One question that I frequently get from friends and family is: “Is it worth it to sell on Etsy?” Today, I’m going to dive into this answer by sharing with you the exact fees Etsy withholds from a sale, and transparently sharing with you what I actually make off of a sale. I’m hoping that this not only brings insight to those of you looking to open a shop, but also to those of you who are buying off of Etsy. Let’s dive on in!
Is it worth it to sell on Etsy?
Truthfully, the answer to this question lies in the motivation behind why you are selling in the first place. If you’re like me and it’s just a small hobby on the side, then yes! It is worth it. If you’re looking to make this your livelihood, I would definitely take the fees in consideration, as well as the ebb and flow of online sales. There is no way to guarantee sales and this post that I recently wrote will give you a clearer picture of what I mean.
A look at Etsy Fees
When you sign up for Etsy, you consent to having certain fees and percentages withheld from a sale. This includes, but isn’t limited to: Listing fees, processing fees, and transaction fees. You also have an option to use Etsy Ads, but I will get into that later. For now, let me break down these fees for you, their cost, and what they are for:
- Listing fee: Every listing on Etsy costs a flat rate of $.20. Whether it’s a new listing or a renewed listing (a listing that was purchased and reposted), you will always pay $.20 per new listing. It is important to know that listings expire after four months. At that time, you have the choice to pay the listing fee again or not to renew the listing.
- Processing Fees: 3% of the order + $.25. Etsy charges a fee for processing an online payment. According to Etsy Legal, “Payment processing fees vary based on the location of your bank account. In certain markets, a fixed deposit fee may be charged for the disbursement of seller funds that are under certain designated thresholds.” I will link this page below. From my understanding, it is possible that certain banks charge less when connected to Etsy Payments.
- Transaction Fees: 6.5% of the order total including the price of shipping. After making a sale, 6.5% of the listing price will be paid directly to Etsy. This will come directly out of your available balance on your Etsy Payments account.
Cost of Advertising
As far as the cost of advertising goes, you have two options: Etsy Ads and Off-site Ads.
- Etsy Ads: You have the option under the “marketing” section of your dashboard to enable Etsy Ads. You set the dollar amount that you’re willing to pay and they will show your listing ad on their website until you have met your ad allowance. You can turn this off at any time.
- Honest insight: I personally tried this for a month and hardly broke even in the end. I don’t recommend Etsy Ads to shops that are selling low-cost digital downloads. If you are selling handmade art and need some extra exposure, I would recommend trying this out for a week and see if you benefit from it.
- Off-site Ads: What Etsy isn’t very transparent about is that they automatically enroll you into off-site ads after you hit a certain number of sales and there is no way to opt out. You have to pay this fee regardless of whether or not you wanted to use this service. If a customer clicks on your ad and subsequently purchases you listing, you are subjected to a 12-15% charge. This is outrageous if you aren’t expecting this expense.
An Example of Listing Fees
If you go to your seller dashboard and look at your finance account, you can get an itemized list of fees/sales. I’m going to share a recent example of a listing that sold via off-site ads. Etsy does a good job labeling and explaining exactly what each charge is for.
As you can see, my listing may have sold for $2.10 (it was 30% off for a sale), but I actually only made $1.13 before tax. The fees definitely add up. I lost about 32% of my sales to Etsy fees in April 2023.
Note: This was a digital sale. If you were to sell a physical item that requires shipping, there are additional fees added for using Etsy for shipping labels and insurance. You are able to manually alter the shipping profile price on each listing to include a set fee for handling. This fee will be added to the cost of shipping, ad your customer is responsible for paying that fee. It helps to offset those extra fees. If you want to use Etsy for shipping services, take that in account when setting your shipping and handling price.
When I sell physical items, I use a free website called PirateShip to purchase my shipping labels. They supply shipping labels at a discounted price to print at home, and they include tracking numbers if your business offers those to your customers.
So… is it worth it?
If you are okay with paying these fees, then it is definitely worth it to sell on Etsy. Because I enjoy doing it, I am willing to consent to paying all of the fees. I also don’t have to pay for supplies now that I mainly sell digital products, so my main expense is time, not product. Some sellers are blindsided by these fees, and it isn’t worth the cost of creating and producing their product while also competitively pricing in order to bring in sales.
I hope that this post helps bring you some clarity when it comes to Etsy fees and deciding if Etsy is worth it to you!