Etsy Fees For Sellers: Everything You Need To Know [2021 Guide]
Estimated reading time: 13 minutes, 30 seconds.
If you’re a current or soon-to-be Etsy seller, and you want to find out how Etsy fees work and how much they are, you’re in the right place.
In this guide, we’ll break down all the fees that you can expect to pay as a seller on Etsy this year, how they work, and how to estimate what your costs will be ahead of time.
So, settle in. Because selling online doesn’t come free, and knowing what to expect is critical to protecting your profit margins.
In this guide to understanding Etsy fees, part of the Etsy accounting hub, you’ll find:
Table of Contents
Let’s do it.
Etsy Seller Fees in 2021
No matter your platform, fees are a standard part of business life for ecommerce sellers.
Think of them like your rent.
You don’t have a brick-and-mortar store with a landlord and traditional overheads, but you do occupy a retail space in a buzzing marketplace with an established buyer base. And that space comes with a price tag.
In fact, there has been some controversy over Etsy fees, in particular.
Etsy raised its transaction fees in 2018 from 3.5% to 5%, leading to the potential for sellers to have to pay over 50% more on certain listings.
This wasn’t helped by extra shipping fees, which previously caused a fracas on eBay when the platform made a similar move. Sellers found this harder to swallow than the transaction fee increase.
Then in 2020, Etsy introduced a new advertising model which opted all sellers in, and only some could opt out again.
Sellers would only pay fees if sales were made, but many weren’t happy. For sellers making over $10,000 per annum, they were in - whether they liked it or not.
Now, not all sellers were against the changes. But it’s good to know where you stand as you enter the Etsy marketplace, and to be aware of the discussions already happening around you.
And as for those obligatory advertising fees, we’ll cover those in this guide.
New fees and increases this year
This guide is based on the latest Etsy fee updates, active from June 23rd, 2021.
These may change, so it’s good practice to check in at least once a year.
When comparing the new policy to the previous Etsy fees policy, most fees remain the same and have not increased since the changes mentioned above.
We aim to keep our guides as up-to-date as possible, but it’s best to always check in with Etsy for any new updates.
With that said, let’s crack into breaking down the fees for selling on Etsy and how you can prepare for them.
Your Etsy Fees Breakdown
Etsy’s fee policy lists eight different fee categories, which we’ll explore here. Some apply to all sellers, and some are circumstantial.
Every time you list or renew an item on Etsy, you’ll be charged a listing fee.
Here’s how listing fees work on Etsy:
- You’ll pay 0.20c for a new or renewed listing.
- Listings last four months, after which time, you’ll have to pay to renew them to keep them active.
- You can edit existing listings for free.
- Whether you toggle on auto-renews or renew listings manually, the fee is the same.
- Listing fees are charged regardless of whether a sale is made, apart from in the case of private listings.
- If you list the same item in multiples, you’ll be charged the initial 0.20c fee, and then each time the listing renews after a sale.
- If you list an item on Etsy Pattern, there is no listing fee. Listings are covered by your Pattern subscription fees (more on this later).
- If you have paid to list an item and want to move it to your Pattern store, you won’t be charged to list it again.
Every time you make a sale on Etsy, you’ll be charged a transaction fee. This is a percentage of the total sales value, including shipping and gift wrapping.
Here’s how transaction fees work on Etsy:
- Each completed sale is subject to a 5% transaction fee.
- Shipping and gift wrapping are also subject to this fee.
- This fee will not be applied on top of sales tax unless your listing fee price includes it. The transaction fee is based on 5% of your listing price plus delivery/gift wrapping.
- If you sell somewhere that requires the listing price to include tax, then your transaction fee will include tax by extension.
- Any additional charges you apply for customization are also subject to the final transaction fee.
You have a few options when it comes to advertising your Etsy store and/or listings.
With Etsy ads, you set a budget for promoting your store within the platform itself. With Etsy off-site ads, you only pay fees when sales are made from outside of the platform.
Here’s how Etsy ad fees work:
- You can set up an Etsy advertising campaign from within your dashboard.
- You choose your budget for ad spend on each campaign. Etsy then bids for ad space within its platform on your behalf.
- If categories are particularly busy and popular for advertising, then you may have to spend more to be visible there over your competition.
- Your Etsy ad fees will vary, based on when and where your ads show up - but they will not exceed your set budget.
- Etsy ads are charged on a CPC (cost-per-click) model, so you’ll only pay fees if someone clicks on your ad.
- You can usually see these fees on your dashboard within 24 hours after the fee was incurred.
