If you don’t know me by now, you should know as a business owner, I am not a fan of etsy. While this is a whole topic on its own with a long list of pros and cons (mostly cons), I wanted to discuss the difference in Fees between Etsy and Shopify - while there are some outside factors that can affect these, let’s chat.
First let’s talk about all of the Etsy Fees - Information straight from the Etsy Handbook:
First there are Listing Fees. Now originally I thought the listing fee was a one time fee for listing product and then renew when you are out of stock. I was wrong, while 20 cents is not a lot, it is 20 cents every time your item lists and sells. So if you have a quantity of 20 of one product, every time someone purchases ONE item, you will get charged the 20 cents. Now if you sell items, that can come in multiple quantities, you can avoid getting hit with the listing fees by creating a variation option by doing 1, 5, 10, etc of that item. So if someone wants to purchase 5 of that item, instead of being charged $1 in listing fees, you can have a variation option for that product of quantities, and only be charged 20 cents.
Next, Transaction Fees. Transaction fees are 5% of your total item cost. So whatever price your item is listed as, 5% of that will go back to etsy.
Next is the Shipping Transaction Fee. Shipping Transaction Fees are 5% of JUST the shipping you are charging the customer. YOU, as the seller, pay that fee, not the customer. This, in my opinion, is one of the ways to push people towards offering free shipping.
“Finally”, there is a Payment Processing Fee. Everywhere you go that takes cards, whether in person or online, the seller gets charged a payment processing fee. For Etsy in the U.S. it is 3% + 25 cents. The customers total payment that is processed gets charged this fee.
Now I put finally in quotations, because there is an additional fee you may have not known about it. Let’s talk about Offsite Ad Fees. What are offsite ads? Let’s look at Etsy’s handbook explanation:
Etsy advertises listings throughout the web, including in search engine results, social media sites and apps, Etsy Publishing Partner sites, and Google Display Network sites. . Etsy offers this service with no upfront costs to you: you only pay an advertising fee when you make a sale.
Your listings may be included in these advertisements. Etsy may at our discretion automatically advertise your listings with our partners.
Offsite ads may be optional for your shop, depending on the revenue you’ve made on Etsy in the past 12 months.
Basically, Etsy can choose to advertise any of your products, and if someone clicks on it, then proceeds to purchase it, you will get charged an additional fee.Not only that, but this keeps cookies on the person’s browser, so if they click look, and leave, then come back to your shop within 30 days and purchase an item, you can still be hit with that fee. This also means if they purchase an item, come back and purchase another item, the fee can still apply.
Can you opt out of Etsy Offsite Ad Fees? Yes and No.
If you have made less than $10,000 in sales in the past 365 days on Etsy, then you are automatically added but you are able to opt out of Etsy Offsite Ads.
If you have made more than $10,000 in sales in the past 365 days on Etsy, you are automatically in enrolled in Etsy Offsite Ads, and you cannot opt out, at all, even if your shop eventually makes less than $10,000 in sales in a 365 day period.
Etsy will do a monthly review of your shop and once you hit that threshold, it’s required participation for the lifetime of the shop.
Now how much does it charge you? Well,... in addition to the fees Etsy already charges you, if you are participating and have made less than $10,000 then you are charged a 15% fee. If you are making more than $10,000 then you are charged a 12% fee.
Now that we have discussed etsy fees, let’s look at Shopify fees.
Shopify has their monthly fee based on the plan that you choose. The Basic Shopify plan charges a flat rate of $29 a month. Regardless of whether you sell any items or not, you will have to pay this fee. The Shopify Plan charges a flat rate of $79 a month.
Each plan has their own payment processing fee “credit card rate”. The Basic plan charges 2.9% + 30 cents and the Shopify plan charges 2.6% + 30 cents per transaction.
Now, Shopify has additional apps that you can add to your shop that may or may not charge their own fees. These will not be discussed in this blog because there are so many apps, and each one varies and is different.
Shopify vs. Etsy: Real Life Examples of Fees
Let’s look at some real life examples. I am going to take my first month’s sales on Shopify from March 2020 and show you the fees I paid Shopify, versus the fees I would’ve had to pay if I sold through Etsy.
Total Sales: $532.06
Net Sales: $456.06
Total Orders: 16
Total Products Sold: 34
Shipping Costs: $51.93
Shopify Fees: $29 + [(2.9% x 532.06) + (30 cents x 16)] = $49.23
Etsy Fees: (20 cents x 34) + (5% x 532.06) + (5% x 51.93) + [(25 cents x 16) + (3% x 532.06) = $55.96
While $6.73 may not seem like a huge difference in fees when you’re first starting out, but over time, and as you receive more orders, this can add up.
Actual Etsy Stats from an Etsy Shop compared to fees they would have paid if they had a Shopify.
Our next example will be an actual etsy shop who was kind enough to share with me her stats from etsy so I could use them to compare. In this example I will refer to the shop as “Example Shop”.
Month (March 17 - April 15 2021)
Total Sales: $10,280.60
Listing Fees Paid: $47.80
Marketing Fees Paid: $63.00 (Etsy Offsite Ads)
Total Shipping Costs: $1602.28
Total Orders: 168
Shipping transaction fees are not considered because Example Shop offers free shipping so their Shipping Costs come from Pirate Ship.
In total, Example Shop paid $640.03 in fees to Etsy.
If Example Shop had used Shopify they would have paid:
Basic Plan: $29 + [(2.9% x 10280.60) + (168 x .30)] = $377.54
Shopify Plan: $79 + [$317.68] = $396.68
That is $207.35 to $262.49 of additional fees paid to etsy. Not even counting the fact that Example Shop paid $1602.28 in shipping costs out of pocket in order to offer free shipping in their shop to stay competitive.
Example Shopify Shop to compare what Seller would’ve paid in Etsy fees had they sold on Etsy instead of Shopify.
(In this section this shop will be referred as Shoppy)
Total Sales: $4661.30
Total Products: 1253
Shopify App Fees: $29.88 in Monthly App Fees
Shopify Plan: $79 a month
Total Shopify Fees for January 2021: $284.07
Etsy Fees: (1253 x .20) + (364.02 x 5%) + (4661.30 x 5%) + [(3661.30 x 3%) + (180 x .25)] = 250.60 + 18.07 + 233.07 + 45 + 109.84 = $656.58
That is a $372.51 difference, and does not even include if any of these orders would have been from Offsite Ads and taken 12% in addition to the fees charged.
While I do know that there are pros and cons to Etsy and Shopify - this blog was strictly about the fees involved and not other factors. Many people do not consider the fees and believe that a website is much harder to drive traffic to. That is a topic for another day.
Please leave any comments or questions below!