Understanding Etsy Seller Fees
Selling on Etsy involves multiple fee categories that can significantly impact your profit margins. This comprehensive calculator helps you understand exactly how much Etsy takes from each sale and what your true profit will be after accounting for all costs.
The True Cost of Selling on Etsy
Many new Etsy sellers are surprised to learn that Etsy fees can total 15-25% or more of each sale, depending on various factors. Understanding these fees is crucial for pricing your products correctly and maintaining healthy profit margins.
| Fee Type | Amount | Applied To |
|---|---|---|
| Listing Fee | $0.20 | Per item listed (renewed every 4 months or sale) |
| Transaction Fee | 6.5% | Total sale price including shipping |
| Payment Processing | 3% + $0.25 | Total transaction amount |
| Offsite Ads (Optional) | 12-15% | Sales from Etsy advertising |
| Currency Conversion | 2.5% | International transactions |
Why Accurate Fee Calculation Matters
Without understanding your true costs, you risk:
- Underpricing products - Leading to losses or unsustainably thin margins
- Cash flow surprises - Unexpected fee deductions from your payment account
- Tax miscalculations - Incorrect profit reporting to the IRS
- Business failure - Many Etsy shops close due to poor pricing strategy
Successful Etsy sellers typically aim for a 40-60% profit margin after ALL fees and costs to ensure sustainable business growth and provide buffer for unexpected expenses or promotions.
What This Calculator Includes
Our Etsy Fee Calculator provides comprehensive analysis of:
- All standard Etsy fees (listing, transaction, payment processing)
- Offsite Ads fees for attributed sales
- Shipping label costs through Etsy
- Currency conversion fees for international sellers
- Cost of goods sold (materials and labor)
- Packaging and handling costs
- True profit margin calculations
- Break-even analysis per item
How Etsy Fees Work
Etsy's fee structure is multi-layered, with different fees applying at different stages of a transaction. Understanding when and how each fee is applied helps you anticipate costs and price accordingly.
Step 1: Listing Your Item ($0.20)
When you create a listing on Etsy, you're charged a $0.20 listing fee. This fee covers the listing for four months or until the item sells, whichever comes first. Key points about listing fees:
- Fee is charged immediately when you publish a listing
- Auto-renewal charges another $0.20 when the listing expires
- Multi-quantity listings charge $0.20 per unit sold
- Deactivated listings can be relisted for another $0.20
- Private listings still incur the listing fee
Step 2: Making a Sale (6.5% Transaction Fee)
When your item sells, Etsy charges a 6.5% transaction fee. This fee applies to the total sale amount including:
- Item price (full price or sale price)
- Shipping cost charged to buyer
- Gift wrapping fees
- Personalization fees
For example, if you sell an item for $50 with $5 shipping, the transaction fee is 6.5% of $55 = $3.58.
Step 3: Processing Payment (3% + $0.25)
All payments through Etsy Payments incur a processing fee. This is similar to credit card processing fees charged by other platforms. The fee structure is:
- 3% of total order value - Percentage-based component
- $0.25 per transaction - Fixed per-order charge
- Applies to item price, shipping, gift wrap, and all other charges
- International rates may vary by seller country
Step 4: Offsite Ads Attribution (12-15%)
If a customer purchases your item after clicking an Etsy Offsite Ad, you'll owe an additional advertising fee:
- 15% fee - For shops with less than $10,000 annual sales
- 12% fee - For shops with $10,000+ annual sales
- Attribution window is 30 days from ad click
- Shops under $10,000 annual sales can opt out
- Shops over $10,000 are automatically enrolled (cannot opt out)
Offsite Ads fees can significantly impact your margins. If you're just above the $10,000 threshold and cannot opt out, factor the 12% fee into your pricing for all products to maintain profitability on ad-attributed sales.
Step 5: Shipping Labels (Variable)
If you purchase shipping labels through Etsy, additional considerations apply:
- Labels are deducted from your payment account balance
- Etsy offers discounted USPS, FedEx, and UPS rates
- Discounts range from 30-60% off retail rates
- Insurance and signature confirmation available at extra cost
- International labels include customs documentation
Step 6: Currency Conversion (2.5%)
For international sellers or when processing payments in different currencies:
- 2.5% currency conversion fee applies
- Conversion uses Etsy's exchange rate at time of deposit
- Consider setting up a multi-currency bank account to minimize fees
Calculation Methodology
This calculator uses the official 2025 Etsy fee structure to compute your exact costs and profits. Understanding the methodology helps you verify calculations and make informed pricing decisions.
