Sales but no profit on Etsy: five usual losses and how to check each

When an Etsy shop makes sales but little or no profit, the money usually goes to five places: shipping that costs more than buyers pay, Offsite Ads fees that aren't built into prices, Etsy Ads that don't earn back what they cost, prices set too close to cost, and packaging nobody counted. Each can be checked with a few numbers from Shop Manager. In the example shop below, the first three come to about $446 a month.

The example shop

The figures in this post use the site's example candle shop, with made-up numbers: 100 orders a month of a $30 candle, $5 shipping charged, $8 of materials, a $7 label, sales past $10,000 a year, and Etsy Ads at $10 a day with a ROAS of 1.5. Here is one order.

The shop isn't losing money on each order, but its check-up grade is Watch: about $446 a month goes to the losses below, about $5,356 a year.

1. Shipping that costs more than buyers pay

What it is: the label plus packaging costs more than the shipping you charge, so the difference comes out of the item price on every order. Etsy also charges its transaction and processing fees on the shipping the buyer pays, per its Fees & Payments Policy.

How to check: find what your labels cost in Shop Manager under Finances, then Payment account, and compare it with the shipping you charge. In the example, each order costs about $8.00 to ship ($7.00 label plus $1.00 packaging) and the buyer pays $5.00, so about $3.00 an order goes missing, about $300 a month.

One fix is to raise the item price to about $33.36 and keep shipping at $5.00. Etsy's Seller Handbook says that since October 1, 2024, US listings with domestic shipping under $6 are favored in search. If orders hold, the shop would keep about $300 more a month, and orders could fall by about 17% before the change leaves it worse off. The shipping gap calculator works this out at your numbers.

2. Offsite Ads fees not priced in

What it is: when a buyer clicks one of Etsy's ads on another website and buys within 30 days, Etsy charges a fee on that order. Per Etsy's Offsite Ads help page, it is 15% for shops under $10,000 in the past 365 days, which can opt out, and 12% once a shop reaches $10,000, for the life of the shop, at most $100 an order.

How to check: in Shop Manager, go to Marketing, then Offsite Ads, and see what share of your sales came through them. If you don't know yours yet, one sale in 10 is the starting guess our calculators use (the figure Etsy gave when it launched the program in 2020; the news report that carried it is no longer online). At that 10% share, the example shop pays $4.20 on each attributed $35.00 order, $0.42 spread over every order, about $42 a month.

The fix is to raise prices about 1.3%, roughly $0.47 on a $30.00 candle. If orders hold, that keeps about $42 more a month. A shop past $10,000 can't opt out. The Offsite Ads calculator uses your own share.

3. Ads that cost more than they bring in

What it is: Etsy Ads charge per click, up to your daily budget, per Etsy's help page on ad campaigns. An ad sale still pays Etsy's fees, materials, packaging and the label, so ads only pay back when your ROAS (ad revenue ÷ ad spend) clears a break-even line.

How to check: read your ROAS for the last 30 days on the Etsy Ads page and compare it with your break-even ROAS. The example shop spends $300 a month and its ads bring about $450 in sales at ROAS 1.5, which earns about $196 after costs. Its ads pay back only at ROAS 2.30 or more, so they cost about $104 a month more than they bring in.

The fix is to turn off ads on listings with ROAS under 2.3. If your other orders hold, that keeps at least $104 more a month. Some buyers find you through ads and come back later, so give a change 30 days before judging it. The ads break-even calculator finds your own line, and our post on whether Etsy Ads are worth it walks through the math.

4. Prices set too close to cost

What it is: the price covers materials but not everything else that comes out of an order. The example's $30 candle covers its costs. The same candle at $12 does not: each $17.00 order keeps −$1.27, and the shop loses about $127 a month before paying anyone for their time.

How to check: work out the item price where an order keeps $0. For this candle without ads, that break-even price is $13.42. With the example's ads spread over orders, $3.00 each, it rises to $16.78. The pricing calculator finds the price for any profit you want per order. A higher price can lose orders, so change one thing at a time.

5. Packaging nobody counted

What it is: boxes, tissue, filler, tape and inserts are bought in bulk, so they rarely show up as a cost on any one order. The check-up uses $1.00 an order when you don't know yours, a typical figure that is only weakly sourced.

How to check: add up a month of packaging receipts and divide by that month's orders. If the example shop's real figure were $2.50, each order would keep $10.30 instead of $11.80, about $1,030 a month instead of $1,180. Its shipping gap would grow to $4.50 an order, about $450 a month. The shipping gap calculator takes your packaging cost too.

The five checks side by side

Two more places money goes, refunds and sales or coupons, aren't in the example. The check-up adds them when you go deeper.

Your own shop

Each check above takes a few minutes with a calculator. If you'd like your own numbers all at once, the check-up works through a month of your shop from seven answers and lists each loss with its fix, at your numbers, if orders hold.