What Etsy actually deducts from a sale
Etsy takes its cut in four separate charges, and only one of them is the commission most sellers have in mind. Knowing which is which matters, because two of the four scale with your price, one is flat per item, and one appears on some orders and not others.
The listing fee is $0.20. You pay it when you publish a listing and again each time it renews — including automatically after a sale, so in practice you pay $0.20 per item sold. The transaction fee is 6.5% of the order total, and the word "total" is doing real work there: Etsy applies it to the item price plus the shipping and gift wrap you charge. Payment processing is a separate charge from the card networks passed through by Etsy Payments — 3% plus $0.25 for a US bank account, with different rates in other countries. Offsite Ads is the one that surprises people: when a buyer reaches your shop through an advertisement Etsy paid for on Google, Facebook, Instagram, Pinterest or Bing and buys within 30 days, Etsy bills 15% of that order (12% if your shop has made $10,000 or more in the past 365 days, at which point participation is mandatory).
Add those together on a typical $38.50 order and Etsy keeps about $4.11, or roughly 10.7%. Add an Offsite Ads fee to the same order and it keeps about $9.89, or 25.7%. That gap — the same order costing you 2.4 times as much in fees — is the single largest swing in Etsy's fee structure, and it is why an average fee percentage taken from a monthly statement tells you very little about any individual sale.
The formula, and why the fee base is bigger than your price
Every percentage fee is charged on R, the order total, not on your item price. Build R first: item price × quantity, plus the shipping you charge, plus gift wrap if the buyer selected it. Then apply the rates.
The consequence catches out anyone who prices with "free shipping". If you bury $6.50 of postage in the item price instead of charging it separately, R is identical and so are your fees — Etsy is indifferent. But if you charge $6.50 of shipping on top, you pay 6.5% + 3% on that $6.50 as well, which is $0.62 of fees on money that only ever existed to buy a label. Free shipping is not cheaper on fees; it simply relabels the same fee base.
The flat charges behave in the opposite direction. The $0.20 listing fee and the $0.25 processing fee total $0.45 whatever the order is worth. On a $10 order that is 4.5% on its own; on a $250 order it is 0.18%. This is why Etsy's effective fee rate falls as order value rises even though every percentage stays constant — and why raising average order value is worth more to an Etsy shop than to a shop paying purely proportional fees.
To back-solve a price, rearrange. Write k for the sum of the percentage rates and F for the flat fees. Profit is R(1 − k) − F − C, where C is your materials, labour and postage. Setting that equal to m·R for a target margin m gives R = (F + C) ÷ (1 − k − m). The denominator is what limits you: at 9.5% in percentage fees you cannot reach a 91% margin at any price, and the calculator returns a dash rather than a fantasy number when you ask for one.
Worked example: a $32 item with $6.50 shipping
You sell one hand-thrown mug at $32.00 and charge $6.50 for shipping. Materials, packaging and the hours you pay yourself come to $14.50. The label costs $7.20. The order came from Etsy search, so no Offsite Ads fee applies.
- Build the fee base. R = $32.00 × 1 + $6.50 = $38.50.
- Listing fee. One item sold renews one listing: $0.20.
- Transaction fee. 6.5% × $38.50 = $2.5025.
- Payment processing. 3% × $38.50 = $1.155, plus $0.25 = $1.405.
- Total Etsy fees. $0.20 + $2.5025 + $1.405 = $4.1075, which is 10.67% of the order.
- Net payout. $38.50 − $4.1075 = $34.3925 reaches your bank.
- Your costs. $14.50 of materials and labour + $7.20 of postage = $21.70.
- Profit. $34.3925 − $21.70 = $12.69.
- Margin. $12.6925 ÷ $38.50 = 32.97%.
Now run the same order as an Offsite Ads sale. Etsy adds 15% × $38.50 = $5.775, taking total fees to $9.8825 and profit to $6.92 — a 17.97% margin. The order is still profitable, but you have handed over 45% of the profit for the traffic.
Finally, the target price. You want 30%. The percentage fees are 6.5% + 3% = 9.5%, the flat fees are $0.20 + $0.25 = $0.45, and your costs are $21.70. So R = ($0.45 + $21.70) ÷ (1 − 0.095 − 0.30) = $22.15 ÷ 0.605 = $36.61. Subtract the $6.50 of shipping and the item needs to list at $30.11 — slightly below your current $32.00, which tells you the mug already clears a 30% margin with room to spare.
How to read the margin, and what handmade sellers aim at
Read the margin against your own labour first. If you have priced your hours honestly inside the materials-and-labour field, the profit shown is genuine business profit on top of paying yourself — and a shop running at 25% to 35% on that basis is in healthy shape. If you left your labour out, the "profit" is really your wage plus profit mixed together, and comparing it to anyone else's margin is meaningless. Work out what your hours are worth with the freelance hourly rate calculator and put a real number in the field.
Then look at Etsy's share of the order total. On a search-driven order with no Offsite Ads fee, expect roughly 10% to 14% on typical craft price points — the reference table below gives the exact figure at each order value. If your shop's blended figure is much higher than that, either Offsite Ads is attached to a large share of your orders, or your order values are small enough that the $0.45 of flat fees dominates.
Two structural checks are worth making before you celebrate a margin. First, does the price survive a returned parcel? One refund wipes out the profit on several sales, because you refund the whole order total while the postage, the materials and part of the fees are already spent. Second, does it survive a discount? A coupon or sale price lowers the fee base and your revenue together, but your materials and postage do not move at all, so margin falls faster than price does — set the floor with the markup vs margin calculator and the selling price from margin calculator.
