Etsy Fees and Cost: A Platform That Took More Than It Gave — My Hard Lesson in Small Business

Learn how the Etsy fees and ad costs left me with no profit after selling over $10,000 of handmade skincare products. My hard lesson on the platform’s impact on small businesses.

A few years ago, after receiving a small settlement from a car accident, I found myself in a tough spot. My health had been deteriorating, and I was struggling with a host of medical issues that left me unable to keep up with my job.

As a single parent and the sole breadwinner, the stakes were high. When you’re in a single-parent household, if you get sick and can’t work, there’s no one else to pick up the financial slack. Bills don’t stop coming just because you’re ill.

With the pressure of needing to find a way to earn income from home, I decided to invest my settlement money into starting my own small business.

I loved skincare, so I started researching and stumbled upon Etsy, a platform supposedly built for handmade sellers like me. I thought, why not give it a shot?

The Start of Southern Homemadeables

With excitement, I launched Southern Homemadeables, my own little line of handmade skincare products. I spent countless hours researching, experimenting, and perfecting my formulas.

I used the last of my settlement money to buy all the supplies I needed — ingredients, packaging, labels, and more. Etsy seemed like the perfect place to sell my products and reach potential customers.

But little did I know, Etsy would eventually rip me off in ways I couldn’t imagine.

The Harsh Reality of  the High Etsy Fees

At first, sales were slow, which I expected. I worked on improving my listings, studied SEO, and put in the time to optimize my store. After a few weeks, I started seeing more sales trickle in.

But something became very clear: if I didn’t pay Etsy for ads or their “Offsite Ads” program, my products were buried and my sales dried up.

So, I started investing in their advertising options, but even when sales picked up, the profits didn’t. Etsy took a huge chunk of each sale, and after all was said and done, I was left with little to nothing.

My $10,000 Loss: How Etsy Fees Eat Away Profits

In total, over nearly two years, I shipped out more than $10,000 worth of my handmade skincare products. But guess what? Etsy took over $8,000 of that in fees, commissions, and ad costs.

That left me with less than $2,000 for all my hard work — barely enough to cover my supply costs, let alone make any kind of profit.

Skincare ingredients aren’t cheap. Packaging, labels, shipping, and time — these all add up quickly. So, in reality, I wasn’t making any money at all.

I was essentially working for free, pouring my heart, soul, and countless hours into something that brought in no financial return. I spent nearly two years struggling to build a business only to be left with nothing in the end.

Is Selling on Etsy Worth It?

I learned the hard way that Etsy isn’t the supportive marketplace for small, handmade businesses that it claims to be. The platform might work for some, but for me, it turned out to be a financial drain, not an opportunity.

The high fees, the push to pay for ads, and the lack of real profit left me with a bitter taste in my mouth. I know there are countless other sellers like me who’ve gone through the same struggle.

The Etsy fees and business model can squeeze the life out of small businesses, especially those like mine that rely on every penny to stay afloat. For anyone considering selling on Etsy, I’d urge you to think twice. It’s a gamble, and unfortunately, the odds aren’t in favor of small sellers.

If you’re looking for a sustainable, profitable way to run a handmade business, Etsy might not be the right choice.

What I’ve Learned from The Etsy Fees Model

This experience taught me more than just how to run a business. It taught me that not all platforms are built with small businesses in mind. Etsy’s success comes from sellers like us, but sadly, we don’t always get the support or returns we deserve. If you’re a handmade seller or thinking of becoming one, do your research.

Explore other platforms, weigh your options, and consider whether you’re ready to take on the financial risks that come with using Etsy. For me, the journey didn’t end with Etsy. I’m still passionate about creating and selling skincare, but I’ve learned to look for better, more ethical ways to bring my products to market.

Platforms like Etsy may claim to be a haven for handmade sellers, but from my experience, it’s been anything but.

Conclusion: Be Smart, Be Wary

Selling on Etsy felt like a betrayal, and I know many other sellers share similar stories. If you’re thinking about starting a business on Etsy, be prepared for high fees, limited visibility unless you pay for ads, and little in the way of profits.

For me, the Etsy dream was a mirage, and I hope that by sharing my story, others can avoid the same pitfalls. Stay smart, stay informed, and always prioritize your business’s long-term health over quick, unreliable platforms.

Have you experienced something similar with Etsy or another platform? Feel free to share your story in the comments below. Let’s keep the conversation going and help each other find better ways to thrive as small business owners!