Cost of Selling on Etsy: The Profit-First Pricing Guide

Most Etsy sellers believe they are profitable, until they review their books and discover that hidden fees have eroded their margins.

The cost of selling on Etsy is more complex than it appears. That $20 sale quickly becomes $12 after Etsy’s cut.

Once you add materials, time, and shipping, you may be left with pennies. Meanwhile, new fees, mandatory programs, and payment processing charges can consume a chunk of your revenue.

This guide will show you how to flip your pricing strategy and guarantee profit on every sale, no matter how complex the cost of selling on Etsy becomes.

Why profit-first pricing beats cost-plus on Etsy

Cost-plus pricing focuses on covering costs first and then adding a markup.

Make a macramé wall hanging with $8 in materials, add 50%, sell for $12. You just paid yourself $1.33 an hour for three hours of work.

Profit-first pricing flips this. Decide what profit you need, then work backward. Want $25/hour? That ornament taking 90 minutes needs to sell for at least $40.50 before you even think about materials.

This approach forces uncomfortable questions cost-plus lets you avoid. Which products actually make money? Which ones are subsidizing a hobby? Your pricing needs to carry you through slow Februaries, not just busy Decembers.

The psychology matters too. Cost-plus sellers apologize for their prices. On the other hand, profit-first sellers own them. Customers feel the difference, and confidence sells.

Suggested read: Marketplace Fees: Amazon, eBay, Etsy & Walmart Seller Costs Compared

The 7 Etsy fees eating your profits

Every sale triggers multiple fees that stack fast.

1. Listing fee

Etsy charges $0.20 each time you publish a listing, and it stays active for four months or until it sells.

If you have 200 listings and they renew quarterly, that’s $120 a year just to keep your shop stocked. Sell multiple quantities of one item? You pay another $0.20 for each additional sale beyond the first.

2. Transaction fee

Etsy takes 6.5% of the total amount displayed in each listing, including the item price, shipping, and gift wrapping.

Sell a $50 item with $8 shipping and $3.77 disappears immediately from the $58 total. This applies to every sale and hits harder than most sellers expect.

3. Payment processing fee

The standard payment processing fee in the US is 3% plus $0.25 per transaction.

That $58 order from before? Add another $1.99 on top of the transaction fee. These two fees always stack together and come out of every single payment.

4. Offsite ads fee

When a buyer clicks an Etsy ad on external sites like Google or Facebook and purchases from your shop within 30 days, Etsy charges an advertising fee of either 15% or 12% of the total order amount.

If your shop made less than $10,000 in the past year, you pay 15% and can opt out.

Once you hit $10,000, the fee drops to 12% but becomes mandatory for life. This fee can take a $58 sale down to $51.04 or $44.64 depending on your tier.

Suggested read: Etsy Bookkeeping Guide: Best Practices, Tools & Tax Tips

5. Currency conversion fee

If you list items in a currency different from your payment account currency, Etsy charges a 2.5% currency conversion fee on the sale amount.

This automated conversion happens through Etsy’s payment processing and adds another layer to international sales.

6. Etsy ads fee (Optional)

Want to promote your listings within Etsy’s search results? Etsy Ads work on a pay-per-click basis, with costs typically ranging between $0.20 and $0.60 per click.

You set a daily budget and bid on keywords. You pay for every click whether it converts to a sale or not.

7. Regulatory operating fee

Some regions require the cost of selling on Etsy to include regulatory compliance fees.

These vary by location and appear as separate line items in your payment account. Check your regional Etsy seller policies to see if this applies to you.

Suggested read: Shopify vs. Etsy Fees Explained: Find Your Break-Even

Setting prices that cover slow months

Your December sales will not pay your February bills without the right pricing strategy.

Most Etsy sellers price their products based on their best months. The holiday rush hits, orders flood in, and that $35 price point feels perfect. Then January arrives and sales drop 70%. Here is how to build pricing that works year-round:

• Find your baseline in your worst month: Pull sales data from the past year and identify your lowest revenue month to understand the true cost of selling on Etsy during slow periods
• Calculate minimum monthly income requirements: Add up rent, groceries, business expenses, debt payments, and savings, then divide by your slowest month’s order count
• Work backward from survival profit: If you need $3,000 monthly and sell 10 items in slow months, you need $300 profit per item to cover the cost of selling on Etsy
• Price for worst case: Your pricing should support February, not December, so the holiday rush becomes extra profit instead of your financial lifeline
• Account for volume psychology: When you are swamped with orders, you unconsciously factor in that volume, but the cost of selling on Etsy stays the same regardless of sales

Suggested read: 18 Common Ecommerce Mistakes to Avoid

The profit-first Etsy pricing formula: Step by step

Here is the formula top sellers use to guarantee profit on every sale:

1. Set your desired profit per item.
2. Add all costs: Materials, packaging, shipping, and your time.
3. List all Etsy fees: Listing, transaction, payment processing, offsite ads, currency conversion, shipping label, and regulatory fees.
4. Calculate backwards: Minimum Price = Desired Profit + Total Costs + Total Fees

Suggested read: How to Record Etsy Sales in QuickBooks

When to raise your prices (and how much)

Undercharging costs you more than just money. Consider raising your prices during these scenarios:

You are booked solid and turning down orders

When you cannot keep up with demand, your prices are too low. This is the clearest signal the market will send you.

If you are working nights and weekends and still have a two-week backlog, raise prices immediately by 20% to 30%. The right customers will stay, your workload becomes manageable, and your income goes up even if volume drops slightly.

Your costs increased but your prices did not

Materials went up 15% last year. Shipping costs jumped. Etsy raised transaction fees.

If you did not raise prices to match, you are making less profit on every sale than you were 12 months ago.

