Selling your unique items on Etsy comes with certain fees. In this article, we’re going to break down the different types of Etsy fees for UK sellers, how they’re calculated, and how you can view them in your Etsy account.
What are the Types of Etsy UK Fees?
Etsy fees can be broken down into several categories, each with its own costs and rules. It’s important to understand these different types of fees and how they might apply to your Etsy shop.
UK Listing Fee
Each time you list or renew an item on Etsy, you’ll be charged a listing fee. This fee is $0.20 per item (around 15p) and applies even if no sale is made. Each listing stays active for four months or until the item sells. There are exceptions for private listings, which are not charged a fee if they do not sell.
Transaction fees on Etsy are 6.5% of the total sale price (recently increased from 5%). These Etsy charges are based on your listing’s currency and includes postage and gift wrapping.
Payment Processing Fees
Processing fees for Etsy payments are 4% + £0.20 per transaction. These fees are taken from the item’s total sale price, including any sales tax and shipping fees. They are charged for each transaction that uses Etsy Payments.
Currency Conversion Fees
UK sellers are subject to special rules for currency conversion. If items are listed in a different currency to your payment account, Etsy Payments users will be charged a 2.5% currency conversion fee on the sale amount when transferring the funds to their account.
Postage Label Fees
The cost of postage labels from Etsy varies depending on several factors. You can purchase these directly from Etsy, who automatically fills out all necessary details and offers discounts with certain carriers.
Advertising on Etsy Fees (optional)
Etsy offers two types of advertising: internal Etsy ads (charged at a cost-per-click rate) and off-site ads (fees vary based on your sales and where the ads appear). The specifics of these fees will depend on how many clicks your ads get and the value of the place where your ad is shown.
Optional Subscription Fees
For an additional $10 per month, sellers can upgrade to Etsy Plus, which offers benefits such as discounted website addresses for your Etsy shop and advanced customization options.
Additional Etsy Fees and Considerations for Sellers
Additional fees may include regulatory operating fees, deposit currency conversion fees, and Etsy Pattern fees (if you use this service).
How Etsy Fees Are Calculated?
Etsy fees are primarily calculated based on the list price and transaction details. However, they can also be influenced by whether you use additional services, such as Etsy Plus, or whether you advertise on the site. Fees are deducted from your payment account in USD, and the current exchange rate is applied.
How to View Your Etsy Fees?
You can track and view all your Etsy fees and taxes in your payment account. You can access this by signing in to your Etsy account and clicking on Shop Manager, then on Finances and Payment account.
Is Selling on Etsy Worth It?
Selling on Etsy can be a rewarding way to reach a global market for your unique items. However, the variety of fees and costs associated with running a shop on the platform should be carefully considered when assessing profitability.
Tips to Reduce Etsy Fees
Etsy fees are a part of doing business on this creative marketplace. While these charges are unavoidable, there are several ways you can potentially reduce the impact of Etsy’s fees on your bottom line and increase your profitability. Here are some strategies to consider:
1. Bulk Listing
Listing fees are a fixed cost, so it makes sense to maximize the exposure of each listing. Instead of listing items individually, consider selling them in sets or as bulk. For example, instead of selling single handmade bracelets, why not offer a set of three or five? This way, you’re charged only one listing fee but can make a higher sale.
2. Manage Your Advertising Budget
Advertising can be a significant expense if not managed carefully. Etsy offers two types of advertising – Etsy Ads and Off-site Ads. Keep track of your advertising costs and measure the return on investment (ROI) regularly. Try to adjust your daily advertising budget according to the sales and revenue you are generating from the ads.
3. Use Efficient Shipping Methods
Postage label fees can add up quickly, especially for international shipping. Explore different shipping methods and choose the most cost-efficient option that ensures a good customer experience. Also, consider including shipping costs in your item price and offering ‘free shipping’. This can make your listings more attractive to customers, potentially driving more sales while covering the shipping cost.
4. Opt for Etsy Payments
While Etsy Payments comes with a processing fee, it could be cheaper in the long run when compared to the cost of Paypal transactions, which incur additional currency conversion fees. Plus, using Etsy Payments provides a more seamless buying experience for your customers.
Get Help with Ecommerce Accounting!
Managing your Etsy shop is just one aspect of running your business. Dealing with Etsy accounting can be challenging, especially when you have to consider different types of fees, taxes, and income lines. That’s where ecommerce accounting tools can step in to help.
Consider using a service like A2X for Etsy. This tool automatically calculates and posts a corresponding summarised invoice to your accounting software (we recommend Xero) for each Etsy bank deposit. All your fees, taxes, shipping costs, costs of goods sold, returns, reimbursements, and other lines are laid out for you.
A2X splits statements that span months and organizes your books in line with the accrual method of accounting.This means that you have an accurate monthly P&L and always know where you stand financially.
With a tool like A2X, you can focus more on crafting your beautiful products and delivering the best service to your customers, and less on the nitty-gritty of accounting.
As a UK Etsy seller, understanding and managing Etsy fees is crucial to run a successful and profitable business. From listing fees to transaction charges, every cost can impact your bottom line. While this guide gives you a comprehensive view of Etsy fees, each seller’s situation may vary. If you’re feeling overwhelmed or unsure about managing your ecommerce finances, remember that help is at hand.
Don’t let accounting complexities hold you back from growing your Etsy business. Let’s talk about how we can help you streamline your accounting, understand your costs, and optimize your profitability. Contact Elver E-Commerce today and let our team show you how easy managing your Etsy fees and finances can be.
Your craft is our passion, and we’re committed to helping you succeed. Reach out now and take the first step towards a stress-free financial future for your Etsy shop.