Fee Calculation Formulas
Our calculator applies fees in the order Etsy processes them:
1. Listing Fee
Formula: $0.20 x Quantity Sold
Each unit sold triggers a new listing fee for multi-quantity listings. For single-quantity listings, one listing fee applies per sale.
2. Transaction Fee
Formula: (Item Price + Shipping + Gift Wrap) x 6.5%
The transaction fee applies to the total order value the buyer pays, not just the item price.
3. Payment Processing Fee
Formula: (Total Order Value x 3%) + $0.25
The payment processing fee has both a percentage component and a fixed per-transaction fee.
4. Offsite Ads Fee (When Applicable)
Formula: Total Order Value x (12% or 15%)
Only applies when the sale is attributed to an Etsy Offsite Ad click within the past 30 days.
5. Currency Conversion Fee (When Applicable)
Formula: Net Payout x 2.5%
Applies when your shop currency differs from your bank account currency.
Profit Margin Calculations
We calculate multiple profit metrics to give you a complete picture:
Gross Profit
Formula: Sale Price - Cost of Goods Sold
This represents your profit before Etsy fees are deducted.
Net Profit (True Profit)
Formula: Sale Price - COGS - All Etsy Fees - Shipping Cost
This is your actual take-home amount after all deductions.
Profit Margin Percentage
Formula: (Net Profit / Sale Price) x 100
Expressed as a percentage of your sale price.
Return on Investment (ROI)
Formula: (Net Profit / COGS) x 100
Shows the return you're getting on your material and labor investment.
Data Sources
All fee rates are sourced from:
- Official Etsy Seller Handbook
- Etsy Fees & Payments Policy (updated January 2025)
- Etsy Advertising Program Terms
- Etsy Payments processing terms by country
You can verify this calculator's accuracy by comparing results to your Etsy Payment Account. Look at the "Fees & Taxes" section in your shop's Finances tab for actual fee breakdowns on past sales.
Assumptions and Limitations
This calculator makes the following assumptions:
- Fees are based on US seller rates (international rates may differ)
- Payment processing uses standard Etsy Payments (not PayPal legacy)
- No promotional credits or fee waivers are applied
- Refunds and chargebacks are not factored into calculations
- Sales tax collection is handled separately by Etsy
Use Cases & Scenarios
This calculator serves various purposes for Etsy sellers at different stages of their business journey. Here are common scenarios and how to use the calculator effectively for each.
Scenario 1: Pricing a New Product
You've created a new handmade product and need to determine the right selling price. Use the calculator to work backward from your desired profit margin:
- Enter your cost of goods sold (materials + labor)
- Set your desired profit margin (e.g., 50%)
- Adjust the selling price until you achieve your target margin
- Factor in competitive pricing from similar items
- Consider offering free shipping by building costs into item price
Example: Handmade Jewelry
Materials: $8, Labor: $12 (30 min @ $24/hr), Target margin: 50%. Work backward to find the minimum price that achieves your goal after all fees.
Example: Digital Download
COGS: $0 (digital product), Consider time invested in creation, Price based on value to customer and competition.
Scenario 2: Evaluating a Sale or Promotion
Considering a 20% off sale? Use the calculator to ensure you'll still profit:
- Enter your regular price, then the discounted price
- Compare profit margins at each price point
- Determine your minimum acceptable discount
- Factor in potential volume increase from the promotion
Scenario 3: Should You Offer Free Shipping?
