the margin kitWhat's a good profit margin on Etsy, and how to calculate yours
Sales numbers feel great, but margin is what decides whether your shop pays you. Here's how to work it out properly and what to aim for.
The formula
"All costs" means everything: Etsy fees, materials, packaging, the shipping label, a share of ads and tools, and your time if you want to know whether the shop really pays you.
Worked example: a $30 order
| Order total | $30.00 |
| Etsy fees (6.5% + 3% + $0.25 + $0.20) | −$3.30 |
| Materials and packaging | −$7.00 |
| Shipping label | −$4.50 |
| Profit before your time | $15.20 (50.7%) |
| Your time: 20 minutes at $20/hour | −$6.67 |
| True profit | $8.53 (28.4%) |
The first margin (51%) looks amazing. The second (28%) is what's really left after you pay yourself, and it's the one to manage.
What's a good margin?
There's no official number, but as a working guide for handmade and print-on-demand sellers:
| True margin (after paying yourself) | What it means |
|---|---|
| Below 10% | Fragile. One Offsite Ad or a discount wipes it out. |
| 10–25% | Working, but little room for ads, sales or slow months. |
| 25–40% | Healthy. You can run sales and absorb Offsite Ads. |
| Above 40% | Strong. Common for digital products and well-priced niches. |
Margin vs markup (don't mix them up)
Markup is profit ÷ cost. Margin is profit ÷ price. A product that costs $10 and sells for $20 has a 100% markup but only a 50% margin. Fees are a percentage of price, so plan with margin.
Five ways to raise your margin
- Raise prices on your best sellers first. They have proven demand. Test a 10% increase.
- Bundle. Etsy's fixed fees ($0.25 + $0.20) are paid once per order, so bigger orders keep more.
- Buy key materials in bulk once you know your run rate. An inventory tracker shows it.
- Check shipping. If you offer "free shipping", make sure the label is in the price.
- Drop or reprice the losers. Track profit per product. Some best sellers are your worst earners.
Try your own numbers in the free Etsy fee calculator.
Etsy Seller Profit Tracker
Log orders and see Etsy fees, cost of goods and true profit per order, product and month, plus how much to set aside for tax.
See the Etsy Seller Profit Tracker · $15 Free fee calculatorFAQ
How do I calculate my Etsy profit margin?
Subtract all costs (Etsy fees, materials, packaging, shipping labels and a share of ads and tools) from the order total, then divide by the order total. Include your time if you want your true margin.
What is a good profit margin for an Etsy shop?
For handmade sellers, a true margin of 25–40% after paying yourself for your time is healthy. Below about 10% is fragile, because one Offsite Ad or discount can wipe it out.
Is margin the same as markup?
No. Markup is profit divided by cost, and margin is profit divided by price. A $10 item sold for $20 has a 100% markup but a 50% margin.