The True Cost of an Etsy Shop in 2023
Are you considering opening an Etsy shop but are worried about the costs? This blog post will discuss the cost of an Etsy shop in 2023. After reading this post, you’ll better understand the costs associated with running an Etsy shop so that you can make an informed decision about whether or not it’s right for you. Thanks for reading!
Why is Etsy Popular?
Etsy has become incredibly popular in recent years, and that popularity is easy to understand. It provides an easy way for crafters to reach a targeted audience of customers who are already excited about handmade goods. It also allows users to build brand awareness through custom shops and listings. Etsy enables sellers to craft everything from individual items to full brands, making staying relevant with their customers easy. Additionally, the costs associated with an Etsy shop aren’t as steep as those involved with other e-commerce solutions, further adding to its appeal.
The Benefits of an Etsy Shop
Putting yourself out there may sound daunting initially, but getting started is easy with Etsy. Having an Etsy shop can bring many benefits to aspiring entrepreneurs. From low overhead and low initial costs (both financially and in terms of time spent setting up the shop) to access potential customers, Etsy provides a platform for starting your own business with minimal risk. And when business picks up, you’ll be happy you took the plunge into turning your creativity into a success!
One of the things that attracted me to Etsy as a seller is that I knew my target audience was already there. Many folks shop for goods on Etsy for specific reasons. They’re looking for handmade products and things made by individuals, either one at a time or in small quantities. While Etsy has opened its gates to allow larger mass-market sellers to set up shop, Etsy is still the de facto home for handmade products.
Are you looking for inspiration for a new Etsy shop or considering starting your first? Digital products are highly profitable because of their vast margins; make a single product and sell it dozens or hundreds of times! I’ve put together 165 different ideas for selling digital products on Etsy.
The Types of Products Sold on Etsy
Etsy is a popular online marketplace for handmade goods, featuring various items from clothing to jewelry and everything in between. Many shoppers often overlook handmade items such as handmade soaps, candles, or even wood items. Still, these items can be made inexpensively and offer great opportunities for anyone considering launching an Etsy shop. Additionally, digital products such as printables, illustrations, and designs also hold their unique appeal on the platform.
Doing the Math to Find The True Cost of an Etsy Shop
One of the things that confused me at first when I started selling on Etsy was how much it would cost. Unlike Amazon, which has a $39.99/month fee, Etsy fees are categorical and depend a lot on the product and how many you’re selling.
Below I’ve broken down the categories of Etsy fees and how much you should expect to spend. In the end, I’ll give a couple of examples of products and their total Etsy fees to provide you with an idea of how you should price your products for your business to remain profitable.
Etsy Listing Fees
Starting with the basics, listing an item on Etsy is $0.20. This Etsy fee covers a single thing for sale (not a single unit of that item) as long as that item is in stock, for up to four months. After four months, the listing renews, and you are charged another $0.20.
For Example: if you list 15 unique items for sale simultaneously, Etsy will charge 15 x $0.20 or $3.00 in total listing fees. Etsy will charge $3.00 every four months if you keep selling those items indefinitely.
If you sell out an item and then create new stock, Etsy will bill another $0.20.
If your listing has multiple quantities, Etsy will charge $0.20 when you initially create the listing. For each item(s) you sell, Etsy will charge an additional $0.20 per item after the sale.
For Example: if you have 15 of an item for sale and sell eight, you’ll receive a $0.20 charge upfront and 7 x $0.20 or $1.40 for the additional seven units that sell.
Listing fees appear individually on your account as needed to reflect the times they’re charged.
Etsy Transaction Fees
Etsy charges a flat 6.5% transaction fee on the total cost of the item to the buyer. In other words, Etsy bases the transaction fee on the item’s sale price, plus shipping (if applicable) plus gift wrap (if applicable).
There are no exceptions or deviations from this fee. It will appear as its line item on your account.
For Example: if you sell a $29.00 candle and charge $9.00 for shipping, The Etsy Transaction fee will be 6.5% of $38.00, or $2.47.
Etsy Payment Processing Fees
The Payment Processing Fees Etsy charges are akin to credit card processing fees charged by other e-commerce platforms and generally represent the cost of taking credit and debit card payments.
