How much does it cost to start an Etsy shop in 2024?
Having a storefront on Etsy is completely free. However, you will be paying three major Etsy seller fees if you want to sell something on this marketplace. Such selling charges include:
Beyond these Etsy selling costs, you may have to pay for:
- Etsy payment processing fee;
- Etsy ads fee;
- In-person selling fees;
- Etsy shipping fees;
- Pattern fees;
- Currency conversion;
- Taxes.
That’s how much it costs to start an Etsy shop. Yet, the amount charged to you will depend on your sales volumes, selling region, advertising frequencies, and more.
Keep scrolling and start breaking down these fees together so that you have a complete outlook on Etsy selling fees now!
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Etsy Seller Fees – How Much Does it Cost to Start an Etsy Shop?
When you learn to start selling on Etsy, you might wonder about the fees that you need to pay to sell on this biggest marketplace. Overall, you can start an Etsy shop for FREE and get 40 free Etsy listings, but the marketplace will charge some fees, which will be discussed below.
1. Etsy listing fee
Regarding how much does it cost to list on Etsy, each time you add a new set of products or create a new listing, Etsy will charge you 20 cents as a listing fee.
There are 2 kinds of Etsy pricing for listing:
- Auto-renew sold fees
This is a renewal fee for your listing every 4 months. It means each time an item is purchased from your store, Etsy will automatically send you a request to repost your listing. If you set up the auto-renew for your listing status, you can save time manually reposting products. It will cost 20 cents for each new listing.
- Multi-quantity listing fee
If a customer buys an additional item from a single listing that consists of multiple item variations, you will still be charged the standard $0.20 for each item bought. You can learn more about multi-quantity listing fees in Etsy help center.
Note:
2. Subscription fee
Another Etsy store cost is the monthly fee you may pay for the marketplace. You can choose between two packages:
- Etsy Standard: This is the default plan which is free for everyone.
- Etsy Plus: USD $10/month.
However, one thing to note is that your payment account will be added the subscription fees on the same day every month. This is called as Auto-renew feature on Etsy.
For example, if you are selling on Etsy USA and you sign up on March 3rd, you will need to pay a subscription fee automatically on April 3rd, May 3rd, and so on.
For newbies who are finding out how much does it cost to start an Etsy shop, the standard tier will be the best option. By choosing this free plan, new sellers can save more money and explore the marketplace before investing more.
3. Etsy transaction fee
Another fee that you will see a lot when getting Etsy daily bills – Etsy transaction fee. This fee is charged whenever you make a transaction.
Transaction fee basics:
- Etsy takes 6.5% of the total cost for each product.
- The fee amount is posted automatically to your payment account.
Note: The transaction fee will not apply to sales tax if you sell from the US. On the other hand, if you sell from anywhere other than the US, the transaction fee will apply to the listing price (which should include any applicable taxes that you as a seller are responsible for), shipping price, and gift wrapping fee.
4. Etsy payment processing fee
Talking about how much it costs to start an Etsy shop, the fee for payment processing is also important. Payment processing is the way Etsy and other top marketplaces pay sellers. Etsy payment processing fee usually costs 3% + $0.25 and lets you accept payment from your buyers by the following payment options:
- Credit cards
- Debit/bank cards
- PayPal
- Etsy Gift Cards and Etsy Credits
- Apple Pay
- Google Play
- iDEAL (the Netherlands)
- Sofort (Austria and Germany)
- Klarna Invoice payments (Germany)
Payment processing fees will be different depending on your country. The fees are taken from the item’s total sale price, including its shipping fees, and any applicable sales tax.
For example, if your bank account is in the USA, you will be charged: 3% + $0.25 USD.
These fees will be applied if you choose Etsy payment as your payment method. When an order is placed, the processing fees appear in your payment account as a deposit for payment processing. They are also added to Etsy’s transaction fees.
5. Promotional and Etsy Ads fees
Etsy offers multiple services to help you advertise your listings and promote your shop, including Etsy Ads and Offsite Ads.
