Should I Charge A Handling Fee On Etsy?

When you set up your calculated shipping profiles on Etsy, you’ll probably notice the optional handling fee. Should you use this, or is it something that you don’t need to worry about?

Handling fees on Etsy aren’t required, and you don’t need to add one to your listings if you don’t want to. Some people use them to collect a fee to cover the cost of packaging and other incidentals related to shipping, and also to cover shipping insurance.

If you do decide to use a handling fee, you need to watch out, though, because Etsy calculates it per item, not per order!

Avoid this etsy shipping mistake that can cost you sales

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How does Etsy calculate the handling fee?

When you enter a handling fee on a calculated shipping profile, it’s added to each item in the order. It’s not added to the order itself, but to each item individually.

So for example, let’s say that you have a $1 handling fee included in each shipping profile. If someone buys three items, they’ll have an additional $3 fee added to the cost of shipping for the order.

If you’re not careful, this can add up really quickly and make the shipping cost a lot more than it really does.

This has happened to people in my Facebook groups in the past, and it’s because it’s not explained well in the spot where you set the handling fee up.

Handling fee in the calculated shipping profile.
Handling fee in the calculated shipping profile.

Does the customer see the handling fee?

The Etsy customer doesn’t see the handling fee because it’s added to the cost of shipping. If you have free shipping on the listing, The handling fee should only be charged if the customer requested a shipping upgrade.

I set up a test shipping profile to see how this looks compared to a shipping profile with no handling fee.

In this photo, the item is in the cart with my normal shipping profile, which has a cost for all three levels of shipping. Notice that Priority is $12.60 and Priority Express is $41.90:

Regular shipping profile with no handling fee
Regular shipping profile with no handling fee

For the test profile, I set free shipping for the item but there was a $3 handling fee.

You can see that the cost for first class is showing up as free, but if the customer chose a shipping upgrade the price is $3 higher than the other prices in the regular shipping profile.

The $3 fee has been added to the cost of the upgrades without any mention of it being a handling fee, the customer just sees it as one price that isn’t itemized out:

Free shipping with a handling fee
Free shipping with a handling fee

If there was a cost for the first-class shipping, the $3 fee would be added to that too. The customer doesn’t see that there’s a handling fee added in.

The problem comes when you have a handling fee and people buy multiple items.

In this photo, I had the regular shipping profile but I added a $3 handling fee to it. I put nine of the molds into my cart, and this is the price that Etsy calculated:

Regular shipping profile with a $3 handling fee added to 9 items.
Regular shipping profile with a $3 handling fee added to 9 items.

It moved the required shipping up to priority because of the item’s weight, but it also added $27 to the normal shipping total (9 items x $3).

That means that the customer would see over $50 to ship an already expensive order, and that would either make them decide not to buy it, or to buy it and be overcharged.

Watch out for overcharging.

So basically, if you add a handling fee, your customer could end up with a huge shipping bill, and you might not even understand why.

It looks like Etsy only charges one handling fee per order, but you can see that it adds up per item instead.

Take this into account when you’re deciding whether to charge a handling fee or not, or you might end up having to refund people who are overcharged in a big way!

Click to watch the video

Ironically, as I was messing around with the different shipping profiles for this test, someone bought the large starfish mold while I had the $3 handling charge active on it.

I had to write her to explain and tell her that I’ll be refunding the overage when I ship her order!

Kara Buntin

Kara Buntin has run a profitable home-based business since 1999, and has a background in art, theater design, and cake decorating. She's a top Etsy seller with over 51,000 sales on Etsy and her own website, and helps other home-based business owners with their business goals and SEO. She founded the Artisan Shopping Directory website to promote the artisans who are members of her EShop Success marketing program.

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