The Payment Processing Fee is in addition to the Transaction Fee and varies by country based on the location of your bank account. In other words, if you’re a seller in the United States, regardless if you sell to someone in the United States, Canada, England, or South Africa, the Payment Processing Fee remains the same and is the United States Rate.
For Example: if you’re a United States seller and sell a $29.00 candle and charge $9.00 for shipping, The Etsy Payment Processing fee will be 3% of $38.00 + $0.25, or $1.39.
Etsy Payment Processing Fees by Country
Here are the Etsy Payment Processing fees for each country:
|Country||Etsy Transaction Fee (percentage + flat fee)|
|Australia (domestic orders)||3% + 0.25 AUD|
|Australia (international orders)||4% + 0.25 AUD|
|Austria||4% + 0.30 EUR|
|Belgium||4% + 0.30 EUR|
|Bulgaria||4% + 0.30 EUR|
|Canada (domestic orders or orders from the US)||3% + 0.25 CAD|
|Canada (international orders)||4% + 0.25 CAD|
|Croatia||4% + 0.30 EUR|
|Cyprus||4% + 0.30 EUR|
|Czech Republic||4% + 0.30 EUR|
|Denmark||4% + 2.50 DKK|
|Estonia||4% + 0.30 EUR|
|Finland||4% + 0.30 EUR|
|France||4% + 0.30 EUR|
|Germany||4% + 0.30 EUR|
|Greece||4% + 0.30 EUR|
|Hong Kong||4.4% + 2.00 HKD|
|Hungary||4% + 0.30 EUR|
|Indonesia||4.5% + 7000 IDR|
|Ireland||4% + 0.30 EUR|
|Israel||4.5% + 2 ILS|
|Italy||4% + 0.30 EUR|
|Latvia||4% + 0.30 EUR|
|Lithuania||4% + 0.30 EUR|
|Luxembourg||4% + 0.30 EUR|
|Malaysia||4.5% + 2 MYR|
|Malta||4% + 0.30 EUR|
|Mexico||4.5% + 10 MXN|
|Morocco||4.5% + 5 MAD|
|Netherlands||4% + 0.30 EUR|
|New Zealand (domestic orders)||3% + 0.30 NZD|
|New Zealand (international orders)||4% + 0.30 NZD|
|Norway||4% + 2.50 NOK|
|Philippines||4.5% + 25 PHP|
|Poland||4% + 0.30 EUR|
|Portugal||4% + 0.30 EUR|
|Romania||4% + 0.30 EUR|
|Singapore||4.4% + 0.35 SGD|
|Slovakia||4% + 0.30 EUR|
|Slovenia||4% + 0.30 EUR|
|South Africa||4.5% + 8 ZAR|
|Spain||4% + 0.30 EUR|
|Sweden||4% + 3.00 SEK|
|Switzerland||4% + 0.50 CHF|
|Turkey||6.5% + 3 TRY|
|United Kingdom||4% + 0.20 GBP|
|United States||3% + 0.25 USD|
|Vietnam||4.5% + 11500 VND|
The above table is current as of February 20, 2023. You can find the most recent table of rates here.
Etsy Advertising Costs
While all of the Etsy fees listed so far are required, advertising costs are optional. It varies greatly depending on several factors, including the type of product, the product’s price, the product’s intended market, your advertising budget, and more.
The cost of an Etsy ad will also vary, so it’s hard to make a specific statement about how much advertising will cost.
Based on cursory research and reviewing my historical ad spending on Etsy for 2022, I spent $374.81 on ads, resulting in 1,126 clicks ($0.33/click). Those 1,126 clicks turned into $805 in revenue. The return on my advertising spend was 2.14x, meaning for every $1 I spent on ads, I earned $2.14 from those ads. (These numbers do not count revenue earned from search or other means.)
However, the cost-to-revenue ratio for Etsy ads skews toward the holidays. For January 2023, I spent $36.75 on ads that earned $15 in revenue. For every $2.45 I spent on ads, I made $1 in revenue.
