When people start selling on Etsy, they may not be aware that there’s a hidden fee lurking in the background of their shops. It’s the offsite ads program, and I’ll explain why it’s hidden in a bit.
But first, what is the offsite ads program on Etsy?
Etsy’s offsite ads is a program where Etsy places the ads on behalf of the Etsy seller, then if a customer clicks through to that seller’s shop and makes a purchase, the seller is charged a percentage of the sale. This percentage will vary depending on whether the seller has been permanently opted into the program or not, based on the previous 365 days of income.
The tricky thing about the offsite ads fee is that Etsy makes it difficult to find information about your offsite ads fees, and also how to opt out of the program if you can.
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Table of Contents
- How do Etsy offsite ads work?
- What are the Etsy offsite ads fees?
- Are Etsy offsite ads worth it?
- Can you opt out of Etsy offsite ads?
- How to opt out or opt in to Etsy offsite ads.
- Where to see your offsite ads sales.
How do Etsy offsite ads work?
Etsy’s offsite ads program works by Etsy placing ads on outside platforms and websites, such as Google shopping ads, Pinterest ads, Facebook, Bing, and others that Etsy tries out. Etsy has control of the platforms that they choose, and uses the platform’s advertising data plus their own to decide what to advertise. Etsy sellers have no input into any of the decisions regarding what is advertised in offsite ads.
Etsy has advertised on outside platforms for years, but only started charging sellers a percentage since 2019. They still pay for the majority of offsite ads, because the percentage the sellers pay only covers about 40% of the cost of the ads, according to recent statements from Rachel Glaser, Etsy’s CFO.
Etsy sees the benefit of running the ads even though they still pay the majority of the cost because they know that driving traffic to the platform overall has the benefit of increasing awareness of Etsy as a whole.
The offsite ads fee has a 30-day cookie attached to it, which means that if a buyer clicks on an offsite ad, comes to your shop, and buys something, you’ll also be charged the fee again if they return within 30 days to buy something else.
However, if a buyer clicks on an offsite ad for a different shop, comes to Etsy, and buys from your shop instead, you won’t pay the fee. You only pay it if the customer clicks on an ad for one of your listings and purchased from you.
What are the Etsy offsite ads fees?
Etsy’s offsite ads fees are 12% for shops that have made over $10,000 USD in the previous 365 days, and 15% for sellers who have made less than $10,000 USD in that timeframe. This fee is charged on both the cost of all items purchased, and the cost of shipping. The offsite ads fee is capped at $100 per transaction, so you will never be charged more than that regardless of the final value of the item that was sold.
These percentages amount to about an 8.3 times Return On Ad Spend (ROAS) for the 12% fee, or a 6.7 times ROAS for the 15% fee.
For a lot of advertising, that’s considered to be a good ROAS, but you have to remember that ROAS isn’t the same as ROI (Return On Investment.) If the cost of the offsite ads is too high for your profit margins, you might want to opt out of the program.
You also have to remember that the fee is charged on both cost of ALL items that the customer buys, AND the shipping cost, so you’re losing money on shipping right away unless you account for that in your pricing.
Are Etsy offsite ads worth it?
Etsy’s Offsite Ads program might be worth it for the additional visibility that a listing will get from being advertised on other platforms, but the cost may be prohibitive. The cost of the ads needs to be treated as an additional expense and calculated into the cost of the item to determine a profit margin. In some cases, the additional cost may take too much of the profit, especially for lower-priced items.
Whether it’s too much or just right for your business is going to be different for everyone. You should sit down and do some math to figure out if using offsite ads will take too much out of your profits, then make your own decisions.
(For an article about Etsy offsite ads notifications you might receive, click here.)
I removed some items from my Etsy shop completely, because Etsy had started advertising them on Google in heavy rotation, and the additional advertising costs weren’t worth it to me.
You also have to consider whether the free shipping guarantee is going to be an issue, because if multiple items are ordered and you have to pay the offsite ads fee, plus free shipping due to the guarantee, you could actually be losing money with every order.
I removed the free shipping guarantee from one of my shops because one of the supplies I sold in it ended up being advertised on offsite ads, then people would buy enough to get the free shipping, but it made the package heavy.
I would end up having to pay for priority shipping, plus the offsite ads fee, and it wasn’t worth it to sell that item anymore. Keep an eye on your expenses to make sure the same thing doesn’t happen to you!
Can you opt out of Etsy offsite ads?
If you have made less than $10,000 USD in the previous 365 days, you can opt out of offsite ads. This will mean that your listings won’t be shown on third-party platforms where Etsy advertises, and you won’t run into any fees. If you have made over $10,000 USD in the previous 365 days, your shop will be locked into the program permanently regardless of your future income, and you can’t opt out anymore.
The benefit of using Etsy offsite ads is the additional visibility that your listing might receive if you’re participating in the system.
However, even if you opt in, there’s no guarantee that your listings will be shown on another platform. Etsy uses their own data in combination with the data from the other platform to decide what to advertise.
Using the offsite ads system may or may not result in more sales and more fees, so it’s a roll of the dice.
How to opt out or opt in to Etsy offsite ads.
To opt out of Etsy offsite ads:
- Go to your Etsy shop dashboard.
- Click on Settings.
- Click on Offsite Ads.
- Click the button to opt in or out of the ads.
If you’re unable to opt out because your income was over the $10,000 threshold, you won’t have the option of the s to turn ads on or off.
I have to say that it’s a little shady for Etsy to hide the settings for offsite ads in the settings section. It should be in the marketing section with the other advertising elements. Etsy likes to say that very few sellers opt out, but the majority of new sellers (and many old ones) probably don’t even know where to go to opt out!
Where to see your offsite ads sales.
To see your Etsy offsite ads sales, do to your stats page and scroll down. If you’re opted into the program you’ll see a section about Offsite Ads under the table that shows where your traffic is coming from. Click on “see more info on your offsite ads” and you’ll be taken to a page that shows if anything sold and how much the fees were. The fees will also show up as a line item in your payment account.
(Again, this is a little odd for Etsy to put this in the stats section. The offsite ads information is scattered around and many sellers don’t seem to know how to find it.)
If you look at the fee for the first item in the photo, it’s $5.47, but the item that’s shown is only $16.00 (You can’t see that part here.) This means that the customer clicked on an offsite ad, came to my shop, then bought more than one thing.
I can’t opt out of the program, so I had a 12% fee levied on the total cost of the sale, not just on the item they clicked on to begin with.
If your fees seem to be higher than they should be, it’s probably because the items that were purchased aren’t all shown. You can check this in your orders to see what the actual total of the order was.
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