Cost of Selling Items on Etsy 2021: How Payment Works // Full Explanation with Example! 💰

hello it's aurete here welcome to another video on the estatino artist channel where we share all kinds of tips related to helping you grow your creative business online so in today's video we're gonna look at the cost of selling on etsy i feel like i've kind of been chosen to do this video every single year because i have released a 2020 version i released before that 2019 version and every single year you guys are loving it you're letting me know in the comments that it's really been helpful so i decided to do an updated version here for 2021. so in this video we're going to look at how you get paid on etsy the different ways to get paid we're going to look at all of the fees we're going to look at what those fees are when you are starting your etsy shop and what to be aware of and we're going to look at an example together so that you can see how these fees apply when they're in action when you sell a product in your store okay so let's dive in first thing i want you to know about is how you get paid on etsy because this is going to play into the fees that will that you'll be charged so there's two ways to get paid on etsy two ways to receive payments from your stores when a buyer purchases a product the first way is through etsy payments now etsy payments is kind of their own internal payment processing system where buyers have a whole bunch of options in terms of paying you for your product in your store and it's all processed within etsy so it's the primary way to get paid on etsy and it kind of puts all of these different payment methods like you see they can pay with credit card debit paypal apple pay all of these things over here just through the etsy payment system so when you're enrolled in etsy payments your buyers can choose to give you money through any of these methods now the second way to get paid on etsy is through paypal so you're either going to receive the money from etsy payments processing system or from paypal when do you use etsy payments when do you use paypal you are actually required by etsy to use their payment processing system if you fall in any of the eligible countries so if you are in any one of these countries listed over here then you're required to use etsy payments so you can't i'm in canada so i have to use their etsy payment system and there are fees associated with that which we'll get into in a second and a question that i got on one of the previous versions of this video is if i'm on this list do can i use the paypal processing system can i just you know receive payments directly from paypal from my buyers and the answer is no you can't so you have to use etsy payments you can't only integrate paypal as a your main method for receiving payments the thing is paypal is a part of etsy payments so your customers can choose to pay for your items if they have a paypal account they want to pay with paypal they can do that even though you're enrolled in etsy payments and you'll still receive the money that way another question i had was if i'm using etsy payments do i still get charged the paypal processing fees if the buyer pays with paypal and the answer is no so etsy payment takes care of all of that you don't have to pay any extra paypal fees associated with that transaction but you do you will be paying etsy payment fees and again we'll talk about that in a second so like i said i'm in canada i have to use etsy payments the us which i know most of you are watching from is also over here if you are not on this list then that means you will be using paypal so you'll be integrating a paypal your paypal account into your etsy shop and that is how buyers will be able to get give you money now there's another thing to keep in mind with etsy payments and and by the way guys everything every article that you see here i'm going to link to all of these below in the description so you can always refer back to them because there's always these if ands or buts etsy loves doing those so um so let's say you are eligible for etsy payments you just want to still come down here to this article because there are certain countries where there's um you just need to be be aware of this information like for example if you're located in israel paypal isn't currently available to etsy sellers in israel so just be aware that your buyers israel by the way is on this eligibility list so you will still be able to use etsy payments but you just won't have that option your buyers won't have that option to use paypal to give you money so there's just these little things that you can come in here and read but those are the major things that you need to be aware of okay so we talked about the different ways that you can get paid either through etsy payments and if you're on this list of countries you have to use the etsy payments processing system or through paypal if you're not on this list what are all the fees associated with selling on etsy so let's take a look at that and we'll also take a look at the etsy payments fees and how that all works i think the best way to explain this and i did this in my other videos as well you guys really appreciated the visualness of my explanation so we're gonna still be doing that today and i mean i'm a very visual person so i find it easier to actually see the information on screen so let's first list off all of the fees and i'll explain what they are and then we'll go into an example together so the first fee that you need to be aware of is the listing fee all right so the listing fee is 20 cents and this listing fee is basically whenever you create a listing in your etsy store you will be charged a 20 cent fee so in order to have your product listed up on etsy you'll be charged 20 cents to have that that product up on