will essentially be paying approximately 6.5% plus 45 cents in fees. That gets so confusing to figure out, so I created the spreadsheet to plug in numbers. If I know it will take an hour to make the items, I make sure that my profit for the item equals out to about $7/hour.

      As far as taxes go, I don’t charge them and Etsy doesn’t charge them. You only have to worry about taxes if you make over a certain amount of money, because then Etsy has to report it to the IRS.

      • Cheri

        That was exactly what I wanted to know. Thanks again! Now, I need to find the charger for my camera so I can get some good pictures!