Sell on Etsy or Build a Website?

As small business owners have looked for ways to sell their handmade goods online due to loss of sales from canceled craft fairs and gift shows, a steady increase in Etsy listings have made a significant rise in social media conversation. But is Etsy the best solution for the short or long term?

Our goal today is to do a cost comparison between the fees involved for Etsy vs an eCommerce website through 3dcart. I will break it down into monthly costs to helps readers make an informed decision about what is best to sustain and grow their business.

Note: For the purpose of this comparison, we are assuming shipping charges are calculated with real time shipping rates that the consumer is paying to cover your direct cost so they are not a cost you incur against your profit. Sales tax rates are also not considered in the breakdown as they vary by location and whether you need to collect or not.

Breakdown of Fees

Etsy Cost Breakdown

Reference: https://www.etsy.com/sell

• No Setup Fees
• $0.20 per listing fee
• 5% Transaction Fee
• 3% + $0.25 Payment processing fee
• 15% Offsite ads fee* (optional for most sellers, required based on sales volume)

Individual Product Fee Breakdown

A $40.00 priced item results in a fee breakdown of the following:

Monthly Total Fee Breakdown

For a monthly estimate based on selling 25 products @ $40 ($1,000 total), the breakdown in fees would be:

Handmade items take the most time to make because of their attention to details, creativity and the artist’s skills. In the examples above, 23% of the product sale (with Offsite Ads) went directly towards fees vs going into the seller’s wallet. Seems high but some assumption I have is that the seller is adjusting the pricing of their product to account for the associated fees of sale. If not, they most definitely should be.

MY ANALYSIS: With Etsy, you can be selling your product online in minutes. A great solution for the immediate short term need to sell online. The bad news, if you are planning more than $10,000 in annual sales on Etsy, the Optional Offsite Ads fee becomes required. The good news is that the rate will reduce from 15% to 12% but still in my opinion carries a hefty cost to selling your product.

Yes, the exposure on Google, Facebook, Instagram, Pinterest and Bing are a bonus for target marketing but you are also being grouped with like business owners with no guarantee of how many times your product will be displayed for sale before you need to renew your listing for sale. Etsy makes no guarantees of sale in Offsite Ads, only that you have to pay a higher fee if your product does sell.

3dcart Website Cost Breakdown

Reference: https://www.3dcart.com

In our previous blog post about costs to build a website, we concentrated on questions that a website designer will ask when it comes to building a custom website for you. But here, we will breakdown costs with the assumption that you are NOT having a website built and will use a pre-built free design from the selection that 3dcart offers with their hosting.

• No Setup Fees
• 15-day Free Trial
• 30 Day Money-back guarantee
• No listing fees
• No transaction fees
• No offsite ad fees (built in Google features for search engine ranking)
• 2.9% + $0.30 Payment processing fee (varies by payment provider, 100+ provider options)
• $19.00/month (Startup Plan)

Additional Yearly Fees

• Domain Registration – $15.00/year (higher end, most are less than $10)
• SSL Certificate – $99.00/year

3dcart Monthly Fee Breakdown

Based on the scenario of selling 25 products @ $40.00 for total monthly sales of $1,000 and splitting the yearly fees evenly across 12 months, we come up with the following monthly breakdown:

3dcart offer you a complete, all-in-one platform that includes everything you need to sell online. Their suite of powerful tools will enable you to design your store, manage inventory, track sales, and more, all from within your site’s online store manager. With 3dcart you’re getting the most SEO-friendly website builder on the market. Every part of your site is pre-optimized to increase your rankings and drive more customers to your store, maximizing your ROI (Return On Investment).

MY ANALYSIS: Creating your own website will seem labor intensive to start as you get everything in place. But similar to Etsy, you can be selling your items online in a matter of hours (vs minutes) while creating a foundation to grow your business for the long term. Another method of sales vs. relying on craft fairs, gift shows or brick & mortar shops.

Final Thoughts

The numbers really show their difference when it comes to the yearly comparison. Remember, if you are over $10,000 in sales you will be required to utilize the Offsite ads. Not all products will sell through Offsite ad but there is a heavy assumption that is how you will gain the most exposure for your product.

Etsy Yearly Breakdown

• $12,000 in sales
• $1,308.60 in fees (adjusted for 12%)
• Total Profit: $10,691.40

3dcart Yearly Breakdown

• $12,000 in sales
• $780.96 in fees
• Total Profit: $11,219.04

Additional Profit with 3dcart: $527.64 *

*NOTE: All sales numbers and fees used are approximate and should not be considered your exact profit numbers or fees. How your business will profit will be based on your individual business model and product sales. Our intent was to show a breakdown based on sample numbers.

MY OPINION: Maximize your opportunities with a website to grow and strengthen your business. As your online presence grows through the built-in tools marketing tools, your sales and profit will continue to grow. Having a website is WORK. You cannot just build it and have instant sales success. But the long term gains far outweigh the short term opportunities.