Etsy Fees: How Etsy Makes Money

Etsy fees are the way Etsy makes money from the millions of buyers and sellers using the platform each year. The platform generates more than $330 million in revenue from marketplace fees, including listing and transaction fees.

Luckily, most of the fees are based on whether and when an item in your shop sells. After a purchase is made, Etsy will automatically take a portion of the sale based on the fees below.

All sellers should stay in the loop about Etsy fees, because they can change at any time. As recently as April 2021, Etsy increased the transaction fee from 5% to 6.5%, which impacts seller margins if you do not adjust accordingly.

Don't have your own Etsy shop yet? Read my Ultimate Guide to Selling on Etsy here.

Listing Fee

Etsy charges sellers a listing fee of $0.20 for every product they list for sale in their shop.

If you haven't opened an Etsy shop yet, make sure to ask a friend for their shared link. By using a referral link, you get 40 free listings and the person who referred you also gets 40 free listings! 

Here's my Etsy referral link if I've been a good friend or resource as you start your Etsy seller journey! 🙂 

Transaction Fee

When you sell an item through your shop on Etsy, Etsy will charge you a transaction fee of 5% of the price of the item.

Shipping transaction fee

The company introduced a shipping transaction fee of 5% on the cost of shipping on July 1, 2018. So, if you sell a product on Etsy, you will pay 5% of the transaction cost plus 5% of the shipping transaction cost. This is also another way Etsy uses to encourage sellers to offer free shipping. 

Etsy Ads

You can pay to advertise your shop(s) and products on Etsy. You can access this option through the Advertising Dashboard in Shop Manager. There you can set up a limit for the amount you will pay for advertising your business on Etsy.

Off-site Etsy ad fees

Etsy advertises on behalf of sellers on platforms like Facebook, Pinterest, and Google. Sellers who make $10,000 or more per year are automatically included and have to pay 12 % fee on every sale that results because of the advertising undertaken by Etsy.

Shop owners who make less than that, only have to pay 15% fee and they are not obliged to participate, they can opt out.

How To Pay Etsy Fees

To choose how you’ll get paid, you must know if your country is eligible to use Etsy Payments. Etsy Payments gives your buyers different options to pay for their order. Then, they consolidate all the payments for you in your Etsy Payment account.

If you’re in a country is not eligible for Etsy Payments, you can use your PayPal account.

Setting up your billing will depend on the country you’re in. You may need to enter a credit or debit card to open your shop. This could be any of the following cards:

  • Visa 
  • Mastercard 
  • American Express 
  • Discover 
  • Carte Bleue (France)

Mom Has The Last Word

Think you have what it takes to start an Etsy shop? Hop over to my Ultimate Guide to walk through the steps of opening your Etsy shop in a day!

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