Quick Answers
The costs of setting up an Etsy shop can vary greatly depending on the type of products you plan to sell, but here are some quick estimates:
- Etsy listing fees: $0.20 per listing
- Etsy transaction fees: 5% of each sale price
- Initial inventory costs: $100-$500 to start
- Packaging supplies: $50-$200
- Office supplies: $50-$100
- Equipment (camera, computer, etc.): $200-$500
- Marketing expenses: $0-$500/month depending on effort
So you can realistically plan to spend $400-$1000 just getting started, not including ongoing monthly expenses for listings, transaction fees, and marketing. The more inventory you plan to carry, the higher your startup costs will be as well.
Selling handmade and vintage goods on Etsy can be an extremely rewarding endeavor for crafty entrepreneurs. With millions of active buyers searching Etsy every day, it provides a huge platform to turn your artistic talents or collecting finds into a thriving business.
However, as with starting any small business, it’s important to understand the costs involved with setting up an Etsy shop before diving in. Knowing what kind of expenses to expect will allow you to budget appropriately and give your shop the best chance of succeeding from the start.
In this article, we’ll walk through the typical costs associated with starting an Etsy shop, including:
- Etsy listing and transaction fees
- Initial inventory and packaging
- Equipment and office supplies
- Marketing and advertising costs
By getting a handle on these expenses, you can decide if selling on Etsy is the right retail channel for your business and make informed decisions as you turn your crafting into commerce.
Etsy Fees
The first set of costs to keep in mind are the fees charged by Etsy for listing and selling items in your shop:
Listing Fees
Etsy charges $0.20 to publish each new listing to the marketplace. This fee is per listing, not per item, so if you have 100 available quantities of a single necklace, you would still just pay $0.20 to list it once.
Listings are active on Etsy for 4 months, after which you’ll have to pay another $0.20 fee to renew the listing for a new 4 month period if you still wish to sell the item. There is no limit to how many listings you can create in your shop.
Transaction Fees
In addition to listing fees, Etsy charges transaction fees whenever an item sells. This fee is 5% of the total sale price, including shipping charges. For example, if you sell an item for $20 with $5 shipping, the transaction fee would be $1.25.
These fees go toward providing the Etsy platform that connects you with buyers, as well as for payment processing. They are deducted from your payment deposits automatically.
Pattern of Fees
So in summary, the ongoing fees for an active Etsy seller will look something like:
- $0.20 per new listing, renewable every 4 months
- 5% of transaction total every time an item sells
This means your monthly costs will correlate closely with how many new listings you create and sales you make.
Starting Inventory
The next major cost to account for when starting an Etsy shop is purchasing or making enough inventory to open your doors. This includes both the supplies needed to make handmade products and/or the cost of sourcing vintage items for resale.
Handmade Inventory
If you plan to make your own products to sell, you’ll need to budget for the supplies. For example, a jewelry maker would need to purchase:
- Jewelry components like clasps, wire, beads
- Jewelry tools like pliers, wire cutters, etc.
- Packaging like jewelry pouches, boxes, hang tags
The costs here can vary immensely based on what type of items you plan to make, the quality of materials, and how much inventory you want to produce initially. But expect to spend at minimum $100-$500 on supplies just to make your first batch of handmade goods.
Vintage Inventory
For Etsy sellers focused on reselling vintage and antique items, your startup costs will involve sourcing enough inventory to open your shop. This may include:
- Visiting estate sales, flea markets, thrift stores
- Bidding on auction sites like eBay
- Finding wholesale lots online
The more unique and high quality items you find, the higher your average cost per piece will be. But you can likely get started finding vintage goods for $200-$500 and see where to source more affordable inventory as you build experience.
digitized Patterns
Some Etsy sellers sell instant downloads like digitized sewing patterns, printable art, and more. These types of inventory products have minimal costs to create, but do require an investment of time to produce quality designs.
