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How Much Does it Cost to Start an Etsy Shop

One of the first options for online product sales that people learn about when setting up their small businesses is Etsy. Many entrepreneurs begin their journeys on this platform. Many continue to operate their Etsy shop long after they've gained some notoriety in the market and have their own standalone website.

Although Etsy is one of the most fancied marketplaces for selling handmade goods, the fees and cost of running your Etsy shop can quickly pile up. Opening an Etsy shop doesn't cost a cent, but Etsy charges fees whether or not you make sales on their platform and takes a percentage of each sale you make.

Once you understand the Etsy fees levies, you need to consider the other expenses related to operating an Etsy shop. This article will discuss the actual cost of starting and running your Etsy shop. Keep reading to find out more.

 

1. Listing Fee: Etsy Shop

The process of adding a product to your Etsy shop is known as listing. That said, the listing fee is the fee you'll end up paying for listing your products for sale on your Etsy shop. Typically, you'll be charged a listing fee for each product you post.

On Etsy, the listing fee is a flat rate of $0.20 per listing. What's more, this price is charged whether or not the item listed sells. The charge is automatically added to your payment account after the item is listed. Additionally, once you've listed your product, you'll be exposed to other types of listing fees, for instance:

 

  • Auto-renew sold:this listing system automatically reposts your listing once purchased. That will save you time compared to reposting the item manually. When you set this system up, you'll be charged a standard $0.20 listing fee.

  • Private-listing fee: here's another helpful tool, especially if you want to post privately. What does that mean? This feature lets you post a particular item for only a specific buyer to see. The private-listing fee costs about $0.20

  • Multi-quantity listing fee: when a customer charges different variations of a single item, you'll be charged another $0.20. Etsy lets you have different interpretations of a single product in any listing. That ensures your customers get options to pick from. But in such cases, this would ideally cost you a little extra.

 

2. Transaction Fees

Transaction fees are another bill you'll see a lot when you get your daily Esty bills. Etsy transaction fees are charged every time you make a transaction on the platform. As of April 11, 2022, Etsy has been taking 6.5% out of the total cost of each product in your listing.

This fee is automatically posted on your billing account. When you charge customers an extra shipping fee, Esty collects 5% from it.

 

3. Subscription Fees

Esty offers two subscription packages that you can choose from. There's the;

  • Esty Standard
  • Esty Plus

Esty standard is the default subscription plan which is free to every seller on the platform. On the other hand, Etsy plus charges a monthly subscription fee of $10. The subscription fee gets added to your payment account monthly in your domestic currency. You get billed on the same day every month through the Etsy Auto-renew feature. For instance, if you upgrade to Etsy Plus on May 5, you will be billed on the 5th of every month.

 

Benefits of an Etsy Plus Subscription

Several advantages come with enrolling for Etsy plus. That includes;

  • You get a free shop URL in your first year of business
  • You get a wide range of design options and style options that you can use to make your shop unique
  • During your Etsy Plus subscription, you get two monthly credits that you can use to pay for Etsy ads or listing fees. You can use one credit to pay listing fees for up to 15 items and the other for $5 worth of Etsy ads.
  • Etsy plus allows you to customize how you showcase your products on your store, boosting your sales. You can customize the layout; size, and you can add animations.
  • Etsy plus comes with notifications for your customers. They are notified when you upload new items or when out-of-stock items are available again.

 

cost to start an etsy shop

 

4. Advertising Fees

Etsy has multiple services that allow you to promote your shop and advertise your listings on the platform. You will get Etsy ads and offsite ads. While the Etsy ads are free, you will need to pay for the offsite ads when your item makes a sale.

Two types of rates are available for the advertising fees depending on your annual revenue. If your yearly income is below $10,000, you get an ads rate of 15% and 12% for an annual revenue above $10,000.

 

5. Etsy Payment Processing fees

The Etsy payment processing fees are imposed on all sellers in countries where the Etsy payment option is available. Etsy payments are available in over 40 countries, including the UK, Canada, the US, and Australia. That means you will likely be compelled to use the Etsy payments for your store.

The payment processing fees are charged at a set rate plus a percentage of the total sale price of the sold item. Also, the set rates will likely vary depending on your country of origin. A good example is; that an Etsy store owner in the US will be charged a payment processing fee of 3% + $0.25. On the other hand, an Etsy store owner in the UK is charged a payment processing fee of 4% + 0.20 GBP.

 

An Example of a Niche Product Seller

Now that you understand and can follow through with the fees applied when your item is posted up to the delivery to your customer, let's have a case study in mind. That should help us calculate the profit and how much it will cost you to publish the item, plus the fees.

For example, you want to list RFID handheld computers on Etsy. Let's say you list this item for $800. With that in mind, let's calculate the cost and your profit margin.

 

  • Listing fee:each RFIF handheld computer will cost you 20 cents. But that will depend on whether the customer will buy just a single item or not. For illustration's sake, let's say the customer purchases ten products, then the listing fee will be $2.2.

  • Shipping fee:Assuming there's no free shipping, 5% of $800 is $40. Since the customer is shipping ten of them, the shipping cost will be $400.

  • Transaction fee:the transaction fee is 6.5% of the item's total cost. So that's 6.5% of $800 which is $52. The total price for this specific transaction is $520.

  • Payment processing fee:for clients who use Etsy fee payment and live in the US, this fee will be 3% of the total cost. That’s 3% of 8,000 plus ($0.25*10), which is $242.5.

The total amount of money you will give to Etsy is $2.2 + $400 +$520 +$242.5, which equals $1,164.7 from the sale of $8,000. Depending on the price of this item wholesale, you can use this example to calculate your profit levels. More importantly, if you want to calculate Etsy fees quickly, you can use their in-built calculator.

 

What Sellers are More Suitable for this Platform?

When getting started on Etsy, you must do category and product research. Such homework will likely be boring, but it will determine your store's future.

This step is crucial for anyone who hasn't come up with a specific niche. But if you don't like doing the heavy lifting, don't worry; we have you covered. This section will explore some of the best-performing niches on Etsy.

 

i. Stickers

If you're looking for creative items to sell on Etsy, you can never go wrong with selling stickers. This is one of the best choices as it's inexpensive to set up. Also, producing and shipping stickers is straightforward. All you need to do is come up with a design, then get a thermal stickers printer to print your stickers.

 

One of the best printers is the Munbyn Thermal Label Shipping Printer. It comes with 203DPI that effortlessly meets your daily printing needs. Also, with the 300DPI, you get a higher definition. And the best part is that it works with all Windows, Mac, and ChromeOS devices.

 

ii. Printables

Printables are digital products that customers buy, download, and print from the comfort of their own homes. The current top seller in this category is planners. This includes daily and budget planners, fitness goal trackers, fridge meal planners, and even blog or social media content planners.

Other top categories include;

  • Personalized items
  • Home and living
  • Clothing textile
  • Digital artwork
  • Vintage items
  • Accessories

cost to start an etsy shop


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