there on your store now unfortunately it's not 20 cents for the lifetime of that listing being up in your store you're actually paying 20 cents to have your listing up on your store for four months so this is only for four months and once those four months are over your listing will be taken down and you'll have to pay the 20 cents again to have that item relisted there is there's two options you could do you could do like an auto renew so so that you don't have to keep coming back and put your listings back up live so there's an option to do that in which case every four months that listing will automatically renew to stay up on your store and you'll be charged 20 cents but there's also a manual option so if you want to be aware of the listings that have expired and then you can come and review them and see whether or not you want to list them up in your store again then you can do that as well you can set it to manual and then after four months that listing will be taken down from your store and then you can review them and decide whether or not you want to pay 20 cents again to have that relisted so that's the listing fee the second fee is the transaction fee all right so your transaction fee is going to be five percent off of the retail cost of the item as well or the retail price of the item as well as the shipping cost it's basically five percent off of the retail price as well as the shipping price that the buyer paid so i'm just going to put that here so that we're aware of it it's not just off of the retail price so retail price plus shipping price whatever they paid it's going to be five percent off of that uh and again we're going to go through an example i'm going to show you with actual numbers what this looks like so you can better understand it the next few you need to be aware of is called the auto renew sold fee now it's a weird name and that as well is 20 cents so what the auto renew fee is is it's kind of similar to the listing fee in that if you have an item that you listed with multiple quantities so let's say you're selling a t-shirt you listed that up in your store you have 20 of those in terms of quantity so you put quantity 2-0 when someone buys that t-shirt let's say they buy one t-shirt from you you'll still have 19 left up in the store so in order for that listing to stay live once they've purchased then you will be charged a 20 cent fee it's kind of like a version of the listing fee in order for that listing to stay live because you have extra quantities still available and you want that listing to remain live in your store you're going to be charged 20 cents when that customer buys if you only had one quantity of that item so you only had one shirt you had one quantity and the customer bought that shirt from you so your quantity goes down to zero you won't be charged the 20 auto renew fee because there's nothing to renew there's nothing for that listing to stay live you've already used all that quantity so then that listing will be taken down and then you can decide whether or not you want to you know adjust the quantity or switch it out for uh to pay a new 20 cents for a new listing so that's the auto renew sold fee and i know it's kind of like how do they think of these fees i don't know um but that's auto renew so the next one is multi quantity fee but wait there's more there's lots more unfortunately and you're probably some ice i know some of you are going to be watching this video and you're like this is this is too much i'm out of here i'm not starting an etsy store and um yeah fair enough makes sense but uh for those of you who want to stick around so the next fee that i want to share with you is a multi-quantity fee so this fee is removed when a buyer buys more than one of your item so let's say you have an item you've listed it and uh your buyer bought three of those so for every additional item that they've added for every additional quantity above one that they've added you will be charged a 20 cent fee once again so the multi-quantity fee applies for each additional item sold from that same listing so if your buyer bought three let's say going back to that example they're gonna you're gonna be charged 40 cents because it's 20 cents for item number two from that same listing and then 20 cents for item number three from that same listing if they bought four quantity of that same item then each additional quantity there's there's two three four so there's three more so three times 20 cents is 60 cents you'll be charged 60 cents because they purchased four quantities of that same listing so hope that's making sense um so that's the multi-quantity fee the next one that i want to share with you is etsy payments fee so this is the fee associated with you using the etsy payments processing system so again if you're on one you're in one of those eligible countries you're required to use etsy payments and the fee is actually it's gonna vary uh just to make things a little bit more complicated which etsy loves to do it's gonna vary depending on where where you're from so how do you know what that fee is depending on what country you're in i'm going to put again this this article here is going to let you know i'm going to list put it in the description so you can always refer back to it the fees are all listed out here so if you're in the states let's just scroll down here the fee the etsy payments fee for you will be three percent and that's off of the the total order amount so that's going to be the price that your buyer paid plus the shipping that three percent is gonna come off of that so for you it's going to be three percent off of that amount plus 25 cents uh because i'm in canada it's a little bit more complicated um for me i have two different things here if if my buyer is in canada or from the us then my etsy payments