Etsy's algorithm favors listings with free shipping, especially for orders over $35. Use the calculator to analyze:
- Calculate your profit with separate shipping charge
- Calculate profit with shipping built into item price
- Consider the 6.5% transaction fee applies to shipping either way
- Evaluate if higher conversion rate justifies any margin reduction
Scenario 4: Offsite Ads Impact Analysis
If you're approaching the $10,000 threshold or already enrolled in mandatory Offsite Ads:
- Run calculations with and without Offsite Ads fees
- Determine the minimum price increase needed to maintain margins
- Identify products where Offsite Ads would cause losses
- Consider whether to raise all prices preemptively
Scenario 5: International Selling Considerations
Selling to international buyers involves additional fees:
- Check the "Currency Conversion" option for international sales
- Add international shipping costs (often 2-3x domestic rates)
- Consider customs/duties impact on buyer experience
- Evaluate if international orders are profitable for your products
Scenario 6: Tax Planning and Quarterly Estimates
For self-employment tax planning, accurate profit calculations are essential:
- Net profit from this calculator = taxable business income
- Etsy fees are deductible business expenses
- Track all costs of goods sold for accurate tax reporting
- Use our Quarterly Tax Calculator with your annual Etsy profit projection
Scenario 7: Wholesale vs. Retail Pricing
If you're considering selling wholesale in addition to Etsy retail:
- Calculate your true cost per item (COGS + labor)
- Wholesale prices typically 50% of retail
- Ensure Etsy retail price leaves room for wholesale pricing
- Remember wholesale avoids Etsy fees but may have other costs
Run these calculations for your top 5-10 products monthly. Market conditions, material costs, and your own efficiency all change over time. Regular price analysis keeps your shop profitable.
Frequently Asked Questions
Comprehensive answers to the most common questions about Etsy fees, taxes, and seller profitability.
Basic Fee Questions
At minimum, Etsy takes approximately 9.5% plus $0.45 per sale (6.5% transaction fee + 3% payment processing + $0.20 listing fee + $0.25 payment processing flat fee). However, this can increase significantly: with Offsite Ads attribution, total fees can reach 21.5-24.5% of the sale price. For a $50 sale without Offsite Ads, expect approximately $5.20 in fees. With Offsite Ads, that same sale would incur $11.45-$12.95 in fees.
Yes, Etsy charges the 6.5% transaction fee on the total order amount, which includes shipping charges. If you charge $10 for shipping, Etsy collects an additional $0.65 in transaction fees. The payment processing fee (3% + $0.25) also applies to the total including shipping. This is why some sellers prefer to offer "free shipping" and build shipping costs into the item price - the fees are the same either way, but free shipping may improve your search ranking and conversion rate.
The $0.20 listing fee is charged in three situations: (1) When you first publish a listing, (2) When a listing auto-renews after 4 months, and (3) When an item sells and the listing renews for the next unit (for multi-quantity listings). If you have a listing with 10 units and sell 3 in one month, you'll pay $0.60 in listing fees that month (3 x $0.20). Private listings and listings in vacation mode still incur fees if they expire and renew.
The transaction fee (6.5%) is Etsy's commission for facilitating the sale on their marketplace platform. This is Etsy's primary revenue from sellers. The payment processing fee (3% + $0.25) covers the cost of credit card/debit card processing through Etsy Payments. These are separate fees that both apply to every sale. Combined, they represent the baseline 9.5%+ that Etsy takes from each transaction. The transaction fee applies to the sale total; the payment processing fee applies to the same total but with an additional flat $0.25 per order.
Offsite Ads Questions
It depends on your shop's sales volume. Shops that made less than $10,000 USD in the past 365 days CAN opt out through Shop Manager > Marketing > Offsite Ads. However, shops that exceeded $10,000 in trailing 12-month sales are automatically enrolled and CANNOT opt out - this is a mandatory program for higher-volume sellers. Once you cross the $10,000 threshold, the only way to exit is to reduce sales below $10,000 for a full year, which obviously isn't a desirable business strategy.
Etsy uses a 30-day attribution window. If a potential buyer clicks on one of your Offsite Ads (on Google, Facebook, Instagram, Pinterest, or Bing), any purchase they make from your shop within the next 30 days will be attributed to that ad click, triggering the 12-15% fee. The buyer doesn't need to purchase the exact item from the ad - any item from your shop qualifies. There's no way to see which specific sales were ad-attributed until your monthly statement, and Etsy doesn't provide click data for individual ads.
