How much you actually keep from an Etsy sale

The fees, in plain terms

Etsy takes several cuts from one order, and the main ones are charged on more than the price tag. The ones that apply to nearly every seller:

• Listing fee: $0.20 each time a listing is created or renewed. It is charged whether or not the item sells.
• Transaction fee: 6.5% of the item price plus what you charge for shipping and gift wrapping. Free shipping does not escape this, because the shipping cost is then inside your price.
• Payment processing: varies by country and is charged on the whole order including shipping. For US sellers it is commonly quoted as 3% + $0.25 per order, which is what the example below uses. Check the rate for your own country in Etsy's Payments Policy.
• Offsite Ads fee: 15% or 12%, but only on orders that Etsy's own advertising brought you. More on that below, because it changes the math more than anything else.

Depending on where you live there may also be a regulatory operating fee, VAT on Etsy's fees, or a 2.5% currency conversion fee if you list in a currency other than your payment account's. None of those are in the example.

A worked example: one $40 item, $46 order

Say you sell a handmade item for $40 and charge $6 shipping, so the order total is $46. The postage label costs you $6, materials and packaging cost $10.50, and you value the hour it took to make at $15.

Without Offsite Ads

• Order total (item + shipping)$46.00
• Listing fee− $0.20
• Transaction fee, 6.5% × $46− $2.99
• Processing, 3% × $46 + $0.25− $1.63
• Postage label− $6.00
• Materials and packaging− $10.50
• Your hour, at $15− $15.00
• What you actually earn$9.68

That is a 21% margin on the order. Etsy's standard fees were $4.82, about 10.5% of the order, which already feels like more than "6.5%".

The same order, but it came from an Offsite Ad

• Everything above, before Offsite Ads$9.68
• Offsite Ads fee, 15% × $46− $6.90
• What you actually earn$2.78

Same product, same customer experience, and the profit drops from $9.68 to $2.78, a 6% margin. Etsy's fees together took about 25.5% of the order. You still covered your $15 hour, but only $2.78 is left on top of it, instead of $9.68.

How Offsite Ads actually work

• If a buyer clicks an Etsy-run ad on another site and places an order from your shop within 30 days of that click, the fee applies to that order, and to any other order they place from your shop in that window.
• The rate is 15% if your shop made under $10,000 in sales over the prior 365 days, and 12% once it has made $10,000 or more.
• The fee is capped at $100 per order.
• Below $10,000 you can opt out. Once you cross it, participation is required for the lifetime of the shop, even if sales later drop, and you pay 12%.
• It is charged on the order total, shipping and gift wrapping included. If the buyer's last click before ordering was an Etsy Ads click instead, only the Etsy Ads fee applies.

The fee is charged only when an ad led to the sale, so it hits some orders and not others. That makes it hard to feel in your day-to-day numbers, and it is the reason a shop can look profitable on paper and still end the month short.

What price do you need?

Work backwards. Add up your costs that do not depend on the price (postage, materials, your time, the two fixed amounts of $0.20 and $0.25), then divide by the share of each order that is left after fees and your target profit.

With the example's costs of $31.50, plus $0.45 in fixed fees, and a target of keeping 20% of every order:

• If no order ever came from an Offsite Ad: fees are 9.5% (6.5% + 3%), so the order total needs to be $31.95 ÷ (1 − 0.095 − 0.20) = about $45.32.
• If you want to survive an Offsite Ad order too: fees are 24.5%, so it is $31.95 ÷ (1 − 0.245 − 0.20) = about $57.57, which means an item price near $51.57 with the same $6 shipping.

You do not have to price everything for the worst case. But if you leave Offsite Ads on, know what a sale that came through it leaves you with, and decide on purpose whether that is acceptable.

Mistakes that quietly cost sellers money

1. Counting only the 6.5%. Processing, the listing fee and any Offsite Ads fee are separate deductions.
2. Forgetting that fees apply to shipping. A $6 shipping charge carries about $0.57 of transaction and processing fees before it carries a cent of postage cost.
3. Leaving your own time at zero. A price that only works because you are not paid stops working the first time someone else makes the item.
4. Pricing from last year's figures. Etsy changes its fees, so re-check the policy before you reprice a catalogue.