- Etsy’s marketing policy states that your listing quality and ranking factors may impact your ability to win ad space. See our Etsy SEO guide here to learn how you can improve these.
Here’s how off-site ad fees work on Etsy:
- Etsy buys ad space from off-site partners like Google, Instagram, Facebook and more.
- It automatically promotes all sellers and stores (unless smaller sellers turn this off).
- If a buyer clicks on the ad and completes a sale within 30 days, sellers are charged a fee.
- There is no limit to how many successful ads you can be charged for, but you’ll never be charged more than $100 for one ad.
- The fee is based on your shop’s sales over the last year. This is 15% for smaller sellers and 12% for larger (not including taxes, unless you sell overseas and include these in your listing prices).
- You can only opt out of this program if your store made less than $10,000 USD in the prior 365 day period (you’re a smaller seller).
- For larger sellers over this threshold, you cannot opt out, but your fees are 12% instead.
- Etsy recalculates your eligibility every month, so if you reach a 12th month that pushes you over the $10,000 threshold, it will notify you of this change in status.
“For the purpose of calculating this $10,000 USD threshold, sales are calculated by multiplying item price by quantity (minus any discounts or formally canceled orders), but excluding Pattern orders, In Person Payment orders, Etsy fees, or separately charged postage, taxes, or gift-wrap.”
Sellers that want to grow and establish themselves on the platform can sign up to Etsy Plus, a subscription service that costs $10/month.
Here’s what you pay and what you get with an Etsy Plus subscription:
- Etsy Plus sellers get 15 listing credits and $5 Etsy ad credits each month with their subscription. These do not roll over into the next month.
- You can use a custom domain name, and you may get a discount on it for the first year.
- You can have “sold out” listings with the option for buyers to be alerted when you restock.
- You’ll have more customization options than non-subscription Etsy stores.
- For sellers in the US, Canada, UK, and Europe, you can get discounted custom delivery boxes.
- Etsy Plus sellers can also get 30% off business cards through their partner store, Moo.
- Discounts and perks can be found via: Shop Manager > Settings > Your Subscriptions > Discounts and Perks.
- You can end your subscription at any time, and access will be closed at the end of your current billing cycle. You won’t be refunded subscription fees.
In-person sales fees
For ecommerce sellers that also sell in person, these fees may crop up. By syncing your store with Square, you can quickly and easily process transactions on the spot.
Here’s how in-person sales fees work on Etsy:
- If you have already listed items on Etsy (and paid the listing fee), and then sync them with Square, there doesn’t appear to be a charge for this.
- If, however, you don’t sync a listing, you’ll see a 0.20c transaction fee on your statement called “Square manual”.
- Square transactions are not subject to Etsy’s 5% transaction fee, but they may be subject to Square’s own payment processing fees.
Payment processing fees
Sellers who use Etsy Payments will be subject to payment processing fees. A fee is charged on each transaction processed by Etsy Payments.
Here’s how Etsy Payments processing fees work:
- They vary based on the location of your bank account.
- If funds are under a certain threshold, you may also be charged a fixed deposit fee when Etsy releases the money to your account.
- For example, in the US, the daily disbursement threshold is $25, and the payment processing fee is 3% + 0.25c.
- The processing fee is a percentage of the total amount of the sale including tax and delivery.
- Processing fees are deducted from the sale amount in your payment account, and deposit fees are deducted from your Available Funds.
- If currencies need to be converted, you’ll pay an extra 2.5% currency conversion fee (more on this below).
- You’ll also be charged when processing payments via Etsy gift cards, credits, and coupons.
Sellers in certain locations get the option of printing postage labels and fulfilling their orders through Etsy. These come with extra costs.
Here’s what you pay and what you get when using Etsy delivery services:
- You can buy postage labels through Etsy if you’re a seller based in the US, Canada, UK, Australia, or India.
- The cost of these labels will depend on the delivery carrier, the origin and destination of the consignment, as well as its weight and dimensions.
- You might also add signature confirmation or insurance, which can increase the cost.
- You need to use PayPal or Etsy Payments to take advantage of these delivery services.
Etsy Pattern fees
Etsy Pattern is the platform’s answer to Shopify. Sellers can build their own store separate from, but linked with, Etsy marketplace, and have greater freedom with their customization and branding.
Pattern is a subscription service at $15/month.
Here’s what you pay and what you get with Etsy Pattern:
- There is a 30 day free trial for Etsy Pattern.
- After your first 30 days, you’ll be charged $15/month.
- For US sellers, where applicable, Etsy also charges sales tax on this fee.
- If you buy a custom domain name for your store, this will be subject to separate ongoing charges too.
