Starting a small business is obviously a roller coaster, so let’s talk about what I’ve learned about shipping. Although I am very much an amateur in the small business community some may call it a side hustle but I’d rather poor the energy out there that it is a small business. Either way let’s not get off track, being an amateur means learning as you go and while some may decided to skip past the icky parts I would rather document my journey to help others. Also it doesn’t hurt that sometimes mistakes can make amusing stories too.
While I do not have a “successful” Etsy shop yet I have been learning as I go. At this stage I am learning a lot so rather than be ashamed of having the few orders I do I decided it was the perfect time to share my knowledge to help other new Esty shop owners or those curious as to if Etsy is a good place for them to sell their crafts. In the video today it showcases how I package an order which in itself is always fun to see how people do it and what they include in their packages. Also discussed today is the actual stats for this listing meaning what the profit margin is as well as where the rest of the money actually goes when selling on Etsy. Shop owners usually say that they are “successful” and that Esty takes a portion of the money but I’ve yet to see someone share the raw data. I know I was curious before opening up my shop and yes Etsy gives a full description and calculator on its site, however, I did not find it helpful or accurate. It is very misleading which is why I am breaking it all down for you so you can do the math to figure out how to properly list your items.
Stats Cheat Sheet
- Listing Fee: $0.20
- Relisting Fee: $0.20 * They will charge a $0.20 relisting fee to change the stock number to the next digit and keep the item listing for sale.
- Shipping Label: Depends on the weight and size of the product and will not effect your profit unless you are offering free shipping. The label is added into the order total which is added in through the processing fee.
- Processing Fee: 3.0% of the order total plus $0.25
- Transaction fee for Shipping: 6.5% of shipping total
- Transaction Fee for Product: 6.5% of item total
- Sales Tax: is collected from the buyer and does not effect your stats but is calculated towards the processing fee since it is down with the order total.
*The simplest way to calculate your portion is to calculate 78% off your listing price. Yes that means the other 22% goes stickily to lovely Etsy fees. Keep in mind this is a rough estimate to simply help guide you to create your proper pricing. From the 78% you will also need to dive in a little further by subtracting all material costs. Next subtract your personal labor cost and then you will have your profit total.
Example: A handmade blanket listed for $50 without free shipping. The item cost $7.95 for the customer to ship to their residence and the tax rate is 7.5%. The customer paid $61.75 total.
|Fee||Fee Amount||Running Total|
|Processing Fee: 3.0% of the order total plus $0.25||$1.85 + $0.25 = $2.10||$59.65|
|Transaction Fee for Shipping: 6.5% of shipping total||$0.52||$51.18|
|Transaction Fee for Product: 6.5% of item total||$3.25||$47.93|
|Listing Fee: $0.20||$0.20||$43.98|
Let’s break down our profit into our expenses.
|Material Cost||$12.00||Fabric Cost|
|Labor Cost||$15||Your Portion|
|Retail Price||$50||Listing Price|
|Profit||$16.98||Back into business|