Calculate the percentage increase in your total costs and raise prices by at least that amount, rounded up to the nearest dollar for cleaner pricing.

Suggested read: Modular vs. Unified Ecommerce Reporting Tools: Which Approach Works Best?

You are attracting bargain hunters instead of ideal customers

Constant messages asking for discounts, complaints about shipping times, and requests for free customization all signal you are priced too low.

Higher prices filter out problem customers and attract buyers who value quality and service. A 25% to 40% increase often shifts your customer base dramatically without losing overall revenue.

You have improved your skills or product quality

Your products today are not the same as when you launched two years ago.

Better materials, refined techniques, professional photography, and faster turnaround times all justify higher prices.

Review your old listings against current ones. If the quality gap is obvious, your pricing should reflect that immediately with a 15% to 50% increase depending on the improvement.

You have not raised prices in over a year

Inflation alone justifies a 3% to 5% annual increase. If you have been selling at the same price point for 18 months while everything else got more expensive, you are effectively giving yourself a pay cut.

Set a calendar reminder to review pricing every six months and adjust for inflation at minimum.

Suggested read: Stage-Based B2B Integration Best Practices for Businesses

Real-world examples: Profit-first pricing in action

See how profit-first pricing works for digital, physical, and multi-channel sellers.

Handmade jewelry seller shifts from cost-plus to profit-first

Dana was pricing her sterling silver earrings at $28 based on $12 in materials plus a 130% markup.

She thought she was doing well until she calculated her actual hourly rate and discovered she was earning $8 per hour after accounting for the cost of selling on Etsy.

• Old pricing: $12 materials + 130% markup = $28 sale price, resulting in $8/hour after fees
• Profit-first calculation: Required $30/hour minimum wage + 45 minutes production time = $22.50 labor cost
• New formula: $12 materials + $22.50 labor + $8.67 Etsy fees (23% of sale price) + $5 desired profit margin = $48 new price

Result: Sales dropped 15% but revenue increased 38%, and she earned a sustainable hourly rate while working fewer hours.

Digital download creator discovers hidden costs

Marcus sold printable wall art for $6 per download, thinking digital products had no material costs. He did not account for design software subscriptions, stock photo licenses, or the cost of selling on Etsy eating into his margins.

• Hidden monthly costs: $53 Adobe Creative Cloud + $29 stock photo subscription + $45 average in Etsy fees = $127 overhead
• Previous thinking: Zero material costs meant pure profit on every $6 sale
• Profit-first reality: Needed to sell 85 downloads monthly just to break even on overhead before paying himself
• New pricing: Raised prices to $12-$18 based on complexity, factored overhead into per-item costs, reduced breakeven to 35 sales monthly

Result: Monthly income tripled while creating fewer new designs and focusing on marketing existing products.

Multi-channel seller stops subsidizing Amazon with Etsy profits

Jennifer sold candles on both Etsy and Amazon, using the same $24 price point on both platforms without calculating platform-specific costs.

The cost of selling on Etsy was 15% total in fees, while Amazon took nearly 30% between referral fees and FBA costs.

• Etsy breakdown: $24 sale price - $3.60 in fees (15%) = $20.40 after platform costs
• Amazon breakdown: $24 sale price - $7.20 in fees (30%) = $16.80 after platform costs
• Lost profit: Every Amazon sale earned $3.60 less than Etsy, but she was shipping the same volume to both
• Profit-first solution: Raised Amazon prices to $29 to match Etsy’s net profit, clearly communicated free shipping and Prime eligibility as added value

Result: Amazon revenue increased 18% with minimal impact on conversion rate, and overall profit margins normalized across channels​​​​​​​​​​​​​​​​.

Suggested read: Amazon Inventory Forecasting: When to Upgrade for Scale

How Webgility automates profit tracking across sales channels

As your business grows, choosing the right profit tracking tools becomes critical.

Every time an order comes through, Webgility records the full transaction including all Etsy fees broken out separately.

You see exactly what you paid in listing fees, transaction fees, payment processing, and offsite ads for each sale without manually calculating anything.

Other key features include:

• Automatic fee tracking: Breaks out all Etsy fees separately so you see the true cost of selling on Etsy
• Real-time profit margins: Calculates actual profit by product instantly instead of waiting until tax season
• Multi-channel consolidation: Syncs Etsy, Amazon, and Shopify sales into one accounting system
• Zero manual data entry: Automatically syncs every order, refund, and expense to QuickBooks or Xero
• Instant pricing insights: Shows which products make money in real time and when to raise prices​​​​​​​​​​​​​​​​

Sporting goods retailer Bases Loaded reduced order processing time from four minutes to zero after implementing Webgility across multiple sales channels.

The ecommerce automation freed up hours previously spent on manual data entry.

When they started with Webgility, Bases Loaded generated approximately $1.9 million in revenue, but after implementing automation they grew to over $5.5 million and now process over 10,000 online orders monthly.​​​​​​​​​​​​​​​​

Schedule a demo with Webgility today.

Frequently asked questions (FAQs)

How do I know if I am charging enough on Etsy?

Calculate your minimum price using the profit-first formula. Add your desired profit, all costs, and every Etsy fee to ensure your price covers everything and meets your profit goal.

Are there any Etsy fees I might be missing?

Yes. Many sellers miss offsite ads fees, currency conversion charges, and shipping label markups. These can significantly impact your profit if not included in your pricing.

What is the best way to track profit if I sell on multiple platforms?

Automation is the most reliable way. It tracks all fees and costs in real time, giving you accurate profit data across Etsy, Amazon, and other channels.

How often do Etsy fees change?

Etsy updates its fee structure periodically. Staying informed and using automated tools helps you keep your pricing and profit calculations up to date..