Most sellers set a price, then look at what Etsy's fees leave them. It works, but it means guessing and adjusting. It is faster to go the other way: decide how much you want to keep from each sale, then calculate the price that gets you there.
For a US seller with free shipping, that calculation fits on one line:
Below is where the two numbers come from, how to use them with real costs, and how to adjust the formula for shipping, Offsite Ads and other countries.
Where 0.45 and 0.905 come from
For a seller whose bank account is in the United States, a normal Etsy sale (no ads) has three fees:
- Listing fee: $0.20 (paid when you list, and again when a multi-quantity listing renews after a sale).
- Transaction fee: 6.5% of the order total, shipping and gift wrap included.
- Payment processing: 3% + $0.25 per order, on the total including shipping (and sales tax when it applies).
Add them up for an item priced P with free shipping:
What you keep is the price minus the fees:
Solve that for P and you get the formula: P = (kept + 0.45) ÷ 0.905. The 0.45 is the two fixed fees ($0.20 + $0.25); the 0.905 is what is left of each dollar after the two percentage fees (100% − 6.5% − 3%).
Step 1: decide what "keep" means for you
"Kept" is the money that lands in your Etsy payment account from the sale. It has to cover everything that isn't an Etsy fee:
- Materials and supplies for one unit
- Packaging (box, tissue, tape, label, thank-you card)
- The shipping label, if you offer free shipping
- Your time, at an hourly rate you would accept
- The profit you want on top
Add those up and that total is your goal.
Step 2: apply the formula
| You want to keep | Price = (goal + 0.45) ÷ 0.905 | Check: fees at that price |
|---|---|---|
| $10.00 | $11.55 | $1.55 |
| $20.00 | $22.60 | $2.60 |
| $25.00 | $28.13 | $3.12 |
| $35.00 | $39.18 | $4.17 |
| $50.00 | $55.75 | $5.75 |
Round up, not down. A price of $22.60 can become $22.95 or $23; rounding down to $22 would leave you short.
Worked example: a soy candle
- Wax, wick, fragrance, jar: $6.40
- Packaging: $1.10
- Shipping label (you offer free shipping): $5.60
- Labor: 15 minutes at $20/hour = $5.00
- Profit you want: $5.00
Goal = $23.10. Price = ($23.10 + 0.45) ÷ 0.905 = $26.02. Rounded up to $26.50, each normal sale covers all your costs and leaves a little more than the $5 profit you planned.
Why not just multiply your costs by 2 or 3?
"Materials times three" is a popular rule of thumb, and it can work for some products. Its weakness is that it ignores everything that isn't materials. A $4 candle and a $4 hand-knitted hat get the same price, even though one takes 15 minutes and the other six hours. It also ignores fees, which grow with the price, and shipping, which doesn't.
The keep-formula makes you write down each cost once, including your time, and then adds Etsy's fees exactly. You can still compare the result with a multiplier and with what similar shops charge. If the formula gives a price far above the market, that is useful information too: the item may cost too much to make, take too long, or need to be positioned as a premium product with photos and a description to match.
If you charge shipping
Etsy's percentage fees also apply to the shipping you charge. If you charge S for shipping, what you keep from the order is 0.905 × (P + S) − 0.45, and the shipping label comes out of that. To keep your goal after paying the label:
Example: goal $17.50 (everything except shipping), label $5.60, and you charge $5.95 shipping. Price = ($17.50 + $5.60 + $0.45) ÷ 0.905 − $5.95 = $26.02 − $5.95 = $20.07. The buyer pays $26.02 in total, the same as with free shipping in the candle example: the fees don't care how you split the total.
If Offsite Ads bring the sale
When an order comes from an Etsy Offsite Ad, Etsy adds a fee of 15% of the order total (12% for shops with $10,000 or more in yearly sales), capped at $100 per order. The kept amount becomes:
- At 15%: 0.755 × P − 0.45, so P = (goal + 0.45) ÷ 0.755
- At 12%: 0.785 × P − 0.45, so P = (goal + 0.45) ÷ 0.785
To keep $20 on an Offsite Ads order at 15%, the price would be $27.09 instead of $22.60. Most sellers don't price everything for that case; a sensible check is to make sure an attributed sale at your normal price still covers your costs. Our guide to Etsy Offsite Ads covers the rules and when opting out makes sense.
Things the formula doesn't include
- Sales tax: the 3% processing fee is also charged on sales tax the buyer pays. On a $25 item with 8% tax, that's 6 cents. Round up a little and you're covered.
- Etsy Ads: on-site ads are paid per click, not per sale, so they're a budget, not a per-order fee. The Etsy Ads calculator handles them.
- Discounts: run the formula on the sale price, not the full price, before you schedule a sale.
- Other countries: processing fees vary by country, and some countries also have a regulatory operating fee or VAT on fees. Replace 0.03 and 0.25 with your country's rates (Etsy lists them in its help center) and add any extra percentage: Price = (goal + 0.20 + fixed fee) ÷ (1 − 0.065 − your % fees).
- Currency conversion: 2.5% if your listings are in a different currency from your payment account.
Check your prices in five minutes
- List your five best-selling items with their current prices.
- For each, add up materials, packaging, label and labor.
- Run (goal + 0.45) ÷ 0.905 and compare with your current price.
- Run (goal + 0.45) ÷ 0.755 too, to see what an Offsite Ads sale does.
- Adjust the ones that come out below, and look again in a month.
The Etsy fee calculator does the forward check (price → what you keep) and the profit calculator adds up a whole month. For the strategy side — competitor research, psychological pricing, when to raise prices — read our Etsy pricing strategy guide.
Once the price is right, the listing has to convince. ListifyAI's Listing Generator drafts the title, 13 tags and description from a product photo so you can spend your time on the product. New accounts get 20 free credits.
Quick answers
What does 0.905 mean in the Etsy pricing formula?
It is what remains of each dollar of the price after Etsy's two percentage fees for US sellers: 100% minus the 6.5% transaction fee minus the 3% payment processing fee.
Where does the 0.45 come from?
It is the two fixed fees on each sale: the $0.20 listing fee and the $0.25 part of the payment processing fee.
Does the formula work if I charge shipping?
Yes, with one change: Price = (goal + shipping label + 0.45) ÷ 0.905 − shipping charged, because Etsy's percentage fees also apply to the shipping you charge.
How do I include Offsite Ads?
Replace 0.905 with 0.755 at the 15% rate or 0.785 at the 12% rate, as long as the Offsite Ads fee stays under its $100 cap.