Why Etsy seller fees aren't as scary as you think: a friendly breakdown

We often hear from potential sellers that Etsy's fees are too high, and that's why they hesitate to set up shop. But before you write off Etsy as too costly, let's dive into what those fees really are and how they compare to running your own online store.

It's 2024 at the time of writing this article, so it's possible some of these fees have changed.

Understanding Etsy's Fees

When selling on Etsy, you pay a few different fees:

1. Listing Fee: Every time you list an item on Etsy, there's a $0.20 fee. Think of it as the cost of renting a tiny piece of Etsy's vast marketplace.

2. Transaction Fee: Etsy charges a 6.5% fee on the sale price, which includes the item cost and any shipping fees.

3. Payment Processing Fee: In the U.S., this is usually 3% plus $0.25 per transaction. It's the fee for processing credit card payments.

What About Selling On Your Own?

If you're selling through your own website, like on Shopify, you'd face similar or even higher costs:

• Shopify Subscription: Depending on the plan, this can range from $29 to $299 per month.
• Credit Card Fees: Typically around 2.9% + $0.30 per transaction.
• Hosting and Domain Costs: Paying for your website's hosting and domain can add up.
• Marketing: bringing your traffic of potential buyers, and convincing them to buy from your own website is a lot of work

As you can see, more of the fees Etsy takes you would pay on your own anyway. With Etsy, you get access to millions of potential buyers without worrying about these extra expenses.

Fee and Profit Examples

Let's break down the fees and profits for selling a $1, $10, and $100 item on Etsy:

$1 Item

• Listing Fee: $0.20
• Transaction Fee: $1 * 6.5% = $0.065
• Payment Processing Fee: $1 * 3% + $0.25 = $0.28
• Total Fees: $0.545
• Profit: $1 - $0.545 = $0.455

$10 Item

• Listing Fee: $0.20
• Transaction Fee: $10 * 6.5% = $0.65
• Payment Processing Fee: $10 * 3% + $0.25 = $0.55
• Total Fees: $1.40
• Profit: $10 - $1.40 = $8.60

$100 Item

• Listing Fee: $0.20
• Transaction Fee: $100 * 6.5% = $6.50
• Payment Processing Fee: $100 * 3% + $0.25 = $3.25
• Total Fees: $9.95
• Profit: $100 - $9.95 = $90.05

The Power of the "Share and Save" Link

Etsy offers a great feature called "Share and Save." When someone buys an item through your "Share and Save" link, Etsy reduces the transaction fee from 6.5% to 4.5%.

Here's why it's awesome:

• More Profit: Lower fees mean more money in your pocket.
• Great for Marketing: Share your "Share and Save" links on social media and in emails to drive traffic directly to your shop.

But how does it affect profits? Let's see how the "Share and Save" link changes things:

$1 Item with "Share and Save"

• Reduced Transaction Fee: $1 * 4.5% = $0.045
• Total Fees: $0.20 + $0.045 + $0.28 = $0.525
• Profit: $1 - $0.525 = $0.475

$10 Item with "Share and Save"

• Reduced Transaction Fee: $10 * 4.5% = $0.45
• Total Fees: $0.20 + $0.45 + $0.55 = $1.20
• Profit: $10 - $1.20 = $8.80

$100 Item with "Share and Save"

• Reduced Transaction Fee: $100 * 4.5% = $4.50
• Total Fees: $0.20 + $4.50 + $3.25 = $7.95
• Profit: $100 - $7.95 = $92.05

Is Selling on Etsy Worth It?

Etsy's fees might seem daunting at first, but when you consider the built-in audience and the convenience of not managing a standalone store, it becomes clear that Etsy is a fantastic platform for many sellers.

Pros of Selling on Etsy:

• Access to millions of buyers worldwide.
• Easy-to-use platform with built-in marketing tools.
• Lower startup costs compared to setting up your own online store.

While Etsy fees do cut into profits, they also provide a robust marketplace and tools that can help you grow your business with less upfront cost and hassle.

And remember: 90% of something (the sales Etsy brings you) is better than 100% of nothing! As a parallel, Apple famously takes 30% of all sales on the App Store, and it is still a great deal thanks to everything you get for that price in terms of infrastructure and potential buyers.

So, is it worth it to sell on Etsy? For many, the answer is a resounding yes! The fees are part of the cost of accessing a global audience and a simplified selling experience. And with the "Share and Save" link, you have a powerful tool to maximize your profits while reaching even more potential customers.

Happy selling! 🎉