Etsy Listing Creation and Photo Costs
Another variable and potentially optional cost, the amount of money spent on the listing itself, plays an important role. If you create the listing and take the photos yourself, the only cost for each listing is your time. You may be looking at an additional charge if you still need a camera.
My favorite camera for taking Etsy listing photos is the Canon M50 Mark II. It’s an incredibly versatile camera that travels well and creates great images. The included lens is of good quality, too, making it a great purchase.
Alternatively, hiring someone to take photos of your products or write your listing is an option some sellers take. Many folks on Fiverr create high-quality listings using all the right keywords to land them at the top of Etsy search results.
The downside to having someone create a listing for you is the cost. You’ll spend more money upfront to publicize your products if you have many listings. The flip side is you’ll only be spending this money once, and a quality listing pays for itself relatively quickly.
I’ve used Fiverr to have folks who are way better at writing catchy listings than I do mine, and they turned out well. I paid roughly $10 per listing. That’s a worthwhile expense.
Email, Domain Name, Branding
Once your store is live, and you have a following, something to think about is how customers can get in touch with you outside of Etsy and if you have plans on expanding your business off the platform.
Having a domain name, email address, and website are crucial components of that stage in your business growth. While none of this is necessary, I recommend having at least an email address to make communicating with customers easier.
Several of my largest customers do business with me entirely via email. I send them information, pricing, and invoices, and we work out specific details of their orders. To that end, I also have a custom domain name for my email address. I recommend Hover for domain names (the link includes a $2 discount) and Fastmail for email.
Example: A domain name on Hover runs about $14.99 per year for a .com ($12.99 with this link). A Fastmail email account that uses your custom domain is $5 per month or $50 per year ($4.50 per month or $45 per year with this link).
The amount of money you spend on branding is also up to you. Depending on what kinds of products you’re selling on Etsy, you may have already developed a brand by creating a label, printed material, thank you notes, etc. Usually, a logo is good enough to get started, and you can get logos made for your Etsy shop and business on Fiverr.
How Much is Your Time Worth?
Finally, remember the costs associated with your time. Etsy sellers commonly report spending several hours daily on their businesses, from responding to customer inquiries and managing orders to marketing, product photography, and more.
Whether you value your time by the hour or not, it’s essential to factor in how much of your labor goes into running your business.
If you’re trying to think of a baseline to measure the amount of time spent in dollars, start with the minimum wage in your area. Where I live, the minimum wage is almost $16 per hour. When Factoring in the cost of the candles I make, I calculate how long it takes me to make a batch of candles, divide that by the number of candles, and multiply that by the minimum wage.
Example: I usually spend about 3 hours making two batches of 12 candles each, 24 in total, including set up and clean up. That’s about 7.5 minutes per candle or 0.125 hours. I add $2 in time to the cost of each candle I make to account for my time. 0.125 x $16 is $2.
Example Etsy Product Selling Costs
I’ve compiled two examples of products and their costs to sell them on Etsy. Both models include shipping in the price. I’ve included all the above Etsy fees and an average $0.35 advertising fee to represent the product sold through an ad. Example products are sold in the United States.
Example 1: A $20 custom wood keychain.
- Etsy Listing Fee: $0.20
- Etsy Transaction Fee (6.5%): $1.30
- Etsy Payment Processing Fee (3% + $0.25): $0.85
- Advertising (varies): $0.35
Total Etsy fees for a $20 item: $2.70 (13.5%), or $17.65 (11.75%) without advertising.
Example 2: An $80 leather bag.
- Etsy Listing Fee: $0.20
- Etsy Transaction Fee (6.5%): $5.20
- Etsy Payment Processing Fee (3% + $0.25): $2.65
- Advertising (varies): $0.35
Total Etsy fees for an $80 item: $8.40 (10.5%), or $8.05 (10.01%) without advertising.
After accounting for the various Etsy fees, the cost of selling a product on Etsy is about 10 to 13% of the item’s final price to the customer. After factoring in advertising, photo costs, branding, and the cost of your time, it’s easy to see how important it is to factor in these costs when pricing your products accurately.
By understanding the various fees associated with selling on Etsy and adequately budgeting for them, you can ensure that you can successfully manage your store without compromising profits.
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