Who this is for
You're selling on Etsy and need to know what shipping actually costs after fees. You've heard Etsy takes a cut of shipping too, but you're not sure how much or how to account for it when pricing.
See your real Etsy take-home
Enter your sale price and see exactly what you keep after all fees.
This guide breaks down what Etsy charges on shipping, what carrier discounts you get, and whether free shipping is worth it for your shop.
The goal
Keep shipping costs from killing your profit margins. Understand the real cost of shipping labels, what fees apply, and which strategy (free vs. charged) makes sense for your products.
Quick summary
| What Etsy charges | Rate | Applied to |
|---|---|---|
| Transaction fee | 6.5% | Full order amount including shipping |
| Payment processing | 3% + $0.25 | Full order amount including shipping |
| Listing fee | $0.20 | Per listing (not per shipment) |
| What carriers charge | Discount via Etsy | Example |
|---|---|---|
| USPS | Up to 30% off retail | Priority Mail, First Class |
| UPS | Up to 78% off Ground, 73% off 2nd Day | All services |
| FedEx | Up to 35% off retail | Ground, Express |
| Global Postal (Asendia) | Varies | International under 4 lbs |
How Etsy fees apply to shipping
Etsy's transaction fee and payment processing fee apply to the entire order amount, not just the item price. If you charge for shipping, you pay fees on that too.
On a $50 item with $10 shipping, you're charged fees on the full $60. That's $3.90 in transaction fees (6.5% of $60) plus $2.05 in payment processing (3% of $60 + $0.25). Your shipping isn't actually $10 — it's $10 minus the fees, leaving you less to cover the actual postage cost.
This catches a lot of sellers off guard. You think you're breaking even on shipping, but after fees you're subsidizing it out of your item profit. For the complete Etsy fee breakdown, see our Etsy fees explained guide.
See your real Etsy take-home
Enter your sale price and see exactly what you keep after all fees.
Etsy shipping label discounts
Buying shipping labels through Etsy gets you commercial rates that are significantly cheaper than retail counter prices. You're not required to use Etsy's labels, but the discounts are usually worth it.
USPS discounts
USPS through Etsy gives you up to 30% off retail rates. Priority Mail and First Class Package both qualify. Priority Mail automatically includes $100 insurance at no extra charge.
Most small, lightweight items under 1 lb ship First Class for $4–$5. Anything over 1 lb usually makes sense to send Priority Mail, which includes tracking and faster delivery.
UPS discounts
UPS discounts through Etsy are aggressive: up to 78% off Ground and 73% off 2nd Day Air. If you're shipping heavier items or need guaranteed delivery windows, UPS becomes competitive with USPS Priority once you hit 5–10 lbs.
UPS requires a pickup or drop-off at a UPS location. Most sellers use UPS for larger, higher-value items where the cost savings justify the extra logistics.
FedEx discounts
FedEx gives up to 35% off retail rates through Etsy. FedEx Ground works well for items 10+ lbs, especially on longer distances where USPS Priority gets expensive.
Like UPS, FedEx requires drop-off at a location or scheduled pickup. It's less common for Etsy sellers than USPS, but it's the right choice for certain weight/distance combinations.
International shipping
Etsy offers Global Postal Shipping powered by Asendia for international orders under 4 lbs. This consolidates packages and uses local postal services in the destination country, which keeps costs lower than shipping directly via USPS International.
Customs forms are auto-generated when you buy the label. You still need to make sure your item descriptions and values are accurate, but you don't fill out paper forms by hand.
For country-specific fee details, see our Etsy fees Australia guide.
Free shipping vs charged shipping
Free shipping sounds customer-friendly, but it only works if you can absorb the cost without tanking your margins. Etsy prioritizes free shipping in search results, so there's a real incentive to offer it — but not at any cost.
Search ranking benefits
Since July 2019, listings with free shipping on US orders $35+ get priority placement in search. Etsy reported sellers who adopted the free shipping guarantee saw an average 20% sales increase.
Since October 2024, listings with domestic shipping under $6 also get search priority. This gives you options: offer free shipping on orders over $35, or charge a low flat rate like $4.95 and still get the search boost.
When free shipping works
Free shipping makes sense if your items are lightweight, high-margin, or already priced competitively above $35. You build the shipping cost into the item price and simplify the buying decision.
Example: A $40 necklace that costs $4 to ship becomes a $44 item with free shipping. You pay the same Etsy fees either way — the 6.5% transaction fee applies whether shipping is $0 or $10.
