Sellers typically charge their customers handling fees to offset non-product- or non-shipping-related costs, such as packaging, storage, and prepping expenses.
As you can see, like with any business, there’s a lot to consider when pricing your products, even on online platforms like Etsy. After all, you’ll want to make a profit, but you’ll also want to avoid driving away potential customers with too-high prices.
Understanding how the handling fees on Etsy work and whether or not you should charge your customers for them is critical to strike that balance. That’s why we’ll discuss everything you need to know about Etsy handling fees in this article.
What are Handling Fees on Etsy?
Handling fees on Etsy are available to sellers who want to offset some of the costs involved when selling on the said platform.
Charging your customers a handling fee is considered optional, so it’s entirely up to the seller whether or not they want to add a handling fee to their products’ prices. There are generally two ways you can set up a handling fee on Etsy.
Added to the shipping costs
For the first method, sellers can add their handling fees via their shipping profiles. Doing so will automatically add the handling fee to your shipping fees.
However, you should note that if you offer free shipping to your customers, your handling fee won’t apply to their purchases.
Add to the products’ price
If you still want to charge your customers a handling fee to recover your costs, you can add the amount to your products’ existing prices instead.
Are Handling Fees Legal?
When it comes to the legal status of handling fees, the answer is it depends on the location. This is because the laws regarding handling fees vary from state to state and country to country.
For example, in the US state of California, they have the Consumer Legal Remedies Act or the CLRA, which states that sellers need to carefully calculate their handling and shipping charges to avoid higher expenses from potential lawsuits.
In most cases, sellers are advised to disclose what they’re charging their clients for to promote transparency and avoid legal trouble later on. Additionally, sellers are advised to ensure that the handling fees they charge are considered justifiable, reasonable, and overall clear to the customers.
Handling fees are also considered optional on Etsy, so this means it’s up to you as the seller to do the necessary research when setting your Etsy handling fees to ensure you’re fully complying with the law.
Should I Put a Handling Fee on Etsy?
Adding a handling fee to your prices isn’t mandatory when you’re selling on Etsy, but you can do so if you’re trying to recover some of your expenses. Of course, you will need to consider several factors when deciding to add a handling fee on Etsy.
How Do You Calculate Shipping and Handling Fees?
Depending on where you’re shipping your items from, Etsy can offer some ways to help you calculate how much shipping – and handling – you should charge for your products.
If you’re from the US or Canada
If you’re shipping your products from either the US or Canada, you have the option to have the shipping costs calculated for you via their “Calculated Shipping” feature. This option is available for packages shipped using the couriers Canada Post or USPS.
With this feature, the total costs will be determined based on several aspects of the order, such as:
- The dimensions of the package
- The total weight of the package
- What shipping service your customer choose during checkout
- Your customer’s delivery address
Of course, you’re still given the option to set your own shipping and handling rates if you prefer this over automated calculations.
Outside the US and Canada
Unfortunately, if you’re shipping your item from countries besides the US and Canada, you will need to figure out how much you’ll charge on your own.
In most cases, you need to consider the following costs when determining the shipping and handling costs:
- Packaging materials like boxes, tape, protective materials, and more
- How much time you spent packing the items
- The parcel’s dimensions
- The package’s total weight
- The distance from the shipping location to the delivery location
- Estimated delivery time (starting from the date of shipment)
- Type of shipment method – expedited or standard and via air, sea, or land
- Special handling, especially for high-value or fragile items
- Taxes and tariffs if shipping internationally
- Insurance and other types of shipment protection or guarantees
Fortunately, most couriers offer helpful information regarding this, so you can check out their policies if you’re going with your preferred courier to ship your items.
How Much Should You Charge for a Handling Fee?
There’s no set rule when it comes to how much you need to charge handling fees, but you will want to keep them at a reasonable rate to avoid getting in trouble with the law for overcharging your customers.
In general, many Etsy sellers prefer adding a couple of extra bucks to their shipping costs as their handling fee to cover the materials they used to pack their orders.
There are also numerous online tools you can use to calculate how much you should charge based on factors like the item’s selling price, how much you bought it for, the delivery address, among others.
Of course, aside from these, there’s also a simple formula you can use to determine how much you should charge as a handling fee.
First, you need to divide the time it takes you to pack an order by 60. If it takes you 15 minutes, the formula would be: 15/60 = 0.25
Then, you need to multiply the result by your hourly wage or rate. Let’s say you earn or charge around 10 USD per hour. The formula and total would then be 0.25 x 10 = 2.5 USD. This means it costs you around 2.50 USD to pack a single order and get it ready for shipping.