Why "cost plus a bit" fails on Etsy
Most Etsy fees are a percentage of the whole order (item price plus the shipping you charge), and the rest are small fixed amounts. Adding a flat markup to your costs undershoots, because the fees grow with the price. The fix is to work backward from the profit you want.
The formula
- Add your fixed costs: materials, packaging, the postage you really pay, and Etsy's fixed fees (the listing fee plus the flat part of payment processing).
- Add the profit you want per sale.
- Add up the percentage fees: 6.5% transaction fee, your payment processing %, your regulatory operating fee % if your country has one, and Offsite Ads (15% or 12%) if the sale may come from an ad. If you pay VAT on fees, multiply the percentages and the fixed fees by 1 plus the VAT rate.
- Divide the total from steps 1 and 2 by (1 minus the percentage fees). That gives the order total, item price plus shipping charged.
- Subtract the shipping you charge the buyer to get your item price.
Order total = (profit + materials + postage cost + fixed Etsy fees) ÷ (1 − percentage fees)
Example 1: US seller
Target profit $15, materials $10, postage $6 charged to the buyer at cost. Percentage fees are 6.5% + 3% = 9.5%, and fixed fees are $0.20 + $0.25 = $0.45. Order total = ($15 + $10 + $6 + $0.45) ÷ 0.905 = $34.75, so the item price is $28.75. Check: fees come to $3.75 and profit is exactly $15.00.
Example 2: the same product when Offsite Ads applies
If the sale comes from an Etsy-placed ad at 15%, percentage fees rise to 24.5%. Order total = $31.45 ÷ 0.755 = $41.66, so the item price is $35.66. That is about $7 more to keep the same $15 profit, which is why many sellers under $10,000 a year build the ad fee into their prices, since it is mandatory for them.
Example 3: UK seller with VAT on fees
Percentage fees are 6.5% + 4% + 0.48% regulatory = 10.98%, and VAT at 20% lifts that to about 13.18%. Fixed fees of £0.16 + £0.20 become about £0.43 with VAT. For £15 profit, £10 materials and £6 postage: order total = (£15 + £10 + £6 + £0.43) ÷ 0.8682 = £36.20, so the item price is £30.20. If you are VAT-registered and reclaim the VAT, use 10.98% and £0.36 instead.
Tips for using it
- Use the rates on your own Etsy fee statement, since fees change and vary by country. See the Etsy fees guide and the regulatory operating fee guide.
- Charge shipping at what you really pay, so the 6.5% fee isn't taken on postage you lose money on.
- Round up to a clean price after the formula, never down.
- Count your own time. If the profit target doesn't pay you for the hours, raise it. The freelance rate guide shows how.
Test a price in the Etsy seller profit calculator. It shows every fee and your final margin.
Last reviewed October 2026. Examples use published rates and are for planning; confirm figures in your Etsy payment account. See the disclaimer and methodology.