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.

What Are the Fees for Selling on Etsy?

The fees for selling on Etsy include some fees that can't be avoided and other fees that are part of optional “upgrade” features that are not required for sellers.

While the Etsy seller handbook details several types of fees, don't be overwhelmed before starting an Etsy shop! Many of the fees may not even be relevant to you based on what you sell or from which country you operate your shop.

Currently, there are two main fees that Etsy sellers incur for every sale that can't be avoided: a listing fee and a transaction fee.

While I explain each in more depth below, the easy way to think about these fees is this. The listing fee is a flat rate that is charged to your account right away as soon as you post a new item for sale.

The transaction fees are calculated based on a percentage of the sale, and are only charged to you after a customer makes a purchase.

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 6.5% of the price of the item.

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 Selling on Etsy to walk through the steps of opening your Etsy shop in a day!

TPM The Ultimate Guide to Selling on Etsy Cover Image With Title

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