The cost of Etsy Ads depends on the daily budget you set, the number of clicks and views your ads receive, and how much competition there is for the keywords you’re targeting. You can set a budget as low as $1 per day and choose to pay per click or per impression.
Offsite Ads are a type of advertising that promotes your products on other websites and social media platforms, driving traffic to your Etsy shop. You’ll only pay for Offsite Ads when you make a sale from a click generated by an Offsite Ad. The Offsite Ad fee depends on your shop’s sales in the last 12 months:
- If your Etsy shop made less than $10,000 USD, you’ll be charged a 15% fee for an order attributed to an Offsite Ad on the amount you made from your sale before the advertising fee was applied.
- If your Etsy shop made at least $10,000 USD, you’ll get a discounted fee of 12%.
By advertising on Etsy you can increase your chance to attract more customers on this marketplace and generate more sales.
6. In-Person selling fees
In-person selling fees are Etsy selling fees that are charged when sellers use the Square reader to process payments for in-person sales. If sellers choose to sync their Etsy listings with Square, listings with multiple quantities will be charged the same $0.20 renewal fee as listings with multiple quantities on Etsy.
Non-synced listings will be charged a $0.20 transaction fee, which will appear on the seller’s payment account as a Square manual fee. These fees are deducted from the seller’s current balance and reflected in their payment account.
In-person sales processed with the Square reader will not be subject to Etsy’s 6.5% transaction fee or any Etsy payment processing fees, but will be subject to Square’s Payment Processing Fees.
7. Etsy shipping fees
Regarding how much Etsy takes for the shipping service, these fees will not be fixed but depend on many factors. Overall, when running an Etsy store, sellers might pay an amount for shipping, including:
- Shipping labels: The cost of the shipping label will depend on the shipping carrier, and the origin, destination, weight, and dimensions of the package.
- Signature confirmation or insurance: If you add signature confirmation or insurance, those fees will be added to the total cost of the label at the point of purchase.
You must accept Etsy Payments or PayPal as payment methods to purchase shipping labels through Etsy. Shipping fees and any adjustments are reflected in your payment account and deducted from your current balance.
8. Pattern fees
When you start an Etsy shop, e-sellers can also consider designing their own selling site with Etsy Patterns. Sharing the same ecosystem, Pattern by Etsy was first launched in 2016. Simply stated, artisans who sell online can design their own website with this Etsy website builder.
Pattern by Etsy is a subscription-based service, and its pricing starts at $15 per month. It also offers an annual billing option that can save users up to 20% on their total fees.
In addition, sellers might pay annually for the customized domain. Otherwise, the default domain will be yourshopname.patternbyetsy.com. For example, if you want the .com domain, you might need to pay $13.00, and the most expensive one is around $98.
The pattern does not charge sellers if they only list on Pattern. However, if you want to list on both the Etsy marketplace and Pattern, you will have to pay $0.20 at first for the listing fee, then it might change based on your chosen services.
The platform also provides users with a free trial period of 30 days, giving them a chance to try out the service before committing to a paid plan. Moreover, you can cancel the subscription at any time.
9. Currency conversion
If it is not your bank account’s currency, you must pay a 2.5% extra fee for the currency conversion for depositing that money.
Nonetheless, Etsy payments users in Bulgaria, Czech Republic, Hungary, Croatia, Romania and Poland will have all fees deducted from their payment account in their designated currency, the Euro.
To better understand how much does it cost to start an Etsy shop, in the next part you will learn how to calculate the total fees.
10. Etsy taxes
Here is another part of our breakdown on “How much does it cost to start an Etsy shop” – Etsy taxes.
According to the house rules, you will be responsible for collecting taxes for each item you sell to a shopper residing in the US. More about this, Etsy will collect these taxes on your behalf from the buyers. This means you may have to add a small sum to your product pricing.