When charged shipping works
Charged shipping makes sense if your items are heavy, bulky, or low-margin. You can't absorb a $15 shipping cost on a $25 item without losing money.
If you charge shipping separately, aim for under $6 to qualify for the search priority boost. Use calculated shipping if costs vary significantly by distance or package size — it prevents you from eating unexpected costs on cross-country orders.
Handling fees removed
As of March 2024, Etsy removed the ability to add handling or package fees when using calculated shipping. You can only charge the actual carrier rate. If you need to cover packaging costs, build them into the item price or use a flat shipping rate instead.
How to calculate true shipping costs
Let's work through a real example. You're selling a mug for $30 and charging $10 for USPS Priority Mail shipping.
Customer pays: $40.00
Etsy fees on full order:
Transaction fee (6.5% of $40): -$2.60
Payment processing (3% + $0.25): -$1.45
Total fees: -$4.05
Shipping label cost (USPS Priority): -$8.50
Your net after fees and shipping: $27.45
You charged $10 for shipping but only netted $1.50 after fees and the label cost. That $1.50 covers your packaging materials (box, tape, bubble wrap) — or it doesn't and you're losing money on every shipment.
Use the Etsy Fee Calculator to run the numbers for any sale amount with shipping included.
FAQ
How much does Etsy charge for shipping?
Etsy doesn't charge you to ship — it charges 6.5% transaction fees and 3% + $0.25 payment processing fees on the shipping amount the customer pays. The actual postage cost depends on the carrier rate, which you get at a discount when buying labels through Etsy.
Does Etsy charge fees on shipping?
Yes. Transaction fees and payment processing fees apply to the full order total, including whatever you charge for shipping. On $10 shipping, you pay about $1.20 in fees (6.5% + 3% + $0.25), leaving $8.80 to cover the actual postage and packaging.
What is the cheapest way to ship on Etsy?
USPS First Class Package for items under 1 lb, usually $4–$5 with Etsy's discount. For items 1–5 lbs, USPS Priority Mail is the best balance of cost and speed. Use UPS Ground or FedEx for heavier items over 10 lbs where USPS Priority gets expensive.
Can I offer free shipping and still make a profit?
Yes, if your items are lightweight and high-margin. Build the shipping cost into your item price. A $30 item with $4 shipping becomes a $34 item with free shipping. You qualify for Etsy's free shipping search boost on orders $35+, which can increase sales enough to offset the margin compression.
Do I have to use Etsy shipping labels?
No. You can buy labels elsewhere or use your own carrier accounts. But Etsy's discounted rates (up to 78% off UPS, 30% off USPS) are hard to beat unless you're shipping massive volume and have negotiated better commercial rates directly.
Can I get a refund on unused shipping labels?
Yes. USPS and FedEx labels can be refunded within 10 days if unused. UPS labels get 14 days. Canada Post labels get 15 days. Etsy automatically credits your payment account when you void an unused label.
Does Etsy automatically charge shipping?
Only if you set it up that way. You choose between flat rate shipping (you set the price), calculated shipping (based on carrier rates and buyer's location), or free shipping (cost built into item price). Etsy doesn't force a specific method.
What happens if I undercharge for shipping?
You eat the difference. If you charge $5 flat rate shipping but the actual label costs $9, you're losing $4 on every order. Use calculated shipping if costs vary, or test your flat rates against real carrier quotes for typical destinations.
Next steps
- Calculate your true costs — Use the Etsy Fee Calculator to see exactly what you'll net after fees and shipping on any item price
- Read the full fee breakdown — Etsy Fees Explained covers transaction fees, listing fees, payment processing, and Offsite Ads
- Check your profit margins — Our Etsy profit calculator guide shows what you actually keep after all costs
- Optimize your pricing strategy — Etsy Pricing & Shipping Strategy covers free shipping tactics and pricing formulas
- Generate optimized listings — Use the AI Listing Generator to create titles and descriptions that convert
See your real Etsy take-home
Enter your sale price and see exactly what you keep after all fees.
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Sources
- Etsy Help: Buying Shipping Labels on Etsy
- Etsy Help: USPS Shipping Labels on Etsy
- Etsy Seller Handbook: Free Shipping Guarantee
- Etsy Seller Handbook: Shipping Price Search Update
- Etsy Help: Global Postal Shipping Labels
- Etsy Help: How to Refund Shipping Labels
- Etsy Help: Updates to Handling and Package Fees