Amount of Inventory
As a baseline, you’ll want enough inventory in your Etsy shop to make it feel like a fully stocked store from the buyer’s perspective. This could mean:
- 10-20 unique products
- At least 5-10 quantities of each item
You can start on the lower end of those ranges when first opening your Etsy shop and build up over time. But try not to list just 1-2 products or quantities to start, as buyers want ample choices when browsing shops.
Packaging & Shipping
Part of providing a positive customer experience with an Etsy shop means using attractive, branded packaging. You’ll want to source packaging supplies like:
- Mailers or shipping boxes
- Tissue paper, kraft paper
- Stickers, tags, or labels
- Packing materials like bubble wrap
Again, costs here depend on quantities needed and what types of packaging you source. But expect to spend around $50-$200 on initial supplies for packaging your orders.
You may also incur some costs for a shipping scale and printer if you plan to print your own shipping labels. Basic versions can cost $50 or less.
Office & Equipment
To operate your Etsy shop, you’ll need some office supplies and equipment. Some typical startup costs include:
- Office supplies – A basic starter set of pens, paper, folders, notebooks, etc. could run you around $50.
- Computer/laptop – A basic laptop suitable for running your shop could cost $200-$500.
- Internet – Around $10-$50 per month for basic high-speed internet.
- Camera – A decent smartphone or starter DSLR to photograph products could cost $200-$500.
- Bookkeeping software – $0 per month for a basic spreadsheet, up to $20/month for accounting software.
You may already have some of these supplies on hand, so factor in only what you’ll need to purchase additionally for your Etsy shop.
Marketing Expenses
One of the biggest factors in an Etsy shop’s success is how much time and money you put into marketing. Some typical marketing costs you may incur each month include:
- Etsy ads – Promoted listings can cost $1-$2 per day per listing.
- Facebook/Instagram ads – $50-$500+ per month depending on reach.
- Google Shopping ads – Average cost-per-click is $1-$2.
- Printed marketing materials – Business cards, flyers, signage, etc. can cost $50-100 for initial print run.
There are plenty of free and low-cost ways to market an Etsy shop, especially when starting out. But be prepared to potentially invest $500 or more per month in paid advertising and promotions once your shop is established.
Additional Licensing & Registration
Depending on your local state’s laws, you may need to take steps to formally register your Etsy business. Typical costs include:
- Business license – $50-$100 per year in most states.
- Sales tax permit – $0 in many states, up to $100 annual fee in some.
- Seller’s permit – $0 in most states, required for collecting sales tax.
- Fictitious business name – $0-$50 one-time registration fee in most states.
Be sure to research if you need to register your business name, collect sales tax, or obtain any licenses specific to your state.
Ongoing Monthly Expenses
In addition to one-time startup costs, also expect these recurring monthly expenses to run your Etsy shop:
- Etsy listing fees – Depends on your number of listings, around $0-$100/month.
- Etsy transaction fees – 5% of your monthly sales.
- Website hosting – $0/month if only using Etsy, up to $50/month for a separate site.
- Email marketing – $0-$30/month depending on number of subscribers.
- Bookkeeping – $0/month if DIY, $200+ to work with an accountant.
- Software subscriptions – $0/month for free tools up to $50+/month each for premium tools.
- Advertising – Highly variable, can be $0/month up to $500+/month or more.
Aim to keep your fixed monthly expenses as low as possible when first starting out. As your revenue grows, you can reinvest into tools and services that take your shop to the next level.
Conclusion
Launching an Etsy shop can cost as little as a few hundred dollars for very basic setups, up to $1000 or more for those investing in significant starting inventory, paid advertising, and premium tools.
The major cost drivers to factor in are:
- Etsy fees – Plan for both listing and transaction fee expenses.
- Starting inventory – Source enough products to open fully stocked.
- Packaging – Create branded, customer-friendly packaging.
- Equipment – Computer, camera, basic supplies.
- Marketing – Paid ads, promotions, business cards, etc.
By understanding the typical costs outlined here, you can decide on an initial budget for your Etsy shop launch. And remember to keep fixed overhead low each month so you can reinvest profits back into growth and inventory.
With adequate funding and strategic spending, you can set your Etsy shop up for long-term success and turn your handmade hobby into a thriving business.