If you sell in Canada, there could be more tax regulations for your products, such as the GST (Goods and Service Tax), HST (Harmonized Sales Tax, and Provincial Sales Tax). In case you sell internationally, more tax duties will come your way, and we highly suggest you comply with regional laws.
There is also a note about VAT (Value Added Tax). Etsy will charge you this based on your selling locations.
How to Calculate My Etsy Seller Fees?
1. The formula to calculate the seller fees on Etsy
To calculate your Etsy cost to sell, use the following formula:
Etsy Fees = Listing Fees + Transaction Fees + Payment Processing Fees + Shipping Fees + Optional Fees ( Etsy Ads Fees, In-Person Selling Fees, or Pattern Fees)
Remember that Etsy’s fees can change over time, so always double-check the fees on the official Etsy website to ensure that you are up-to-date on the latest information.
2. Examples of the cost for selling on Etsy
Here is an example of the total cost of selling on Etsy:
For instance, you’re selling a hand-made teacup for the price of $10.
- Listing Fee: To list this cup, the listing will cost you 20 cents. It depends on whether the customer bought more than one item or not. Let’s say they just bought 10 cups, then it’ll be $2.2 ($0.2 + $0.2*10).
- Shipping Fee: There is no free shipping and when the customer buys the cup, there’ll be a shipping fee as well. So, 5% of $10*10 equals $5.
- Transaction Fee: The transaction fee is 6.5% of the total cost of the item for the customer. So, 5% of $10*10 is $5
- Payment Processing Fee: (only if you use Etsy Payment): If you live in the US, then the fee will be 3% of the total sales plus $0.25*10 will be $5.5.
- The total you need to pay Etsy: $2.2 + $6.5 + $5.5 = $12.7
At the end of the day, you sell 10 cups for $100, and Etsy’s share is $12.7.
If you want to calculate your Etsy fees quickly, look out for the Etsy fee calculators available online. Some calculators even have the functionality to estimate your profits.
How to Pay My Etsy Fees?
Now that you understand the fees associated with starting an Etsy shop, you may be wondering how to pay these fees. It is worth noticing that If a seller fails to pay their Etsy fees, their account may be suspended or terminated. Additionally, Etsy may take legal action to recover any outstanding fees.
Therefore, as an Etsy seller, you should keep track of your fees and pay them on time to avoid negative consequences. Here are some steps for you to pay the fees:
- From Dashboard, choose Finance then go to the Payment account on your Etsy Shop manager.
- Select Pay now under Amount due.
- Select the amount you’d like to pay and choose the payment method.
- Select Submit Payment.
If above fees make you questioning “Is selling on Etsy worth it?” let’s move to the next part to see how you can reduce them.
What are The Strategies to Reduce Etsy Seller Fees?
You’ve just gone through how much does it cost to start an Etsy shop. Although there are many fees, you can implement some strategies to reduce them and maximize your profits, such as:
- Apply flat-rate shipping
- Offer free shipping
- Bundle your products
- Offer private listings
- Create variations
1. Apply flat rate shipping on your shop
Flat rate shipping is a method to standardize shipping prices and eliminate the vast ranges due to possible factors like weight, shipment distance, and seasonal spikes. Thus, flat-rate delivery is an excellent option for Etsy sellers who want to streamline their delivery processes and attract customers.
When opening an Etsy shop, you can follow these steps to apply a flat-rate:
- Determine your flat rate: Decide on a flat rate that you will charge for shipping all of your items. This rate should be based on the average cost of shipping your items.
- Create shipping profiles: Go to the Shipping settings section and create a new shipping profile. Select Flat rate as your shipping type and enter the flat rate you have decided on.
- Apply shipping profiles to your listings: Edit each of your listings and apply the appropriate shipping profile. Make sure to select the flat rate shipping profile you just created.
2. Offer free shipping for your customer
Other tactics to reduce Etsy cost to sell and generate more sales is offer free shipping. It’s because everyone loves free shipping and Etsy prioritizes shops that offer free and discounted shipping cause it brings benefits to Etsy’s customers.