fee is three percent uh plus 25 cents canadian but if my you know if i have a customer in the uk or johannesburg south africa let's say um then my etsy fees is going to be etsy payments fees is going to be four percent off of that amount plus 25 cents canadian so you want to come here you want to take a look at what your etsy payments um fee is i'm gonna just use the the us like i said i'm i'm in canada but i'm just gonna use us just because we're gonna go through an example together and all of these fees are in u.s dollars so just be aware of that all these fees are in u.s so you know if you're in canada it'll actually be more than 20 cents because it'll be converted to canadian so i just want to keep everything um consistent here and just easier to follow so i'm just gonna do this so that we're there in the us and i know most of you are watching from the states so um okay so that's the etsy payments fee now these are the main fees the primary fees that you will see in your store in the back end when you check your dashboard there are other fees as well though so keep in mind some of the other fees are you might have currency conversion you might have like vat taxes there's shipping labels there's etsy ads there's etsy off-site ads i know some of you are going to get scared away by all of these um and then of course there's the actual cost of you making the item etc so you want to take all of these things into account i don't want you to be left in the dark i want you to be profitable and i want you to go into starting an etsy store knowing all of this information so that you will be profitable so these other fees that you see here um i'll just quickly go through them um currency conversion fee if your store is in a different currency than your the currency of your bank account then you're going to be charged a currency conversion fee by etsy to convert that amount that came into your store into your bank account currency so that fee is 2.5 and so for example you know i'm in canada and initially when we first started on etsy um because most of our customers are in the on in us we had our store in us that was our shop currency but our bank account is in canadian dollars and so we were being charged 2.5 percent on all of that money that was coming in just for the currency conversion so we actually changed it back to uh we changed our shop currency back to canadian so that we can avoid that currency conversion so that's something to be aware of and actually did a whole video on that as well on why we changed our shop currency and i'll link to that video in the description so you can check it out if you're interested now vat taxes we're not going to go too much into that um because it varies obviously by country by state by province and honest to be honest i you know i don't know too much about that um that's to do with the uk and everything so just do your due diligence be aware of the taxes and also or vat if that applies to you shipping labels uh completely optional if you want to opt in to etsy's shipping labels program which is just basically instead of going to the post office to have them create that postage and that shipping label for you you can have it all done on etsy so etsy will take care of the postage for you they'll give you this thing to print out and you just stick that label on your package before you send that out to your buyer so it's ready to go the postage is paid they have a bunch of carriers that they work with so again if you are using etsy shipping labels then that there's a fee associated with that and that will vary but you can also just you know sell your product and then you just package it up and then go to the post office and they will take care of those postage fees all right next etsy ads um again this is going to be only associated with with you or only applicable to you if you are using etsy ads so you can promote your listings within etsy so that they show up at the top of the search and in other places on the etsy website so that you can get more exposure so beware of that if you're paying for etsy ads and then also there's etsy off-site ads so so far all of these things well besides taxes are kind of optional but etsy off-site ads if you are making more than ten thousand dollars within the last year so if you're if your shop has made more than ten thousand dollars within the past 365 days you are required to be entered into this etsy off-site ads program and what that basically is is that etsy puts up all of the costs to promote or to advertise your listings on google bing pinterest facebook instagram they're promoting your listings so if a sale happens through one of their off-site ads if you make a sale through their offsite ads then you're charged a fee associated with that and the fee is either like 12 or 15 depending on how much you've made so just be i'm just going to put 12 15 percent if you've made less than 10 000 and i think this is where most of you will be you've made less than ten thousand dollars in the past 365 days then entering into etsy off-site ads is completely optional you can decide whether you want to enter into that if you do make a sale through etsy off-site ads then it'll be 15 as a fee but just note that this isn't taken off of every single item that sells in your store it's only applied to the orders or the sales made from the off-site ads and again if you've made more than ten thousand dollars in the past 365 days then you are required to use this and any sales made from that are is going to be 12 that's your fee so those are the most most of the fees to be aware of guys there is like as well if you're in um if you're part if you have the etsy plus subscription so be aware of that if you've entered in in a subscription with etsy you'll be paying monthly for that those are the the main things