What Etsy Sellers Should Know about Etsy Fees (for digital products only)

Want to know how much Etsy fees (for digital products) you will be paying? Read on.

How much does Etsy take from a $100 sale? As an Etsy seller who has been selling on Etsy since April 2023, I can tell you confidently that it is about 40 to 50% of your sales.

In this post, I will share all about the Etsy fees for digital products, including Etsy processing fees, Etsy transaction fees, Etsy listing fees, VAT seller fees, and more.

Total transparency. I promise.

Etsy Fees Explained

First, let’s dive into the most recent Etsy monthly statement from the time of writing – April 2024. 

To give you some context, I did not do any marketing push this month and let the shop run by itself. I had a total of 14 orders and 79 listings ranging from SGD 2.73 to 21.80. To get a better idea, you can view my Etsy shop here.

In the monthly statement, there are 3 categories in total:

1. Sales
2. Fees
3. Marketing

#1 Fees

Let’s break down the fees first. Below is the exact amount that was deducted from my Etsy shop in April.

There are 5 types of fees here:

1. Listing fees – This is the amount you will need to pay whenever you list a product for sale on Etsy, including renewing an old listing. The listing fee is a flat rate of USD 0.20 per published listing.

2. Transaction fees – This is the amount Etsy collects when a customer purchases from your shop. This is only collected when you manage to sell a product. In other words, if you make 0 sales, you don’t have to pay any transaction fees.

3. Processing fees – These are a set rate + a percent of the total sale price of the product. This rate and percentage vary by the country you are in.

4. VAT on seller fees – This is the amount you pay for tax.

5. Share & Save Refund – This is the amount you can save when your customers click and purchase from a unique URL for your shop. For every order, Etsy will take 4% off the Etsy bill. 

I did not cover shipping fees here due to the nature of a digital product. You technically do not need to ship any product, as the customer can download the file immediately.

Resources for you: Etsy Fees Basics | Share & Save Program 

#2 Marketing

Next up, marketing fees.

There are 2 types of fees here:

1. Etsy Ads – This is the amount you will pay if you are running any ads on the Etsy platform. Since I don’t run Etsy Ads ever, I never had to incur any cost.

2. Offsite Ads – This is the amount you pay when a customer purchases an item from your shop through an Offsite ad. Offsite ad means that Etsy helps you to advertise your listings throughout the web. For example, the Google search engine, social media sites, and apps. 

The amount of offsite advertising fee you need to pay will depend on the total revenue you made on Etsy in the past 365 days.

• If the total revenue is less than USD 10,000, you will be charged a 15% fee for every order that came through an offsite ad BEFORE the advertising fee was applied.
• If the total revenue is at least USD 10,000, you will get a discounted fee of 12%.

Because I do not do much marketing on my own, I decided to let Etsy do it for me instead.

Resource for you: How Etsy’s Offsite Ads work?

#3 Sales

Lastly, sales. 

After deducting the sales tax and VAT paid by buyer (Remitted), the total sales I had for April is SGD 45.28.

#4 Total Profit

Let’s calculate the actual profit I got in my bank, shall we?

In April, the actual profit I got was $27.02, which was 60% of the sales. If it were a percentage of the ‘Total Sales’, it would be 57%. 

Summing up all the fees I have to pay, Etsy takes about 40 to 50% of your total sales number.

In the table, I have also broken down each fee so that you can have a better idea of what is the percentage of sales for each fee you have to pay every month.

Processing fees contributed the most to the amount of Etsy fees that I had to pay. Followed by listing fees, offsite ads, and transaction fees.

Is Etsy worth the fees?

After understanding how much fees you are giving away, I know what you are thinking.

“If Etsy is taking so much of my revenue, is it really worth it?”

The truth is… I can’t answer that for you. But I can let you know my thought process.

I started Etsy right after I resigned from my full-time job in 2023 and worked hard on it full-time for about 3 months, before deciding to diversify my efforts into other income streams. 

Because of the niche I am in, my products are in the lower price range. It was not until April that I had my most sales from Etsy.

I also encountered a time when Etsy suspended my shop for no reason, and I had to open a second shop, which you see today. Because of the suspension, I also set up a shop on Buy Me A Coffee Platform if anything were to happen again.

Truthfully, I did not do anything or spend much time on my Etsy shop and was able to have SGD 27.02 extra in my bank account. I am truthfully thankful. It makes me think “If I were to give it a little marketing push, would I have earned a little more?”

If you are thinking of giving Etsy a shot, here are some questions that you will need to think about:

1. How committed are you to making Etsy work in terms of time and effort?
2. What if Etsy did not work out for you? What is your plan B?
3. Is Etsy income going to be the main source of income or a passive one?
4. Are you going with evergreen items or seasonal items?

I feel that these questions are important to think through before going all in. 

For me, I did not give up after Etsy suspended my shop because 

1. It doesn’t take me much time to set up another Etsy shop
2. I had all the materials handy. I do not need to rewrite any description or title or make any new thumbnail photos.
3. A digital product is a non-perishable item. I can list it, put it there, and let it run by itself without putting too much effort.

If an Etsy shop is going to be your main source of income, I recommend having a higher price range for your products. If not, doing it like me should earn you a decent passive income to cover meals and transportation. 

This post is about simplifying Etsy fees for digital products.

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