Because of the way that Etsy displays prices, some non-US sellers choose to set their currency for listings to be shown using US dollars.
Is there an advantage to doing this? Or is it just something that will cost you more in fees? Should you set your listing prices to be shown in US dollars or not?
The benefits of setting prices in US dollars are counteracted by the extra currency conversion fees that a non-US seller will pay. The seller needs to take a look at how much the conversion fees will cost in addition to Etsy’s other fees when making the decision about displaying their prices. If the cost of the additional fees is high, it may not be beneficial to list prices in US dollars if that isn’t your payment account currency.
In general, I wouldn’t recommend listing your prices in US currency if that’s not what your bank account is set up for.
However, there are some reasons to do it, and each seller has to make that decision for themselves.
Table of Contents
- Why set your Etsy listings to show in US dollars?
- Why NOT to list your prices in US dollars.
- Pricing theories and lack of evidence.
- Another reason to list in your country’s currency.
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Why set your Etsy listings to show in US dollars?
The main reason that sellers would want to set their prices to US dollars is that they have a majority of their customers coming from the US, and the seller wants their pricing to remain stable in how it displays. Because of varying exchange rates, prices that are set up in currencies other than the one that the buyers are using will change, and will usually have an odd number of cents on the end of the price, as opposed to being in whole dollars.
There are a lot of theories about pricing, and most of them are weakly researched and unverified. More about that below.
However, people do tend to think of prices that end in .00 to be higher quality, so a lot of sellers want their prices to remain with that as the end digits on their items.
Other sellers want their prices to stay at .99 as the end digits because that’s the convention in their industries.
By setting your shop currency to US dollars, all of your prices will be displayed in USD unless the customer has their currency set differently. (It’s a little complicated how that works, but if you want to read an article I wrote about that you can click here.)
If most of your customers are in the US, this would really be the only compelling reason to set your shop currency in USD instead of in your own country’s currency.
However, if customers in other countries see your listings, the pricing will look odd to them. So it’s basically something that you have to decide based on where most of your customers are located.
Why NOT to list your prices in US dollars.
The most compelling reason why non-US Etsy sellers should NOT use US dollars as their shop currency is the currency conversion fee. If your bank account is set up in a currency that’s different than the currency in your payment settings, you will be charged an additional 2.5% fee when Etsy pays the money from your payment account to your bank account. This will result in less profit for each sale.
(This fee may rise in the future, so make sure to check in Etsy’s current policies for the going rate of the Deposit Currency Conversion.)
So basically, if you choose your shop currency as a different one than your bank account currency, you’ll be paying higher fees.
This is the main reason why most Etsy sellers will choose not to use USD as the listing prices. The tradeoff for consistent pricing is a higher percentage that you pay Etsy, and sellers may decide that it isn’t worth it.
I personally would advise people to keep their prices in the same currency as their bank accounts, because there’s really no reason to stick with USD as far as pricing theory goes.
Pricing theories and lack of evidence.
I mentioned pricing theories earlier, and all I’ll say is that there are few, if any, well-done, thorough studies on eCommerce shopping habits that prove anything as far as which type of price point converts better.
There are a lot of poorly done studies that people use as “evidence” that one price is better than others, but if you really look at those studies they don’t measure online buying behavior. Or any actual buying behavior at all, for that matter.
My feeling is that people who see the uneven prices that happen with exchange rates will investigate further to see why the price isn’t an even number, and they’ll realize that the shop is international.
That could be good or bad if they don’t want to buy internationally, but if that’s the case then it’s probably better to let them know right up front that it might take longer to ship.
In this case, the uneven numbers might work in the seller’s favor to help screen out people who will order without realizing that the shop isn’t in the same country they’re in, and who will complain about it later.
I’ll say again that that’s my theory, so don’t quote me on it, but it might be an argument for letting your prices be shown in the exchange rate version of your country’s currency.
Another reason to list in your country’s currency.
The final reason that I would suggest to list your Etsy items in your country’s currency is that you can control how the prices look for one country if you set it in the currency of that country, but you can’t control it for every other country anyway. No matter how you set it up, exchange rates will make the prices display “off” in countries other than the one that you have the main currency set to. The trade-off of paying the extra fee isn’t worth having stable-looking prices only in one country, in my opinion.
Remember that in business your goal is to make a profit. Every time you add a piece of overhead to your business model, you’re reducing that profit.
It’s up to each seller to decide whether they want to set their currency in USD or not, but in my opinion, you should be more focused on the bottom line and what fees you’re paying.
That extra 2.5% might not seem like much, but it will add up pretty quickly, and it can sometimes make a big difference!
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