"Offsite Ads: how to price so the 15% fee doesn't sink a sale"
Etsy's Offsite Ads put your listings in front of shoppers on search engines and social sites. You only pay when one of those ads leads to a sale, but the fee is large: a percentage of the whole order (15% for most shops, 12% for shops over $10,000 a year), capped at $100 per order. Shops under the threshold can opt out; shops over it can't.
The question isn't whether Offsite Ads are good or bad. It's whether your prices still make money on the orders that carry the fee.
Step 1: find your worst case
Use the calculator with "Came from an Offsite Ad" set to your rate. If the bottom line goes negative or close to zero on your cheapest product, that product is underpriced for an ad-driven sale.
Step 2: decide what share of orders it hits
Your shop stats show what share of orders came from Offsite Ads. Say it's 10%. You don't need every order to absorb 15%; you need your average margin to survive it. Roughly:
Average extra cost = share of orders from ads x ad rate
At 10% of orders and a 15% rate, that's about 1.5% of revenue on average. Many shops cover that with a small price rise across the board rather than raising one product a lot.
Step 3: check the cheap items separately
Averages hide losers. A $6 item with $4 of costs can't take a 15% fee plus the normal ~11% of fees and still make money. Options:
- raise the price or sell it in a bundle
- set a minimum order (for example, "3 for $15")
- if you're under the threshold, consider opting out of Offsite Ads altogether
Step 4: remember the cap
The $100 cap means very large orders pay a smaller percentage. If you sell high-ticket items, the fee matters less in percentage terms than it does on everyday items.
What not to do
- Don't hide the fee in shipping. The transaction fee is charged on shipping too, and buyers compare shipping prices.
- Don't price for the ad case only. Most orders won't carry the fee; pricing every item as if it will can make you uncompetitive.
- Don't assume it's waived on refunds. Check Etsy's current policy on which fees come back when you refund.
The short version
Know your worst-case margin per product, know what share of orders come from ads, and set prices so your average still works. Re-check every few months; the share of ad orders changes with the season.