that i wanted to go over with you so let's go through an example together to see these fees in action so again i'm just going to be looking at these fees here and so our store sells t-shirts i design i create the the different designs in photoshop and then we upload those designs and then they get printed on t-shirts and other merchandise let's just assume that the product we have here in question is a t-shirt all right so in order to list this t-shirt i'm going to be paying a listing fee in order to have this listed up on the site on etsy so i'm going to just put here 20 cents for that listing fee now when someone buys my t-shirt so someone has come to my etsy store they've discovered my listing they purchase a t-shirt from my store i'm gonna be charged five percent so let's just say uh let's go back to black here let's say that this t-shirt i'm selling in my store for twenty four dollars and then um my shipping is five dollars just for the sake of simplicity guys um if there's going to be a five dollar flat rate shipping fee which we're just gonna assume that all of that five dollars is being go straight into shipping costs so the buyer has actually paid twenty nine dollars and again for the sake of simplicity um i'm not going to go into taxes or anything like that let's just assume that they paid 29 and in a perfect world that would be tax-free so okay so i've paid 20 cents to list it up my transaction fee now will be five percent off of this 29 so let's grab a different color here orange for transaction fee so we're going to do 5 of 29 is screw the dollar sign just go 1.45 so that's my transaction fee that i'm being charged now if you remember the auto renew sold fee applies to if i have extra quantities still available after that that item was sold then i'll be charged 20 cents again to have that item remain listed in my store so because you know our our designs are all print on demand meaning if the buyer makes a purchase the product or the t-shirt is only printed once they make a purchase and that gets sent directly to the customer so when we list our listings we actually put like 900 for quantity because it's unlimited it's we don't hold any physical inventory here so because i have extra amount available after that item has sold then i will also be charged that auto renew sold fee and that will be oops 20 cents okay multi quantity fee so let's say our buyer has only purchased um one they've only purchased one t-shirt so i'm not going to get charged the multi-quantity fee but if they did purchase two then i will be charged an extra 20 cents if they purchased three of the same t-shirt then i'll be charged an extra 40 cents and so on so just keep that in mind all right etsy payments fee let's use blue for this one so because um i'm in canada you're in the states we have to use etsy payments and that fee that we're going to use in this example is this 3 plus 25 cents so that three percent is going to be taken off of this amount 29 and let's calculate that so that's 29 um times 3 percent is cents let's do 87 cents and then plus the 25 cents right here okay all right well that's a disgusting five but let's go with it all right so these are all the fees that we have talked about up here um just again for simplicity i'm not looking at taxes i'm not looking at currency conversions i'm not using shipping labels or doing any ads so let's add up all of these fees that we have here and let's see what we got in terms of fees what the total is so that's 20 cents plus 145 plus again 20 cents plus 87 plus 25. our total amount in fees that we're paying is 2 let's make that look better two dollars and ninety seven cents all right so that's how much i'm paying in fees after this buyer has purchased one shirt from my store so if i minus this amount here from the retail price um i'm not going to minus it from 29 because again we're assuming that this five dollars shipping fee is just it the five dollars is all going to shipping cost i'm not seeing that amount so let's just say 24 minus 2.97 so what's left over is twenty one dollars and three cents all right so it's important to keep in mind that this necessarily isn't my profit because yes we've removed all of these fees by etsy but you know i still have to remember the cost associated with that product you know i have costs of my own labor cost to design the the design also to purchase this shirt which itself might be like seven dollars for example so 21-7 you get the idea so just be aware of these other costs that are associated again i'm filming this video because i want you guys to be profitable and to make the right decision to know whether or not selling on etsy is right for you so i hope this has been helpful for you guys in understanding the cost of selling on etsy please let me know what you think give this video a thumbs up if you found it helpful leave me a comment down below and subscribe to the channel as well i'm gonna link to other related videos in the description below like how to calculate shipping in order for you to be profitable i have separate videos on that on the currency conversion so i'll put those related videos in the description along with the articles that we talked about so you can always go back to them thank you guys so much for watching and i will see you in the next video bye

Channel: Essetino Media - Create Profitable Content

Views: 11,617

Keywords: cost of selling items on etsy 2021, cost of selling shirts on etsy, etsy payments, cost of selling items on etsy, how etsy payments work, what is etsy payments, how you get paid on etsy, selling on etsy 2021, how much does it cost to sell on etsy, how much does it cost to start an etsy store, etsy fees explained, cost of starting an etsy shop, #essetinoartists

Id: Swxl8Te0YqU

Length: 27min 45sec (1665 seconds)

Published: Mon Feb 15 2021