How to Price Your Etsy Products: Fees, Costs and Real Profit

Many Etsy sellers set a price by looking at what similar items sell for and then lowering it a little. The problem is that your costs are not the same as theirs. If you do not know what a sale really costs you, a price that looks fine can leave you with almost nothing, or even a loss, once fees and shipping are taken out.

This guide shows how to build a price from your actual costs. It explains the kinds of fees Etsy charges, gives a worked example with clear assumptions, and lists the mistakes that most often hide a poor margin. Fees and rates change over time and differ by country, so check Etsy's own fee pages for the current figures before you rely on any number here.

Step 1: Know all your costs

List every cost for one item. It is easy to forget the small ones, and together they add up.

• Materials, including the small parts such as thread, packaging tape and labels.
• Packaging: box or envelope, filler, a thank-you card.
• Your time, valued at an hourly rate you would actually accept.
• Equipment and tools wearing out, if you use them heavily.
• Shipping that you pay, if you offer free shipping or a flat rate.
• Any app, printing or platform subscriptions you pay for the shop.

If you make items in batches, divide the batch cost by the number of items. If you buy materials in bulk, use the cost per item you will really use.

Step 2: Count Etsy's fees

Etsy charges several fees. The names and amounts can change, so confirm them on Etsy's fee page. In general a seller can expect these kinds of charges:

• A listing fee, charged when you publish or renew a listing.
• A transaction fee, which is a percentage of the item price and the shipping you charge.
• A payment processing fee, which is a percentage plus a small fixed amount per order and varies by country.
• Fees for optional services such as Etsy's advertising, if you use them, and an extra charge on sales that come from its offsite advertising in some cases.

Because some fees are charged on the shipping you collect as well as the item price, free shipping does not remove them. If you build shipping into the item price, the fee percentage applies to the bigger number.

Step 3: A worked example

This example uses made-up round rates only to show the method. Do not copy the rates; use the current ones.

• Item: a hand-poured candle.
• Materials and packaging: $4.00.
• Your time: 15 minutes at $20 an hour, so $5.00.
• Shipping you pay: $4.50, charged to the buyer as $4.50.
• Assume a transaction fee of 6.5%, a payment processing fee of 3% plus $0.25, and a listing fee of $0.20.

Suppose you price the candle at $16.00 plus $4.50 shipping, so the buyer pays $20.50 in total.

• Transaction fee: 6.5% of $20.50 is about $1.33.
• Payment processing: 3% of $20.50 is about $0.62, plus $0.25, so about $0.87.
• Listing fee: $0.20.
• Fees total about $2.40.
• Costs you pay: $4.00 materials and packaging, $5.00 of your time and $4.50 shipping, so $13.50.
• Left after fees and costs: $20.50 minus $2.40 minus $13.50 is $4.60.

That $4.60 is your profit before any tax and before advertising, and it is about 22 percent of what the buyer paid. If you had not counted your time or the fee on shipping, you might have believed the profit was much higher.

Step 4: Decide the margin you need

Decide in advance how much you want to keep after everything. A margin is the profit divided by the price. A low margin leaves nothing for slow months, returns, a broken tool or a sale. A reasonable target depends on your product and your goals; what matters is that you choose it on purpose rather than finding out afterward.

To find a price that gives a target margin, work backward: add your costs, add the fixed fees, then divide by one minus the fee percentages and your margin. This is easier with a calculator. Our free Etsy fee and profit calculator does it for you and shows the price to charge for the profit you want.

Step 5: Check the price against the market

Only now look at what similar items sell for. If your price is much higher than comparable listings, ask whether your photos, your materials or your brand justify it. If it is much lower, check whether you are leaving money on the table. Do not lower your price below a level you can sustain only because someone else did. A shop that sells fewer items at a healthy margin often does better than a shop that sells many items at a loss.

Common mistakes

• Leaving out your own time, so the shop seems profitable but pays you nothing for the work.
• Forgetting the fee on shipping, or offering free shipping without raising the price.
• Running a sale without checking the new price still covers your costs.
• Pricing a digital product at almost nothing because there is no material cost. Your time designing it, the tools you use and the support you give are still costs.
• Never revisiting prices when your materials or the fees change.

When a higher price is the right answer

If you sell well but feel overworked, or if your margin is thin, a higher price may help more than a new listing. Raise the price of your bestseller by a small amount, watch the sales for a few weeks, and see whether the number of orders falls enough to matter. Buyers often care more about photos, reviews, quality and fast delivery than about a small price difference. Test one change at a time so you can tell what caused the result.

Review your prices on a schedule

Set a reminder to review your prices every few months, and whenever a supplier raises a price or the fees change. A small change in the price of a bestseller can matter more than ten new listings.