The value depends on your margins and whether the sales would have happened anyway. For high-margin products (60%+ profit margin), the 12-15% fee may be acceptable for incremental sales. For low-margin products, it can eliminate your profit entirely. Many sellers argue that some ad-attributed sales would have occurred organically, meaning you're paying for customers you would have gotten anyway. If you can opt out and have strong organic traffic, it may be worth disabling. If you're mandatory enrolled, ensure your pricing accounts for the fee on approximately 10-30% of sales.
Based on seller reports, typically 10-30% of sales are attributed to Offsite Ads, though this varies widely by shop and product category. Shops selling trendy, gift-oriented items tend to see higher ad attribution. Shops with established repeat customers see lower rates. Some sellers report 50%+ ad attribution, while others see single digits. For financial planning, assuming 20-25% of your sales will incur the Offsite Ads fee is a reasonable middle ground. You can check your actual rate in Shop Manager > Finances > Payment account > View detailed breakdown.
Pricing Strategy Questions
Most successful Etsy sellers aim for 40-60% net profit margin after all costs and fees. This provides buffer for: occasional Offsite Ads fees, sales and promotions, increased material costs, refunds/returns, platform fee increases, and unexpected expenses. For digital products with near-zero COGS, margins can be higher (70-80%). For low-priced items, you may need lower margins to remain competitive. Never price below 30% margin unless it's a strategic loss leader - unsustainable pricing is the top reason Etsy shops close.
Use this formula to find your break-even price: (COGS + Shipping Cost + $0.45) / (1 - 0.095 - desired margin). For example, with $10 COGS, $5 shipping, and 40% desired margin: ($10 + $5 + $0.45) / (1 - 0.095 - 0.40) = $15.45 / 0.505 = $30.59 minimum price. Add more for Offsite Ads buffer: divide by (1 - 0.22) instead if you expect 20% of sales to be ad-attributed. This calculator automates these calculations - enter your costs and adjust price until you achieve your target margin.
Etsy gives priority placement to shops offering free shipping on orders $35+. However, "free shipping" isn't free - you're building costs into item prices. Pros: Better search ranking, higher conversion rates, simpler buyer experience. Cons: Higher displayed prices may deter some buyers, international shipping costs vary widely. The transaction fee applies to shipping either way, so there's no fee advantage. Our recommendation: Offer free shipping on domestic orders $35+ by building average shipping cost into item prices. Use calculated shipping for international orders.
Custom items require premium pricing because: (1) Additional time for customer communication, (2) Higher error risk on personalized orders, (3) Items cannot be resold if cancelled, (4) Often require custom materials or colors. Price custom items at minimum 25-50% above similar non-custom items. Charge separately for personalization as an add-on fee. Etsy allows you to add personalization fees which are subject to the same fees as item price. Factor in extra production time - if a custom order takes twice as long, it should cost accordingly.
Tax Questions
Yes, all Etsy income is taxable regardless of amount. You must report your net profit (revenue minus expenses) as self-employment income. If you earn $600+ from Etsy in a calendar year, Etsy will send a 1099-K form to you and the IRS. However, even without a 1099-K, you're legally required to report all business income. Self-employed individuals also owe self-employment tax (15.3% for Social Security and Medicare) on net earnings above $400. Use our Quarterly Tax Calculator to estimate payments.
All ordinary and necessary business expenses are deductible, including: Etsy fees (listing, transaction, payment processing, Offsite Ads), cost of materials and supplies, shipping costs and packaging, shipping label purchases, equipment (camera, computer, tools), home office expenses, internet and phone (business portion), professional photography, software subscriptions, marketing costs, professional services (accounting, legal), education and training, and mileage for supply runs or post office trips. Keep detailed records and receipts for all deductions.
Yes, Etsy is a "marketplace facilitator" in all US states with sales tax. This means Etsy automatically calculates, collects, and remits sales tax on your behalf for orders shipped to addresses in states requiring collection. You don't need to collect sales tax separately or register for sales tax permits in other states. The sales tax is collected from the buyer and never appears in your payment account - it goes directly to state tax authorities. Note: This only applies to US sales; international tax obligations vary by country.
If you expect to owe $1,000 or more in taxes for the year (after withholding from other jobs), you should make quarterly estimated payments. Due dates are April 15, June 15, September 15, and January 15 of the following year. For Etsy sellers, a safe approach is to set aside 25-30% of your net profit for taxes and pay quarterly. Underpayment can result in penalties. Use our Quarterly Estimated Tax Calculator to determine exact payment amounts based on your income and filing status.