What Etsy keeps at different order values
| Order total | Fees, no Offsite Ads | % of order | Fees with 15% Offsite Ads | % of order |
|---|---|---|---|---|
| $10.00 | $1.40 | 14.00% | $2.90 | 29.00% |
| $25.00 | $2.83 | 11.30% | $6.58 | 26.30% |
| $40.00 | $4.25 | 10.63% | $10.25 | 25.63% |
| $60.00 | $6.15 | 10.25% | $15.15 | 25.25% |
| $100.00 | $9.95 | 9.95% | $24.95 | 24.95% |
| $250.00 | $24.20 | 9.68% | $61.70 | 24.68% |
| $500.00 | $47.95 | 9.59% | $122.95 | 24.59% |
| $1,000.00 | $95.45 | 9.55% | $195.45 | 19.55% |
The $1,000 row is where the cap shows up: the uncapped Offsite Ads fee would be $150, but Etsy charges $100. Every figure here is the formula above evaluated at that order total, so you can reproduce any row on paper.
You cannot opt out of Offsite Ads above $10,000
Etsy's Offsite Ads programme has two tiers. Below $10,000 in sales over the trailing 365 days you may opt out in your shop settings, and if you stay in, the fee is 15% of any attributed order. Once you cross $10,000, participation becomes permanent and the rate drops to 12%. The fee is capped at $100 per order either way, and it only applies when Etsy attributes the sale to an ad it bought — a repeat buyer who types your shop name into Etsy costs you nothing extra.
Price for the worst case if a meaningful share of your orders is ad-attributed. Set the Offsite Ads field to your rate, check that the margin still works, and treat the non-attributed orders as upside rather than the other way round.
Mistakes that make an Etsy profit estimate wrong
- Forgetting the transaction fee applies to shipping. On the worked example above, the $6.50 of shipping revenue carries $0.62 of transaction and processing fees on its own.
- Leaving your own labour out of cost. Then the profit figure is a wage, not a profit, and it will not fund materials for the next batch or a new kiln.
- Charging one listing fee on a multi-quantity order. Each item sold renews the listing, so a three-item order carries $0.60, not $0.20.
- Using an average fee rate from last month's statement. The Offsite Ads fee makes individual orders diverge enormously from the average — 10.67% versus 25.67% on the same $38.50 order.
- Ignoring the fixed $0.45. On a $10 trinket it is 4.5% of revenue by itself, which is most of the reason very cheap Etsy listings rarely work.
- Treating sales tax as revenue. Etsy collects and remits US sales tax as a marketplace facilitator; it passes through your account without being yours, and it is not part of the transaction-fee base.
- Not budgeting for returns and lost parcels. A refunded order costs you the materials, the postage and the flat fees, all of which are already spent.
What this calculator assumes, and what it leaves out
It models one order at the current published US fee schedule for a seller on Etsy Payments, and it assumes sales tax is collected and remitted by Etsy rather than by you, so tax sits outside the fee base. It charges the listing fee once per item sold, which matches how auto-renew behaves on a multi-quantity listing.
It excludes everything that does not vary with the order: an Etsy Plus subscription, Etsy Ads (on-site advertising, which is a daily budget rather than a per-order percentage), pattern site fees, your own equipment and studio costs, and income tax. It also excludes the regulatory operating fee charged to sellers in the United Kingdom, France, Italy, Spain and Türkiye, and the 2.5% currency conversion fee when your payment account currency differs from your listing currency. If either applies to you, add the percentage into the transaction fee field.
Finally, it prices a single order rather than a shop. To move from one order to a business, pair it with a break-even point calculator for your fixed monthly costs and the gross profit margin calculator for the whole product line.
Etsy against the other places you could sell the same item
Etsy's percentage take is modest by marketplace standards. On a search-driven order it keeps under 11% of a $40 sale, which is below the final value fee eBay charges in most categories and well below the referral fee Amazon charges before fulfilment even begins. What you are really buying with the fee is a buyer who arrived already looking for handmade or vintage goods, which no processor can sell you.
The comparison that matters is against your own store. On Shopify or WooCommerce you pay a payment processing fee of around 2.9% + $0.30 and no commission at all — but you also pay for every visitor yourself. At Etsy's 6.5% transaction fee, a $40 order funds $2.60 of commission; if acquiring that same customer on your own site costs more than $2.60, Etsy is the cheaper channel even before the listing and processing fees are counted. Work out your own figure with the customer acquisition cost calculator before you conclude that leaving Etsy saves money.
For print-on-demand shops the structure changes again, because the supplier absorbs the making and the postage: the print-on-demand profit calculator handles that split, and the dropshipping profit margin calculator handles the paid-traffic version of the same model.
Key terms
- Transaction fee
- Etsy's commission — 6.5% of the order total, including the shipping and gift wrap you charge, but excluding sales tax Etsy remits for you.
- Payment processing fee
- The card-acceptance charge inside Etsy Payments, quoted as a percentage plus a flat amount. 3% + $0.25 for a US bank account; the rate varies by country.
- Offsite Ads fee
- A 15% (or 12%) charge on an order Etsy attributes to an advertisement it bought on an external platform, capped at $100 per order.
- Net payout
- The order total minus Etsy's fees — the amount that reaches your bank account, before any of your own costs.
- Marketplace facilitator
- A platform legally required to collect and remit sales tax on its sellers' behalf. Etsy does this in every US state that requires it, which is why the tax is not yours and not part of your fee base.