It seems effortless to offer free shipping to buyers. However, if you fail to manage, you will not be able to earn more sales and effectively attract buyers. There are two approaches that you should take a look at.
Initially, you’re going to be the one who pays for the shipping. It’s a small investment but brings quite a large benefit to your customer service and attracts them more. Hence, you should implement this for a short time at the beginning of your campaign. After that, offer free shipping only on orders over a certain amount, such as $50 or $100. This can encourage customers to purchase more items from your shop to receive free shipping, which can help increase your sales and profits.
Another way to offer free shipping on Etsy without decreasing your profit is adding the shipping cost into the item’s price. For example, if you normally sell an item for $20 and shipping costs $5, you could increase the price of the item to $25 and offer free shipping. The customer will still pay $25 in total.
3. Bundle your items when listing on Etsy
When it comes to how much it costs to start an Etsy shop, the listing fee is the amount that takes a large portion of the total cost. However, you can reduce this by bundling items.
If you have items that sell in multiple quantities, such as party cups, colorful boxes, clothes… Instead of listing them individually, try to group them together and list them as a bundle product. This way, you only need to pay the listing fee (20 cents) for one bundle product while selling the same quantity as an individual listing. It’s super easy to do and helps to cut off the listing expense.
4. Offer private listings when it is possible
One more tip to save money with the Etsy listing fee is offering your customers a private listing. For the private listing, Etsy only charges $0.20 only if the item sells. If it doesn’t sell, you don’t get charged. Hence, when customers contact you to place orders, consider using the private listing for them. This way, you could save a $0.20 listing fee per item.
5. Create variations
If you have a product that can be customized in different colors, sizes, or styles, you can save money on listing fees by creating product variations instead of separate listings for each option. Etsy charges a fee of 5 cents for each additional variation, which is much cheaper than creating a new listing for each option.
By following these strategies, you can reduce your costs and maximize your profits when selling on Etsy. Further than understanding the cost to sell on Etsy, you can also leverage many Etsy tips to build a 6-figure business.
How Much Does it Cost to Start an Etsy Shop – FAQs
To know how much to sell on Etsy, you can use the following formula: Etsy Fees = Listing Fees + Transaction Fees + Payment Processing Fees + Shipping Fees + Optional Fees (Etsy Ads Fees, In-Person Selling Fees, or Pattern Fees) Here is a breakdown of each fee: It’s important to note that Etsy’s fees can change over time, so it’s always a good idea to double-check the fees on the official Etsy website to ensure that you have the most up-to-date information. There is no monthly fee to have an Etsy shop, but you can choose to pay a $10 monthly subscription for Etsy Plus. This Etsy Plus offers credits for listing and advertising, custom web address discounts, restock requests, advanced shop customization, and more. When you make a sale through Etsy.com, you will be charged a transaction fee of 6.5% of the price you display for each listing plus the amount. This fee covers the cost of using Etsy’s platform to sell your products and is automatically deducted from the payment you receive from the buyer. Etsy takes a transaction fee of 6.5% of the price you display for each listing plus the amount. This fee covers the cost of using Etsy’s platform to sell your products and is automatically deducted from the payment you receive from the buyer.
Final Words
That’s everything you need to know to answer “How much does it cost to start an Etsy shop?”.
In summary, Etsy pricing is quite competitive, and it’s quite cheap to maintain a store. The only thing that is not so affordable is shipping transaction fees. High shipping costs can be a big turn-off for customers.
Going multichannel is also a really great way to increase your revenue. You can sell not only on Etsy but also in other marketplaces such as Amazon, eBay, or Facebook. Multichannel selling will be a wonderful way to reach more customers and level up your business.
In case you need a multichannel selling tool to manage different best selling platforms more effectively, take a look at LitCommerce – we provide a solution to simplify daily management tasks, and you can control your store in just one place.
Leave us a message if you need more info.
Good luck!
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