Shipping Questions
Usually yes. Etsy offers discounted shipping rates with USPS (up to 30% off), FedEx, and UPS. The discounts are similar to what you'd get with a Pirateship or Stamps.com account. Advantages of Etsy labels: automatic tracking upload, simple interface, deducted from payment account (no separate payment). Disadvantages: limited carrier options, may not be cheapest for all package sizes. Compare rates for your typical package sizes between Etsy, Pirateship, and direct carrier rates to find the best option for your business.
International shipping is significantly more expensive (often 2-4x domestic rates) and involves additional considerations: customs documentation, potential duties/taxes for buyers, longer transit times, higher loss/damage risk, and tracking limitations. Recommendations: Use calculated shipping for international orders (not flat rate), include handling fee for customs paperwork time, consider offering international shipping only for higher-value orders, and clearly communicate that buyers are responsible for import duties. Some sellers choose to disable international shipping for low-margin items.
Business Growth Questions
Consider diversifying beyond Etsy when: (1) You cross $10,000/year and can't opt out of Offsite Ads, (2) Etsy fees exceed 15-20% of revenue regularly, (3) You have repeat customers who would purchase directly, (4) Your brand is strong enough to attract traffic independently. Options include: your own Shopify/WooCommerce store (lower fees but you drive traffic), Amazon Handmade (different audience, similar fees), wholesale to retailers, or local craft shows. Many successful sellers maintain Etsy presence while building their own website for repeat customers.
Successful high-volume Etsy sellers typically: (1) Price products with ALL fees factored in, not as an afterthought, (2) Review and adjust prices quarterly as costs change, (3) Focus on higher-margin products (fees hurt less on $100 items than $10 items), (4) Optimize listings to maximize organic traffic (reduce reliance on Offsite Ads), (5) Build email lists for repeat customers, (6) Deactivate non-performing listings to reduce renewal fees, (7) Bundle products to reduce per-item fee impact, (8) Track all costs religiously using spreadsheets or accounting software.
An LLC may be beneficial once your Etsy business reaches significant revenue ($20,000+) or faces liability risks. Benefits: Personal asset protection if sued, more professional appearance, potential tax advantages at higher income levels. Costs: Filing fees ($50-500+ depending on state), annual reports, potentially separate bank accounts and bookkeeping. For most hobby sellers or early-stage businesses, operating as a sole proprietor is sufficient. Consult with a business attorney or CPA when you're consistently profitable to determine the right timing and structure for your situation.
Etsy provides detailed fee information in Shop Manager > Finances > Payment account. For comprehensive tracking: (1) Download monthly CSV statements from Etsy, (2) Use accounting software like QuickBooks Self-Employed, Wave (free), or spreadsheets, (3) Categorize all expenses (materials, fees, shipping, marketing), (4) Reconcile Etsy deposits to your bank account monthly, (5) Keep receipts for all purchases (apps like Expensify help), (6) Track inventory separately from expenses. Set aside time weekly or monthly for bookkeeping - catching up at tax time is stressful and error-prone.
Etsy Seller Glossary
Understanding Etsy's terminology is essential for managing your shop effectively. Here are the key terms every Etsy seller should know.
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Listing FeeA $0.20 fee charged when you publish a new listing, when a listing auto-renews every 4 months, or when an item sells and the listing renews for remaining inventory. This is separate from transaction and payment processing fees.
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Transaction FeeA 6.5% fee applied to the total sale amount (item price + shipping + gift wrap) when a sale is completed. This is Etsy's primary commission for marketplace sales.
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Payment Processing FeeA 3% + $0.25 fee charged by Etsy Payments to process credit card, debit card, and other electronic payments. Applied to the total order value including shipping.
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Offsite AdsEtsy's advertising program that promotes your listings on Google, Facebook, Instagram, Pinterest, and Bing. You pay a 12-15% fee only when a sale results from an ad click within 30 days. Shops over $10,000 annual sales cannot opt out.
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Etsy AdsOn-platform advertising that promotes your listings within Etsy search results. You set a daily budget and pay per click. Different from Offsite Ads which advertise on external platforms.
