Profit ÷ cost
If an item costs $20 and sells for $30, its $10 profit is a 50% markup on cost.
A practical Etsy pricing guide
How to Price Etsy Products to Be Profitable
Build a price that pays for the product, the order, your time, and Etsy's fees—then leaves a real margin for the business.
The short answer
Do not price from materials alone.
A profitable price starts with the full amount the order earns, then subtracts every cost required to make and fulfill it. Your labor belongs in the costs. Profit is what remains after paying for that labor.
Because several Etsy fees are percentage-based, simply adding a profit amount to your costs will usually underprice the item. Calculate the fees at the proposed selling price, then check the resulting margin.
Five pricing steps
Build the price from the order up.
Use a typical order for the listing—not an unusually cheap or unusually expensive shipment.
- 01
Calculate the product cost
Add the materials and consumables used to make one sellable item. Include small inputs such as labels, glue, glaze, thread, printer filament, protective finish, or failed-print allowance when they are meaningful.
Example: $8.20 in materials.
- 02
Pay for the time it takes
Choose an hourly labor rate and multiply it by the hands-on production time. If an item takes 40 minutes and your rate is $18 per hour, its production labor is $12. Treat that $12 as a cost—not as the shop's profit.
Formula: labor cost = hours × hourly rate.
- 03
Add packaging and fulfillment
Count the box or mailer, tissue, tape, inserts, shipping label, and postage you pay. “Free shipping” changes who sees the charge; it does not make postage free. If the buyer pays shipping separately, include both that revenue and the postage expense.
Example: $1.40 packaging + $5.25 postage.
- 04
Estimate the Etsy fees for the order
For a U.S. Etsy Payments example, include the $0.20 listing or renewal fees actually charged, Etsy's 6.5% transaction fee, and the U.S. payment processing fee of 3% + $0.25. Payment processing varies by country. Add an Offsite Ads fee only when that order was attributed to an Offsite Ad.
Important: percentage fees must be calculated from the applicable order total, not added as a flat cost.
- 05
Check the profit margin
Subtract the fees and all making and fulfillment costs from order revenue. Then divide the estimated profit by order revenue. If the margin is below your target, increase the price, reduce a cost, or reconsider the product.
Formula: profit margin = estimated profit ÷ order revenue × 100.
Worked example
A $42 handmade product is not a $42 profit.
Assume a U.S. seller charges $42 for the item and $6 for shipping. There is no discount or sales tax in this example, and the order was not attributed to Offsite Ads.
After the estimated Etsy fees and all entered costs, the order leaves $16.14 in estimated profit, or a 33.6% estimated margin.
Change these numbers in the free calculator →Illustrative orderUS Etsy Payments example
- Item price
- $42.00
- Shipping charged
- $6.00
- Order revenue
- $48.00
- Materials
- − $8.20
- Production labor
- − $12.00
- Packaging + postage
- − $6.65
- Estimated Etsy fees
- − $5.01
Estimated profit$16.1433.6% margin
Markup is not margin
Use the number that tells you what the order keeps.
Markup compares profit with cost. Margin compares profit with revenue. They answer different questions and produce different percentages.
Profit ÷ revenue
The same $10 profit on $30 of revenue is a 33.3% profit margin.
There is no single correct margin for every Etsy shop. Your target needs to cover the business costs that are not attached to one order—software, equipment, workspace, bookkeeping, insurance, photography, samples, and slow-selling inventory—while leaving room to reinvest.
Fee assumptions
Verify the fees that apply to your shop.
The U.S. examples on this page use a 6.5% Etsy transaction fee, a 3% + $0.25 U.S. Etsy Payments processing fee, and $0.20 in listing or renewal fees. Multiple-quantity purchases can create additional $0.20 fees. Offsite Ads fees are generally 12% or 15% on attributed orders and are capped at $100 per order.
Payment processing and some operating fees vary by country. Taxes, VAT, currency conversion, subscriptions, Etsy Ads, refunds, and other charges may also affect the result.
Fee assumptions last checked September 16, 2026. Review Etsy's official Fees & Payments Policy, payment processing fees, multiple-quantity fee guidance, and Offsite Ads guidance.
This guide provides an educational estimate, not accounting, tax, or financial advice.
Etsy pricing FAQ
Questions behind the price
What costs should I include in an Etsy product price?＋
Include materials, production labor, packaging, postage you pay, listing or renewal fees, transaction fees, payment processing, applicable advertising fees, and other order-specific costs. Your target margin also needs to support overhead that is not assigned to one order.
Should labor be included before profit?＋
Yes. Labor pays for the work required to make the product. Profit is the amount left for the business after labor and the other costs have been paid.
Should I include sales tax as revenue?＋
No. Tax collected from the buyer is not product revenue. It may still be included in the base used for payment processing, depending on the transaction, so use the actual order details when estimating fees.
How often should I review Etsy prices?＋
Review a listing whenever material, labor, packaging, postage, or marketplace fees change. It is also useful to compare estimates with completed orders so small cost changes do not quietly erase the margin.
Turn the method into a price estimate.
Enter the sale, fees, materials, packaging, labor, and fulfillment costs to see estimated profit, margin, break-even price, and a target-margin price.
Open the free Etsy profit calculator →