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Calculating your profits (+ FREE Profit Calculator!)
As an Etsy seller, it's important to be aware of the fees you'll incur when listing and selling items. Understanding these fees allows you to price your items accordingly to maximise your profits.
Although Etsy is not the only platform available for selling your products, it is one of the most popular marketplaces and provides instant access to an audience that you might not have on your own domain.
Unlike Shopify or WooCommerce, Etsy is an online marketplace. With an audience of over 96.3 million active users (measured in the fourth quarter of 2021), you're at a huge advantage and don't need to generate your store's traffic entirely from scratch.
But, the advantage of selling to a ready-made audience of potential customers is reflected in their higher fees.
Keep reading to learn more about Etsy fees and how to navigate them when pricing your products.
What fees does Etsy charge?
Etsy charges three main types of fees: a listing fee, a transaction fee, and a payment processing fee.
Listing fees 🏪
The listing fee is charged per item you list for sale on Etsy. This fee is $0.20 in the US, and £0.17 in the UK.
Think of the listing fee as Etsy's way of charging to host your store on their website.
The listing will auto-renew if you make a sale and you will be charged the £0.17 fee again. If a customer buys multiple units of the same product, the £0.17 fee will be multiplied by the order quantity.
If no sales are made on the listing within four months then it will auto-renew, and you will be charged £0.17 again.
Transaction fees 🛒
Etsy take a 6.5% cut from all orders, which is the transaction fee. It’s important to note that Etsy takes this cut from both the product and shipping costs.
Payments fee 💳
Etsy charges 4% of the total order value + £0.20 for using their payments system.
How to Price Your Products
One of the most crucial decisions you will make with your business is how to price your products. It’s essential to consider factors such as costs, competitor pricing, and long-term sustainability.
Retail price 🛍️
This is how much your customer will pay for your item. Etsy allows sellers to charge different prices to domestic and international customers.
You should carefully consider your retail pricing to ensure that you cover the cost of the product and also generate a profit.
Shipping price 🚚
This is how much you charge your customer for shipping, and does not have to reflect the price you pay Inkthreadable for shipping.
The general consensus in the Etsy seller community is that offering free shipping will boost your listing in the rankings and allow for it to be seen by more people.
If you choose to offer free shipping then it is important to build the cost into the retail price (eg. £18 product + £4 shipping = £22 product + free shipping).
It’s important to note that due to the limitations of Etsy’s API, standard UK shipping will default to RM24 or RM24 Tracked. Unfortunately RM48 services are not compatible with Etsy.
Calculating Your Profits
Your profits can be calculated by subtracting Etsy fees and Inkthreadable costs from the total amount charged to the customer.
An equation to work out profits should look something like this:
(Retail Price + Shipping Price) - (Listing Fee + Transaction Fee + Payments Fee) - (Product Cost + Shipping Cost) = Profit
For example, an 11oz White Mug with a retail price of £11.99 would generate a £5.66 profit:
(£11.99 + £4.00) - (£0.17 + £1.04 + £0.84) - (£4.28 + £4.00) = £5.66 profit
FREE Profits Calculator 💰
We've gone a step further to make it easy to work out your profits by creating a spreadsheet with the formula built in.
Download the profit calculator (then, upload to Google sheets or Excel and start working our your retail prices the easy way!)
Feel free to get in touch with us if you have any questions about selling on Etsy with Inkthreadable print on demand.