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Etsy PaymentsEtsy's required payment processing system that handles all buyer payments and seller deposits. Most countries require sellers to use Etsy Payments; PayPal standalone is no longer supported for most sellers.
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Payment AccountYour Etsy account balance where revenue from sales accumulates minus fees. Funds are deposited to your bank account on a regular schedule (daily, weekly, biweekly, or monthly based on your settings).
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Cost of Goods Sold (COGS)The direct costs of producing your products, including materials, components, and direct labor. Does not include indirect costs like rent, utilities, or marketing. Essential for calculating true profit margins.
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Gross ProfitRevenue minus cost of goods sold, before Etsy fees and other operating expenses are deducted. Represents the basic markup on your products.
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Net ProfitYour actual profit after ALL costs are deducted: COGS, Etsy fees, shipping, packaging, and other business expenses. This is your true "take-home" per sale.
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Profit MarginNet profit expressed as a percentage of sale price. A 40% profit margin means you keep $40 of every $100 in sales after all costs. Higher-margin products are more sustainable long-term.
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Star SellerAn Etsy badge awarded to shops meeting criteria for message response rate (95%+), shipping on time (95%+), 5-star ratings (95%+), and minimum order count. Provides search visibility benefits.
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Shop ManagerEtsy's seller dashboard where you manage listings, orders, finances, marketing, and shop settings. Access via Etsy.com or the Sell on Etsy mobile app.
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1099-KIRS tax form that Etsy sends if you receive $600 or more in payments during the calendar year. Reports gross payment volume, not profit. You're responsible for reporting all income regardless of receiving a 1099-K.
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Self-Employment TaxThe 15.3% tax (Social Security + Medicare) that self-employed individuals pay on net earnings from self-employment above $400. This is in addition to regular income tax on your Etsy profits.
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Marketplace FacilitatorA legal designation meaning Etsy is responsible for collecting and remitting sales tax on behalf of sellers in applicable states. Sellers don't need to separately collect sales tax for marketplace sales.
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Calculated ShippingShipping rates automatically calculated based on package weight/dimensions and buyer location. Alternative to fixed/flat-rate shipping. Requires accurate product weight and size in listings.
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Free Shipping GuaranteeEtsy's program that provides priority search placement for US shops offering free shipping on orders $35+. Shipping costs are typically built into item prices to offer "free" shipping.
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RenewalWhen a listing expires (after 4 months) or an item sells, Etsy can automatically renew the listing, charging another $0.20 listing fee. Can be turned off in listing settings.
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SKU (Stock Keeping Unit)A unique identifier you assign to each product or variation for inventory tracking. Helpful for managing multiple variations and syncing with inventory management systems.
Resources for Etsy Sellers
Maximize your Etsy success with these official resources, tax tools, and business guides curated for sellers.
Official Etsy Resources
- Etsy Fees and Listing Costs - Official breakdown of all Etsy seller fees
- Etsy Payments Guide - How Etsy's payment system works
- Offsite Ads Information - Official guide to Etsy's offsite advertising program
- Etsy Seller Handbook - Tips and best practices for Etsy sellers
- Shipping Labels on Etsy - Guide to purchasing discounted shipping
Tax Resources for Sellers
- Quarterly Estimated Tax Calculator - Calculate your quarterly tax payments
- 1099 vs W-2 Calculator - Understand self-employment tax implications
- Home Office Deduction Calculator - Calculate your home workspace deduction
- Mileage Deduction Calculator - Track business driving for tax deductions
- IRS Schedule C - Business profit/loss form for sole proprietors
- IRS Self-Employment Tax Guide - Official SE tax information
Business Planning Tools
- Business Entity Tax Calculator - Compare LLC vs sole proprietor tax treatment
- SBA Business Structure Guide - Help choosing the right business entity
Recommended Tools for Etsy Sellers
Accounting Software
QuickBooks Self-Employed, Wave (free), FreshBooks - Track income, expenses, and generate tax reports.
Shipping Platforms
Pirateship (free), Stamps.com, ShipStation - Compare rates and print discounted labels.
Etsy Analytics
eRank, Marmalead, Sale Samurai - SEO tools and competitor research for Etsy sellers.
