Selling digital products on Etsy might sound like a great way to earn some extra money, but how much does it actually cost? In this post, we’ll talk about the different Etsy fees and how to take them into account in your pricing.
How much does Etsy charge to sell digital products?
Etsy charges digital product sellers just as much as it charges physical product sellers with the difference that you never have to worry about postage or gift-wrapping when you sell digital products. Here are the fees that you need to pay Etsy if you want to use their platform:
Set-up fee
This is actually a new fee and it’s there to deter scammers and other low-effort sellers. (With the “help” of AI, there are a lot of them these days. Thanks a lot, AI developers.)
The set-up fee is currently $15, or whatever it will be when converted into your currency. It first appears as a pending transaction on your bank account, and once your set-up is finished and you’re ready to sell on Etsy, the transaction will be processed. The fee is non-refundable.
Some people might think it’s unfair to ask for a set-up fee, but what do you get for free anyway if you want to sell somewhere? For example, I invested in ThriveCart last year which enables me to host and sell my digital courses and products without having to pay fees to anyone else and it has cost me around $700 without counting the taxes. $15 is pretty tiny in comparison!
Listing fees
Whenever you publish a new listing or renew an existing one, you need to pay $0.20.
Etsy listings expire after 4 months, and if you have auto-renew on for the listing, you’ll get charged another $0.20 for the renewal. Whenever someone buys one of your products, that also counts as a renewal and you’ll pay $0.20 while also expanding that listing’s age with another 4 months.
Transaction fees
At the time of writing this, the transaction fee on Etsy is 6.5%. That means that whatever you’ve priced your product, Etsy will take 6.5% off the price before it transfers the money to your payment account.
Payment processing fees
If you use Etsy payments, you’ll be charged a small processing fee for each transaction and the fees vary depending on the location of your bank.
Regulatory operating fees
Regulatory operating fees are a fairly new thing and they ensure that Etsy can offer services to sellers in certain countries despite the increased cost of following the regulations in those countries. In short, blame your country, not Etsy! These fees are currently applicable to sellers in the United Kingdom, Canada, France, Italy, India, Spain, Turkey and Vietnam.
Currency conversion fees
If your payment account is in a currency other than USD, Etsy will charge a currency conversion for some of their fees. You also need to pay these fees if you list your items in a currency other than what your payment account is in. Wherever you’re shopping from, Etsy will convert the prices to the shopper’s currency, but fortunately the conversion fees don’t apply to this process.
Etsy ads and off-site ads
If you’d like your shop to get more visibility, you can choose to advertise your listings.
I did say “choose”, but if you’ve made more than $10K in the past 365 days like I have, you can’t opt out of off-site ads. They’re ads that Etsy places on other sites and you need to pay 15% for each sale you get through the ads, unless you’re one of the 10K people in which case you only pay 12%.
Etsy ads, on the other hand, are completely optional, and they help put your product at the top of (hopefully) relevant searches. You can start advertising your listings with as little as $1 per day and you only pay for clicks to your listings, not for the views. Personally, I’ve had varying success with Etsy ads, but it’s very easy to experiment with them and see if they work for you. You can also use ads to see what keywords people really use to find your items.
Etsy Plus and Pattern subscription fees
Etsy Plus is a subscription that earns you some extra features, listing credits and advertising credits, and Pattern is Etsy’s tool for making your own website for your shop. Both of these services are completely optional and you definitely might not ever need either of them. I’ve certainly never used them.
Taxes
Taxes are technically not Etsy fees but they’re still something you’ll need to pay when you’re selling on Etsy. For some cases, Etsy will collect and remit the taxes for you so the taxes that are added to your prices never actually touch your account. If you’re not using Etsy payments, you’ll have to do all that yourself.
Why does Etsy charge sellers so many fees?
Although there will always be Etsy sellers who complain about the fees, the reality is that they’re not a charity. Why should you get to use their service for free? Where would you go to not pay any fees at all?
No, I’m not always happy with Etsy’s decisions on many things, but that doesn’t change the fact that Etsy does A LOT for you. You could sell your products on your website, but WooCommerce, Shopify or ThriveCart are not free and neither is hosting your own website. Although I don’t have to pay ThriveCart anything after purchasing the licence to use it, I do have to pay Stripe and PayPal for the transactions.
Most of the time I’ve been selling on Etsy, I’ve brought about 50% of the traffic myself (through my blog or through Pinterest) and Etsy has brought the other half. That is literally what I’m paying for them. I give them money and they bring me traffic.
In short, Etsy is far from perfect, but they need to charge for their services just like anyone else. You’re not paying for nothing at all in return, but you can decide for yourself if they’re the right fit for your business.
How to make a profit on Etsy despite the fees
For a digital product seller, it’s so much easier to make a profit on Etsy than it is for physical product sellers who need to take into consideration the cost of creating their products every single time. When you make a digital product, you make it once and keep selling it forever, unless you decide to update it in the future.
If you have a shop full of very low-cost digital items, you need to have heaps of traffic coming into your shop to make a profit – and that’s even without considering the fees. I’m not saying don’t have any $1 items at all, just don’t have nothing but them because you need to make it worth it to you to make good-quality products. Working to get more sales becomes a lot less satisfying when you get nothing but pennies from each ka-ching.
Getting in front of people is the hard part so you need to consider how you get them to spend more while you’ve got their attention. You can combine multiple products into bundles and also encourage your customers to purchase other items, too. You can link to your other products in the description and you can mention relevant products in the listing images as well.
Learn to make money on Etsy with what you already know
So now that you know you can make a nice income on Etsy despite the fees, are you ready to start your digital product creation journey? I bet you are! In my course Earning With Educational Etsy Products, I help you find out exactly what you should sell, you learn how to create your products and how to get in front of the right people. I’m certain you have at least one skill worth teaching other people.
Anything you have experience in, whether that’s bookkeeping, organising, canning, knitting or grooming dogs, can be turned into MONEY when you make educational digital products and sell them on Etsy. Join us today and start making money on Etsy this month!