For artists and designers, Etsy is no less than a blessing. It is the best place for creative people to turn their hobbies into an online business. With Etsy, sellers don’t have to worry about paying any rent, taking care of inventory, or even hiring employees to manage their store.
Sellers on Etsy can only focus on making creative designs. They don’t need to know how to make a website or market their products to people. Etsy does it all for them.
However, one problem that many sellers face with Etsy is their complex fee structure. We will break down all the different types of Etsy fees so you can have a clear idea of the cost involved before starting your online store on Etsy.
The Standard and Plus Plans on Etsy
The standard plan does not cost anything monthly. However, there are additional listing fees, payment processing fees, delivery fees, and many other kinds of fees that you need to pay.
The plus account would cost sellers $10/month. You get all the advantages of the standard plan along with some additional benefits.
Some of the additional benefits are:
- 15 free listings monthly (worth $3)
- $5 Etsy ads credit
- Special discounts on custom domains
- Additional tools for better shop customization
Various Fees that Etsy sellers have to pay
Etsy requires the sellers to pay fees for various purposes. Some of the charges are flat fees, while others are percentage-based. We will talk about all of them so you can estimate the cost of running an Etsy store.
The fee for listing each item on Etsy is $0.2. It doesn’t mean that you can sell multiple identical items for just one listing fee of $0.2. For example, if you are selling five identical signboards on Etsy, you would have to pay a listing fee of $1 combined for them.
Transaction fees in Etsy are different from what sellers pay for payment processors. Transaction fees of 5% per sale are Etsy’s commission for using their platform. The transaction fees don’t cover wrapping and product customization.
There is also a shipping transaction fee that sellers need to pay. The charge is 5% of the shipping price.
You don’t have to pay 5% fees on your sales tax if you are from the USA or Canada. For sellers from other countries, additional charges may be applicable on sales tax.
Payment Processing Fees
Etsy has payment processors you will use if you belong to one of the 36 eligible countries that support the system. The fee for each Etsy payment processing is 3% of the total payment plus $0.25.
If you are not from one of the 36 eligible countries, you can use PayPal or Square, which typically costs 2.9% plus $0.30 processing for each payment.
Etsy Pattern Fees
If you are looking to create an online store, you should check out Etsy Pattern. It costs $15/month and allows you to list products for free for an unlimited time.
The pattern store links with your Etsy seller account. You can also try it for free for 30 days to see if it suits your needs.
Square In-Person Selling Fees
Etsy has teamed up with Square to provide sellers an option to collect in-person payment. It is necessary to own a square card reader to be eligible for this option.
Everything is like usual, except instead of the 5% transaction fees, you would be paying Square processing fees. For each transaction, the Square processing fee is 2.6% plus $0.10.
Currency Conversion fees
Sellers should set the listings in the same currency as their payout currency. However, if sellers don’t do that, the cost of currency conversion is 2.5% of the total amount.
You can also avoid this if you are using PayPal as a payment processor.
Etsy Ad Fees
You can choose to market your listings on Etsy using in-house ads. The cost for advertisement follows a pay-per-click system. The PPC is determined depending on the demand of the ad space. Sellers have the option to set a maximum budget for each day. The ads would stop running when that budget is reached.
Offsite Etsy Ads
The Etsy offsite ads are a new feature for all to use. It is mandatory for all sellers, and the only sellers who are given the option to opt-out who made sales less than $10,000 in a year.
The ads are displayed on platforms like Facebook, Google, Bing, and others. The sale counts if someone clicked on an ad for one of your products and buys products from your online shops.
The fees for these ads can be between 12% and 15%, depending on your sales. For sellers crossing annual sales of $10,000, the fee is 15%, while sellers who make sales below that have to pay 12% advertising fees.
How can you start your online store on Etsy?
After knowing all the associated fees and you are still willing to open an online store with Etsy, you will need the following things.
You would need to create an Etsy account. It can be a standard or a plus account. You can then choose the currency for your shop, the name of the shop, and set up other preferences.
You should have products available to list on your Etsy shop. To make an Etsy listing, you would need product photos, title, and product description.
You need to verify your billing account to confirm your identity and also allow Etsy to charge your fees automatically.
You can use Etsy’s payment processor, or you can choose other payment processors like PayPal and Square. It is also possible to use the mail to receive payments as checks from your customers.
Etsy takes care of the many needs of creative design sellers, but are the fees they charge worth it? Is it better to sell on eBay? Those are answers that you have to find for yourself. We hope that our breakdown of Etsy fees helped you get a clear picture of what you would manage.