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Curious about the costs of starting an Etsy shop? Let’s break it down:

Etsy Fees:

• Listing Fee: $0.20 per item for 4 months, charged every time you list or relist an item.
• Transaction Fee: 6.5% of the order total (including shipping and gift wrapping).
• Processing Fee: Varies by country, but in the US it’s 3% + $0.25 per transaction.

Example:

• Item Price: $25
• Shipping Cost: $5 (paid by customer)
• Total Fees: 9.5% + $0.45 per sale
• Calculation:
• Shipping: $5
• Transaction and Processing Fees: $2.85 (9.5% of $30) + $0.45 = $3.30
• Total Fees: $8.30
• Take Home: $30 - $8.30 = $21.70 (about 72% of the total)

Other Expenses:

• Labor
• Materials
• Equipment
• Shipping supplies
• Taxes

Advertising Costs:

• Etsy Ads
• Offsite Ads

Importance of High Profit Margins:
Starting with high profit margins is crucial to cover additional costs.

Example:

• Selling a shirt:
• Blank cost: $8
• Shipping supplies: $2
• Advertising: $5
• Other expenses: $15
• Total Costs: $23.30
• Take Home: $30 - $23.30 = $6.70 (22% profit margin)

Final Thoughts:
While starting on Etsy incurs about 10% in fees, it’s a trade-off for access to millions of potential buyers. For comparison:

• Shopify: 2.9% + $0.30 per transaction
• eBay: 6-15% depending on the category
• Amazon: Average 15%, can be up to 45%
• Poshmark: 20%

Starting on Etsy can be cost-effective with careful planning and high-margin products. Stay tuned for more insights!

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