Inventory Management
Craftybase, Sortly, Stocky - Track materials, products, and costs across sales channels.
Professional Consultation
For complex business decisions, consider consulting with professionals:
- CPA or Tax Professional - For tax planning, quarterly payments, and business structure advice
- Business Attorney - For LLC formation, contracts, and intellectual property protection
- Business Coach - For pricing strategy, marketing, and business growth planning
Consider professional consultation when you reach $30,000+ in annual sales, face complex tax situations, want to form a business entity, or have questions about contracts and intellectual property. The cost of professional advice often pays for itself in tax savings and legal protection.
Selling on Etsy involves multiple fee categories that can significantly impact your profit margins. This comprehensive calculator helps you understand exactly how much Etsy takes from each sale and what your true profit will be after accounting for all costs.
The True Cost of Selling on Etsy
Many new Etsy sellers are surprised to learn that Etsy fees can total 15-25% or more of each sale. The main fees include:
- Listing Fee: $0.20 per item
- Transaction Fee: 6.5% of sale price + shipping
- Payment Processing: 3% + $0.25 per transaction
- Offsite Ads: 12-15% on attributed sales
Without understanding your true costs, you risk underpricing products and losing money on every sale. Successful Etsy sellers typically aim for 40-60% net profit margin after all fees.
Step 1: Listing Your Item ($0.20)
When you create a listing, you're charged $0.20. This covers 4 months or until the item sells. Multi-quantity listings charge $0.20 per unit sold.
Step 2: Making a Sale (6.5%)
The transaction fee applies to item price + shipping + gift wrap. For a $50 item with $5 shipping, the fee is 6.5% of $55 = $3.58.
Step 3: Payment Processing (3% + $0.25)
Applied to total order value. This is similar to standard credit card processing fees.
Step 4: Offsite Ads (12-15%)
If a customer buys after clicking an Etsy ad on Google, Facebook, etc., you owe an additional fee. Shops over $10,000/year cannot opt out.
Fee Calculation Formulas
Listing Fee: $0.20 x Quantity Sold
Transaction Fee: (Item + Shipping + Gift Wrap) x 6.5%
Payment Processing: (Total Order x 3%) + $0.25
Offsite Ads: Total Order x (12% or 15%)
Profit Calculations
Net Profit: Sale Price - COGS - All Fees - Shipping
Profit Margin: (Net Profit / Sale Price) x 100
All rates sourced from official Etsy documentation updated January 2025.
Pricing a New Product
Enter your COGS, set target margin, adjust price until you achieve your goal after fees.
Evaluating Promotions
Compare profit margins at regular vs sale prices to ensure discounts are sustainable.
Free Shipping Analysis
Calculate if building shipping into item price (for algorithm benefits) maintains your margins.
Tax Planning
Net profit from this calculator = taxable business income. Use for quarterly tax estimates.
What's the total percentage Etsy takes?
Minimum ~9.5% plus $0.45 per sale. With Offsite Ads, can reach 21-25%.
Does Etsy charge fees on shipping?
Yes, the 6.5% transaction fee applies to shipping charges too.
Can I opt out of Offsite Ads?
Only if you made less than $10,000 in the past year. Above that, it's mandatory.
What profit margin should I aim for?
40-60% net margin after all costs and fees is recommended.
Do I pay taxes on Etsy income?
Yes, all income is taxable. You'll get a 1099-K if you earn $600+.
See full FAQ section for 20+ detailed questions and answers.
Listing Fee: $0.20 fee per listing creation, renewal, or sale.
Transaction Fee: 6.5% Etsy commission on sales.
Payment Processing Fee: 3% + $0.25 for credit card processing.
Offsite Ads: 12-15% fee for sales from Etsy's external advertising.
COGS: Cost of Goods Sold - materials and direct labor.
Net Profit: Your take-home after all costs and fees.
1099-K: IRS form for $600+ in payment processing.
Star Seller: Etsy badge for meeting performance criteria.
Official Etsy Resources
Tax Calculators
Recommended Tools
Accounting: QuickBooks, Wave (free), FreshBooks
Shipping: Pirateship, Stamps.com
Analytics: eRank, Marmalead