How does Etsy $0.20 listing fee work?

Etsy says it's free to open your own shop...and then tells you that there's a 20 cent listing fee for every thing you list...and then you have to make listings in the shop-creation process.

Does the 20cent listing fee happen when you SELL the item, or when you LIST the item? If it's the latter, than it's not really free to open your own shop, right? Or am I missing something? I thought I'd fiddle around with seeing the etsy selling process to see if it was something I was interested in, but I didn't realize I might have to pay to do so.

I really don't like jumping in blindly to things, and right now I feel like etsy is going to make me commit to paying things before I even realize whether or not I want to sell with them!

Hi Nicole, yes it's 0.20 each month for that item to remain listed. Another fee is charged when it sells (I think). I took everything down out of my shop so I can rebrand and refocus. Etsy recently implemented a bunch of changes, too, so I'm not sure the fees work the same now or not. I know there's a higher tier with higher fees, and supposedly more options, too. If you're new to Etsy, you'll find that getting your site seen by eyeballs of the buying public is the same as anywhere else. Unless you market it and pay for advertising, it won't have much of a chance to be seen. But there are lots of ways to market it for free, too. Good luck!

I've been an Etsy seller for six years.    When they say it's Free to open the shop they are referring to setting up the shop itself.   In other words, no design fee or template fees, or membership fees.    There also is no monthly charge for items or the shop itself which some other platforms charge.

ITEM fee of .20 is charged when you initially create(post) each item in your shop.   That fee does not repeat monthly.   You only pay it when you first create the item and if you sell it and want to "renew" the item to sell another of the same.

There is also a TRANSACTION fee which is billed at the time you SELL the item.   That was 3.5% of item price  until July 16 when it just went up to 5%, and is now calculated on your item price plus shipping.    

I've reviewed my costs to sell regularly over the years and consider this very economical to get the advantage of a turnkey store format, all the banking and sales tax collection done for me, super easy maintenance, huge international visibility with strong google search relevancy, and an online forum of fellow sellers who can be really helpful...kind of like Permies :)    

Clarification on the listing fee of .20 - That fee is good for 4 months.   At the end of that period you get a notification that the listing is about to expire and you have to "renew" it for another .20.   So that's .60 per year to let an item just sit there with no sales.   You can set up items with an inventory of a quantity of same items, so each time you sell one it will automatically renew itself and charge you the .20 again, which might be why Madison says it's a monthly fee.

And back to what I think was your main concern Nicole,   Really the only cost you will incur to "try out" a shop on Etsy is the .20 to set up your listings.  The transaction fee  and shipping charge only come out after you've sold something.  Very similar to the way Ebay works.

But also be aware that it takes time to get visibility in your shop so you need to devote a lot of TIME to learning the tricks of the trade, refining your shop profile, photos and descriptions for your listings.   There's a LOT of competition so getting noticed requires a bit of savvy and can take a year or two to even start getting momentum.

I would recommend that you spend some time browsing the seller's guide and the forums on Etsy to get a better feel for it (you don't have to be an established seller to access them at the bottom of the main page.  

Susan thanks for clarifying all that! I haven't looked closely enough at Etsy to understand the fees but it did seem like I had monthly fees and I did have it set up automatically. But I had a several items listed so maybe they were on a staggered renewal schedule. All in all, I did find it to be an affordable way to have an online shop, but I think it's like any other business when trying to get found by buyers. It doesn't happen all by itself unless you're really lucky. A lot of my friends get on Etsy and complain that they get no viewers and no sales, but they also did nothing to help their shop get found. Nice product photos help a lot, too.

Good points Madison.     You must have good sales to have that many renewals :)    And I agree it's all about the photos, I left out the potential cost of buying a decent camera and lighting, haha!  

What is your shop?    
Mine is  https://www.etsy.com/shop/ComfortCovers?ref=seller-platform-mcnav

I did not have good sales, lol, I just set it and forgot it because just the renewals weren't breaking the bank while I had regular income. But when my husband quit the dayjob I surely began to notice and pay attention to where every penny was going. When I first opened the shop I didn't have a 'theme' or a focus, and my products were scattershot. Now that I know what I want to do, I took everything down so I can reorganize. I did have good product pics, though, and that doesn't have to be expensive. I had really good ones with my iphone, but you have to build a light box and that makes all the difference. I used white foam-core boards and built 4 walled box (panel in the back, panel on each side, panel on the bottom. The top and front are open. Take the photos outdoors for best color, and at least crop them closely. I do use photoshop to erase the joint lines and make the background uniform if I need to, but sometimes it works just as it is as long as I crop.