Transaction: Etsy

Etsy is an e-commerce marketplace that enables artists to sell handmade unique products to interested buyers around the world.

Etsy makes money from its sellers by charging fees and offering add-on services. The major revenue models of Etsy comprise the following:

  • Listing Fees: Sellers are charged a $0.20 listing fee for every item that they place on Etsy’s platform. Charges are furthermore imposed whenever a listing is renewed. Listing fees are independent of successful future sales. The amount of $0.20 is valid for 4 months.

 

  • Transaction Fees: Etsy applies a 5 percent commission fee for every successful sale facilitated on its platform. Other charges include the cost a seller sets for shipping and gift wrapping. Sellers have the option to set their own sale price but Etsy cuts a commission of 5% from the sale price before paying the money to the seller.

 

  • Advertising and Promotional Fees: Etsy offers an array of promotional services to help its merchants increase sales. These include Etsy Ads and Offsite Ads. Etsy Ads are shown throughout Etsy’s website, for instance on search, category pages, or market pages. Sellers are only charged when a user clicks on the ad. Different CPC (Cost Per Click) rates apply depending on advertising spots, categories, and the country advertised in. Merchants pay a commission of either 12 or 15 percent when they make a sale through offsite ads. The fee charged depends on the merchant’s sales history.

 

  • Subscription Revenue: Premium sellers on the platform can opt-in to Etsy Plus, a package that offers multiple add-on tools to boost sales. Etsy charges a monthly subscription fee of $10. Premium features of Etsy Plus include Restock requests (allowing shoppers to receive notifications when the merchant’s products are back in stock), Advanced shop customization, Access to discounts and perks, for instance, custom shipping boxes or business cards, $5 Etsy Ads credit, 15 listing credits.

 

  • Pattern: is a website builder that allows merchants to create their own stores on a domain-independent of Etsy’s platform. Etsy charges a monthly subscription fee of $15. The listing and transaction fees on Etsy’s core platform are not applied to sales made on websites created via Pattern. Some of the tool’s features include the ability to create unlimited listings, advanced website analytics, blog, and social media sharing, or email marketing (in cooperation with MailChimp).

 

  • Payments Processing: Etsy Payments allows merchants to accept a variety of payments in their regional currencies whilst utilizing Etsy’s services. Merchants that are signed up to Etsy Payments can receive payment by credit card, debit card, gift cards, and Etsy Credit. Alternatively, third-party platforms like PayPal, some bank transfer services, Apple Pay, and Google Pay can be utilized as well. Etsy applies both a percentage and a fixed fee in exchange for facilitating the payment of any order. Percentage fees range anywhere between 3 to 6.5 percent while fixed fees are typically around $0.30. The actual amount is dependent upon the country the seller’s bank account is located in.