Etsy Profit Calculator: Are You Pricing Correctly?
Running an Etsy shop involves more than just crafting beautiful items. To succeed, you have to master the math. Between listing fees, transaction fees, payment processing, and shipping, it is easy to sell a product for $20 and realize later you only made $2 profit.
Use our Etsy Fee Calculator above to break down your costs and ensure every sale is profitable.
The Etsy Fee Structure Explained
Unlike selling on your own website, Etsy charges multiple layers of fees. Here is exactly what is deducted from your sale in the USA:
1. Listing Fee
- Cost: $0.20 per item.
- Note: This fee is charged when you publish the listing and again every time the item sells (renewing the listing).
2. Transaction Fee
- Cost: 6.5% of the total order amount.
- Important: This percentage applies to the Sale Price + Shipping Charge. If you charge $20 for an item and $5 for shipping, Etsy takes 6.5% of $25.
3. Payment Processing Fee (Etsy Payments)
- Cost: 3% + $0.25 per transaction.
- This covers the credit card processing costs. It is deducted from the total transaction amount (including tax and shipping).
4. Offsite Ads (The "Hidden" Fee)
- Cost: 15% (for most sellers).
- Etsy advertises your products on Google, Facebook, and Instagram. If a shopper clicks an ad and buys from you within 30 days, you pay this fee.
- Tip: You can opt-out of this if your shop makes less than $10,000/year. If you make more, it is mandatory (but drops to 12%). Use the checkbox in our calculator to see how this impacts your margin.
How to Increase Your Etsy Profit Margins
Stop Underpricing Shipping
Many sellers make the mistake of charging the customer exactly what the postage label costs (e.g., $4.00).
However, Etsy takes 9.5% (6.5% Trans + 3% Proc) from that shipping money.
- Strategy: If postage costs you $4.00, you should charge the customer at least $4.50 to break even on shipping.
The "Free Shipping" Myth
Should you offer Free Shipping?
- Pros: Etsy's algorithm prioritizes shops with free shipping guarantee (on orders over $35).
- Cons: You absorb the cost.
- Calculation: Use the calculator above. Enter "0" in the Shipping Charge field, but add your estimated postage to the Shipping Cost field. If your Net Profit is still green, go for it!
Bulk Buy Materials
The easiest way to improve the "Item Cost" input is to buy raw materials in bulk. Lowering your material cost from $4.00 to $3.00 doesn't look like much, but over 100 sales, that is $100 straight to your pocket.
