When I launched my first store, I had no idea how much Etsy charges sellers to post listings and sell their products. I started creating products, adding them to the store, and waiting for the magic to happen.
Needless to say, not much happened right away.
I had basically no sales for the first month and was getting charged for my listings. While the fee seemed nominal, I had to consider cost in the long run if I were to list dozens of products, especially since I was not making any sales in the beginning.
In this article, I break down how much it costs to sell on Etsy so you can be prepared.
How much does an Etsy listing cost?
Etsy charges $0.20 per listing for four months. Even though it is free to open a shop, you will be charged for each listing you have on Etsy.
A listing is different than a product because a listing can contain more than one product. For example, if you’re selling a tote bag design available in three different color schemes, you will only need one listing for it, but your customers will have the option of choosing from one of the available colors. If you have 100 items of the listing in stock, you will only create one listing regardless of the quantity in stock.
Every four months, your listings will expire. Your listing with auto-renew, unless you decide to renew them manually. Each time it renews, it will cost $0.20 for each listing you have.
While enabling auto-renew makes sense, it’s better to leave them all to manual renew when you have a new store. This allows you to evaluate the selling performance of your products before choosing to renew the listing for another four more months.
Remember, the $0.20 applies per listing, so if you have 200 listings, for example, the amount to be renewed every four months is $40. If you’re not making any sales, $40 per month will quickly add up to your list of expenses.
How Etsy Listing Fees Work
The way Etsy’s listing fees are charged can be confusing, so it is crucial to understand the details.
One important thing to know is that the $0.20 fee for listings also depends on the quantity in stock for the listing. This means that the number of items in stock is a factor in determining when the listing will renew at a $0.20 fee. Let’s go over some examples to clarify how it works.
You have a handmade jewelry store on Etsy and create one listing for each piece of jewelry. Since each piece of your jewelry is unique, you only stock 1 of each product. Once an item is sold, you don’t renew the listing since the product was unique. You will pay $0.20 to list that item. Once that item is sold, your listing expires and you are no longer charged for the listing (you will have other fees, which we will mention later).
You create hand-knitted mittens available in three different colors. All the mittens are the same, other than the difference in color, so you only need to create one listing for this product. You knit six mittens and put them up for sale under this single listing. It will cost you $0.20 to create this listing, which will remain active for four months. If you have no sales over that period, you will be charged $0.20 at the end of the four months if you decide to renew the listing.
However, if you sell one of these items, your listing will be automatically renewed for $0.20 listing the remaining five items. If you decide to update the quantity in stock or add new pictures, you can edit your listing at no additional cost. Every time you make a sale, the listing renews until you are out of stock or the four months expire without making any more new sales.
If someone buys three pairs from you in one transaction, you will be charged a total of $0.60. Even though the customer purchased these items in the same order, Etsy still charges the $0.20 fee for each product sold.
Other Etsy Fees to Be Aware Of
Besides the listing fees, you are going to be charged a transaction fee of 5% of the total item cost whenever you make a sale. This fee also applies to shipping charges applied to the customer’s order.
Additionally, if you chose to promote your products on Etsy, you will incur additional fees. These fees will be added to your bill at the end of the month. It can be difficult to stand out on Etsy when you’re launching a new store, so the investment may be worth it.
Depending on where you live, there might also be taxes that you will need to pay.
If you’re converting your sales into currencies other than the US dollar, you will also be charged the cost of your currency conversion.
If you’re using Etsy Payments, there is a payment processing fee that is dependent on the location of the linked bank account.
What about Etsy shipping costs?
Usually, the shipping cost is paid by the buyer. You should clearly list the shipping fee according to the country of destination in your listing (don’t worry, there will be a field for it).
You should be careful to avoid miscalculating the shipping fee so you do not pay more for shipping than what you charged the customer. Over time, this will have a noticeable effect on your profitability. Also, if you’re adding insurance to the shipping, your costs will increase.
You should be familiar with how much it will cost to ship your items to various destinations.
Why is it important to become familiar with Etsy’s fees?
While the $0.20 may seem very minimal at first, the total cost may quickly add up if you’re not paying attention. You should have a clear understanding of all the fees that will incur when you list your products (and especially when you start making sales).
Most importantly, you should have these fees in mind when deciding how to price your products. Although you already have manufacturing costs Etsy’s fees should also be factored into the price to ensure profitability. If your items are underpriced, you may not be able to sustain your business!
Online doesn’t mean free
Although it is cheaper to launch an online store when compared to a traditional “brick and mortar” store, the fundamental business principles remain the same. Fees, charges, and bills can quickly add up and affect the profitability of your business.
This not only applies to Etsy, but any type of e-commerce platform! Whether you’re on Etsy, Amazon, or your own platform, you should become very familiar with all the costs associated with managing and running your store.
You should create a spreadsheet using Microsoft Excel or Google Sheets to keep track of your products and expenses. As with any business, you must always have an up-to-date overview of your store’s operations and finances.
Remember, if a product is costing you more than the money it is making, consider scrapping it (even if you think that product is the best thing you have ever created!).
Your end goal is to run a profitable store. You want to make sure your store is capable of earning a profit before you rack up hundreds in expenses every month.
What should I do from here?
Mistakes are an essential part of starting an online business, especially in the early stages. These mistakes help you learn, which is very beneficial in the long run. As you continue running your Etsy store, you’ll learn how to work Etsy’s fees into your pricing model so you can become profitable. Sometimes businesses are not successful until a few months have gone by, or even a whole year! It will take lots of time and effort before your Etsy shop becomes your main source of income.
You should use your mistakes as learning opportunities, keep testing various prices for your products, adjust your shipping costs, and make your product clear and understandable to the buyer. If an item has not been selling for months or is getting really bad reviews, it may not be worth it to keep paying for the listing renewal fees.
Launching an online store can be a rollercoaster. Your sales will vary month-to-month and you may even have periods of no sales. It is extremely difficult to predict which of your products will become a hit and which ones will be a disaster. Failure is inevitable in business and there may be days where you will want to give up on the entire idea because you aren’t making sales. Don’t give up and be persistent. Have a clear strategy and goals and always keep track of your balance sheet.
Treat your online store like you would any type of business: understand your customers, your expenses, your income, and your target market. Doing this will help lead you to success. Simply creating a store, listing a few items, and running ads are not enough to create a solid, profitable business. If it were that easy, everyone would be rolling in money and traveling the world!