- You can cancel the subscription at any time, but you’ll have access for the rest of the month in your current billing cycle and cannot be refunded these fees.
- You have greater customization options for your Pattern store, including adding pages like About, Home, Contact, Gallery, Blog, and Events, changing store branding, colors and fonts, custom inventory settings, new marketing resources, review displays, and blogging functionality.
- If you list items on Pattern only, and not your Etsy store, they won’t be subject to listing or transaction fees. They also never expire.
- If you list an item on both Etsy and Pattern, it will be subject to the usual Etsy fees as covered above.
Etsy converts fees from USD to your payment account’s home currency at the current market rate for that time, with the exception of:
- Transaction fees
- Offsite ad fees
- Payment processing fees
- Deposits fees
“If you list your items in a currency other than that of your payment account, the transaction fee and, where applicable, the Offsite Ads fee, on the price you display for each listing plus the amount your charge for postage and gift wrapping will be converted to your payment account currency at the market rate and reflected in your payment account.”
Etsy Payments users are charged 2.5% for currency conversion of a deposit.
Etsy’s recommendation for avoiding these conversion fees is to list your item prices in the same currency used by your payment account.
Buyers still see the item listed in the currency of their choosing, but your backend is consistent and no currency conversions need to take place.
Calculating Your Etsy Fees
Phew, that’s a lot of gritty detail about fees.
It’s tricky to provide definitive amounts for fees because they depend on a number of varying factors.
But that doesn’t mean you can’t estimate and calculate what they might be in advance.
Calculating your Etsy fees ahead of time can help you prepare for best and worst-case scenarios with your accounting.
Etsy fee calculators
You don’t need to remember every detail to estimate your Etsy fees. A calculator can do it for you.
For example, check out this Etsy fees calculator by Salecalc:
By entering your costs into this calculator, you can generate a visual representation of your fees and margins:
Fee calculators can help you price your items knowing that you’ll be left with profit in the end.
How to Manage and Minimize Your Fees
Before you can manage and minimize your fees, you need to know what they are.
Etsy doesn’t always break down every detail about the fees you paid in your settlement statements. You may be sent a bank deposit and need to figure out exactly what income and expense lines are associated with it.
That might be fine for a handful of transactions a day, but as your store grows, so does that time commitment.
And your accounting software isn’t designed to handle thousands of individual transactions either. High transaction volumes can slow it down.
A2X for Etsy solves these problems.
For each bank deposit, A2X calculates every line you need to know and groups them into a journal summary. These summaries keep your accounting software neat, tidy, and working at optimal speed.
It also organizes your books via the accrual method of accounting for more reliable numbers you can use to forecast your business’s month-to-month performance.
Check out how it works here:
Only by understanding exactly which fees you paid, and when, can you spot mistakes, increases, and opportunities for reductions.
Etsy Fee FAQs
Get quick-fire answers to your burning Etsy fee questions right here.
How much does Etsy charge per transaction?
For an Etsy seller without a subscription, each listing is subject to a 0.20c fee, and each transaction is subject to a 5% transaction fee.
There may be additional fees on top depending on whether you advertised the listing, needed to convert currency, the payment method used, and numerous other factors we discuss in this blog.
Are Etsy fees tax deductible?
Yes, they are. Your Etsy fees are a part of your business operation costs, so you should be able to deduct them. Remember to consult an ecommerce accountant for your unique circumstances.
How much are Etsy fees?
There are a few different types of Etsy fees. It costs 0.20c to list an item on Etsy. When an item sells, you are charged 5% of the total cost as a transaction fee. You also pay fees for payment processing, which depend on the method and your location.
You may be charged for currency conversion, for shipping labels, advertising, in-person selling, and any subscriptions you may have like Etsy Plus ($10/month) or Pattern ($15/month).
Can I avoid Etsy fees?
Unless Etsy runs a special offer to wipe certain fees at particular times, no, you can’t avoid Etsy fees. You can manage and reduce them though, depending on what you sell and how. The listing and transaction fees are set, but the other fees you have some control over in whether you opt for the service or not.
How do I reduce my Etsy fees?
The only way you could lower your Etsy fees would be to reduce or consolidate the services you use through Etsy. For example, you may be able to minimize listing fees by opting for an Etsy Pattern or Plus subscription, which come with extra listing benefits.
You’ll need to weigh up what you need from the platform and what you don’t, to see if there are opportunities to save money.
Next in the Series…
This guide is part of the Ecommerce Accounting Hub, Etsy series.
Next up, we talk taxes. From income tax to sales tax, VAT and beyond, everything you need to know about your obligations is right here.
See you soon!