How Etsy shipping affects profit
Buyer-paid shipping is not automatically profit. Add it to the order amount, estimate the transaction and payment fees charged on that amount, then subtract the shipping label and packaging you pay. A free-shipping offer removes the buyer-paid amount but leaves the label cost, so compare both scenarios before changing a listing.
How to calculate Etsy seller income and net profit
Etsy revenue is not take-home income. To calculate your real Etsy seller income per order, use this formula:
Etsy Net Income = Gross Order Revenue - Product Cost (COGS) - Shipping Label & Packaging - Etsy Listing/Transaction/Payment Fees - Offsite Ads (if applicable)
For example, if you sell a craft item for $35 with $5 buyer-paid shipping ($40 gross revenue), $10 product cost, $6 shipping label, $1.25 packaging, and $4.25 total Etsy fees, your actual Etsy seller take-home income is $18.50 (a 46.2% net profit margin on gross order revenue).
Fixed shipping vs Etsy calculated shipping
With fixed shipping, you choose the amount a buyer sees. With Etsy calculated shipping, eligible sellers can have Etsy generate buyer shipping costs from the origin, destination, package size, and weight. Use this tool after you have a shipping amount and expected label cost; it does not replace Etsy's rate lookup or quote a delivery date.
Does Etsy charge fees on shipping?
Etsy's Fees and Payments Policy states that its transaction fee applies to the displayed listing price plus shipping and gift wrapping. Etsy Payments processing can also apply to the total sale amount, including shipping. Confirm your country and account-specific terms before relying on a rate.
What should sellers include?
- Actual label or carrier cost, including surcharges.
- Packaging, inserts, and postage supplies.
- Buyer-paid shipping and any shipping discount.
- Platform and payment fees that use shipping in their fee base.
Use a live rate source before listing
For eligible US and Canada sellers, Etsy explains how calculated shipping works. Etsy's separate shipping-cost calculator can help research available services, but Etsy notes that displayed rates are for reference and can change.