On June 23, 2021, the Etsy platform introduced new fees. Every seller, by opening their shop on the site, agrees to the following terms and conditions, so it’s worth familiarizing yourself with them. Let’s see how much does it cost to sell on Etsy?
Sell on Etsy? – table of contents:
- What are the types of fees?
- Etsy Payments
- Fee avoidance
- How does the seller pay?
- What taxes must be paid?
What are the types of fees?
In 2020, the Etsy platform gathered more than 4 million active sellers. For this reason, the service has prepared two plans:
- Etsy Standard – is aimed at sellers who don’t feel the need to register a monthly subscription and pay additional costs. Every newly registered shop gets access to Etsy Standard, and thus to tools and some paid services, such as Etsy Ads.
- Etsy Plus – works on a subscription basis, priced at $10/month. It offers access to tools designed to help sellers run their shop at a higher level. The package includes, among other things:
- The monthly voucher budget that goes towards Etsy Ads,
- Cheaper implementation of a customized shop web address, thanks to the available discount,
- More shop customization options.
The subscription fee is automatically charged from the date of registration. The merchant can change the plan at any time by clicking “Store plan” → “Settings” → “Your subscription”
Etsy charges sellers a fee for each product listed for sale and it is $0.20. The amount is also charged when a listing is renewed. There is no fee required when a seller edits a listing. If multiple items are listed in a single listing, the platform will charge a listing fee and a commission for each item listed, but only after the item is sold.
Etsy charges a commission on sales, which is 5%. The fee is calculated based on the combined total of the listing value, shipping costs, and gift wrap.
The sales commission will not apply to value-added tax, sales tax and harmonized sales tax (unless included in the listing price) – this applies to US and Canadian stores.
Stores selling outside the United States and Canada – their sales commission depends on the listing price, which should include all required taxes.
Sellers who subscribe to Etsy Ads can set their daily budget that they want to spend on marketing. In the case of Offsite Ads, the seller pays when their listing appears in the ad and the buyer enters it and then makes a purchase within 30 days. The standard fee is 15% of the value of the Assigned Orders. There are also exceptions to this, as outlined in this link.
A seller can sync Etsy listings with the Square reader for in-person payment processing. The Square reader is a free credit card reader that is compatible with the free Square Point of Sale app. It allows you to accept payments on your tablet or smartphone. Personal sales processed with the Square reader are not charged an Etsy sales commission of 5%. However, sellers are subject to Square payment transfer fees, which start at 2.6% + 10¢ for Mastercard, Visa, Discover and American Express transfers. A detailed price list can be found here.
The platform offers sellers the Etsy Payments feature, which charges sellers a fee to transfer payments. This fee varies depending on the location of the seller’s bank account. Details are available at this link. The amount is determined by the total amount of the sale, including taxes and shipping costs.
In some countries, retailers can take advantage of the option to purchase shipping labels. The cost of this label depends on the carrier, where the order is being shipped from and to, the weight of the shipment and its size. Additional fees apply if you choose the delivery confirmation option and insurance. Buying a label is possible only if, the seller has accepted Etsy Payments or PayPal.
The Pattern tool is used to create a personalized website. The merchant is eligible for a 30-day free trial. After that, a monthly subscription of $15 is charged. Sellers coming from the United States, face higher costs as Etsy charges additional sales tax on this monthly fee.
Regulatory operating fees are charged to sellers in specific countries and are related to the higher costs to incur to conduct business. This fee is charged per transaction and its calculation based on a country-specific percentage and the total amount of the offer (item value, shipping cost, taxes, gift wrapping, personalization). The regulatory operating fee in addition to other standard fees apply. The countries affected by this fee are:
- United Kingdom – 0.25%
- France – 0.40%
- Italy – 0.25%
- Spain – 0.40%
- Turkey – 1.1%
Etsy converts the costs that a seller incurs from USD to the currency in which they have a payment account. To avoid such fees, the platform recommends listing in the same currency as the payment account. Etsy Payments members listing in a different currency than their payment account will have to cover a currency conversion fee of 2.5%.
Etsy Payments is a feature that gives sellers the ability to accept various forms of payment in their currencies. Available forms of payment include credit and debit cards, gift cards, vouchers, PayPal, Google Pay, Apple Pay, and some bank transfer services.
Avoiding fees on Etsy is strictly prohibited. Any transaction initiated on Etsy must be finalized on Etsy. Sellers may not lower the price of an item after the sale to avoid transaction fees. They also mustn’t state false location or use another account if unauthorized to do so.
How does the seller pay?
The seller does not need to take any action to pay. Etsy automatically debits all applicable fees from the payment account. However, if the seller does not have sufficient funds in the account, they must pay within 15 days of the monthly summary date. If they fail to do so, Etsy has the option to charge their credit card. The platform can also suspend a user’s selling privileges until the user clears the arrears.
What taxes must be paid?
A seller who sells through the Etsy platform is required to collect and remit taxes. For some US sellers, Etsy issues a 1099-K form.
- Listing products on Etsy
- Service taxes to be borne by the seller
- Taxes that are charged to the buyer
Vendors in the United States and Canada can use a tool that will calculate the sales tax due on each sale.
Sellers outside the United States or Canada must include applicable taxes in their bid prices.
Etsy collects certain sales taxes/VAT on behalf of the seller, based on the categories they have assigned to each listing. If they are misclassified, Etsy can claim compensation from the seller for any losses that incurred due to this error.
In some instances, state sales tax associated with Pattern and Etsy Plus subscription fees is collected.
VAT is mandatory depending on the status and location of the company. This tax is levied on all charges and paid monthly to the relevant tax authority.
In the United States, in some states Etsy collects sales tax from the buyer and then remits it to the appropriate tax authority.
In some countries there is a provision mandating the collection of VAT on the sale of digital services.
You can find detailed information about the taxes you will have to pay at this link.
Knowing the fees associated with selling on Etsy, can help a seller to initially discern if this form of selling is profitable for them. How much does it cost to sell on Etsy? It depends what your requirements are. For example, with some additional paid options, you can increase your sales and visibility in search results.
Check out our other e-commerce articles: How to sell on Etsy? – adding offers, shop design, advertising!
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