Marketplace fees are charged by online marketplaces like Etsy, eBay, and Amazon to sellers who use their platforms to sell products. The fees cover the costs of running the marketplace and providing services to both buyers and sellers. Marketplaces typically charge fees in a few different ways:
Listing fees – This is a flat fee charged to post a new product listing on the site. Listing fees on Etsy are $0.20 per listing, while eBay charges $0.30 to list most products.
Final value fees – This is a percentage commission on the total sale price of an item. Etsy charges 5% of the item price, plus payment processing fees. eBay’s final value fees vary by product category but range from 4-15% of the total sale.
Subscription fees – Some marketplaces charge an ongoing periodic fee for seller accounts. eBay has optional “Store” subscriptions that start at $21.95 per month. Amazon’s Professional Selling plan costs $39.99 per month.
Payment processing fees – There are also fees for processing transactions, which are typically 2-3% of the sale price plus a flat per-transaction fee.
So in short, yes – online marketplaces like Etsy, eBay, and Amazon do take a percentage of your sales in the form of commissions and fees. Sellers pay these fees in exchange for access to the marketplace’s huge visitor traffic and existing customer base. The exact fee structures vary by site.
Etsy Fees
Etsy charges several different fees:
Listing fees – $0.20 per item listed. This fee is charged when a new item is posted in your Etsy shop.
Transaction fee – 5% of the item price including shipping. This is charged on each completed sale.
Payment processing fees – 3% + $0.25 per order paid for by credit card. This covers the cost of processing credit card transactions.
Offsite ads fee – Up to 15% of the order total if Etsy offsite ads result in a sale. This is an optional program sellers can opt into.
Here is an example of how the fees add up on a $20 item with $5 shipping:
| Item Price | $20 |
| Shipping | $5 |
| Listing Fee | $0.20 |
| Transaction Fee (5% of $25) | $1.25 |
| Payment Processing (3% of $25 + $0.25) | $0.80 |
| Total Fees | $2.25 |
So the total fees would be $2.25 on this fictional $25 order, which is 9% of the total sale value.
Etsy also charges a $0.20 fee to renew listings every 4 months. And shops are charged a billable monthly fee for optional tools like promoted listings and pattern by Etsy. So fees can add up quickly, especially when you make frequent sales.
Overall though, Etsy’s fees are competitive for the market and worth it for many sellers, considering the site’s large base of buyers.
eBay Fees
eBay uses a more complex fee structure that depends on the seller account type:
Basic Store subscription – $21.95/month. This includes 100 zero insertion fee listings per month.
Insertion fees – For auctions, $0.30 per listing if you go over your monthly allowance. Fixed price insertion fees vary by category.
Final value fees – 10% of the total amount of the sale for most categories. Plus $0.30 closing fee per sale. Some categories like vehicles have lower final value fees.
Payment processing fees – PayPal charges 2.9% + $0.30 per transaction for payment processing.
For example, if you sold a $100 item, the fees would be:
| Item Price | $100 |
| Insertion Fee | $0.30 |
| Final Value Fee (10% of $100) | $10 |
| Closing Fee | $0.30 |
| PayPal Fee (2.9% of $100 + $0.30) | $3.20 |
| Total Fees | $13.80 |
So the total eBay fees on a $100 sale would be around 13.8%. Higher-volume sellers get discounted final value fees under 5%.
eBay also has optional features like promoted listings and shipping discounts that add to monthly costs. But overall, eBay can be more affordable than Etsy for high volume sellers.
Amazon Fees
Selling on Amazon has several fee components:
Professional seller monthly fee – $39.99 per month. This covers selling costs and optional add-ons.
Referral fees – 15% of the total sales price for most categories. Lower rates apply for certain products like jewelry.
Variable closing fee – $1.80 per item sold for clothing and shoes, lower for other categories.
FBA fees – Fulfillment by Amazon storage fees, pick & pack costs, and weight handling charges if you use FBA.
Payment processing – 2.9% + $0.30 per order for credit card processing.
For example, if you sold a $50 kitchen appliance and fulfilled it yourself, the fees would be:
| Item Price | $50 |
| Referral Fee (15% of $50) | $7.50 |
| Closing Fee | $1.00 |
| Payment Processing | $1.65 |
| Monthly Fee | $39.99 |
| Total Fees | $50.14 |
So on this example order, the fees equal 100% of the item price. Monthly subscription costs add up quickly on Amazon. However, referral fees get cheaper at higher monthly sales volumes. Overall fees are generally higher than Etsy or eBay.
Amazon also charges many additional fees for optional programs like sponsored ads and product warehousing & delivery (FBA). So it’s one of the most expensive marketplaces.
Pros and Cons of Marketplace Fees
While marketplace fees might seem high at first, selling on a site like Etsy, eBay, or Amazon has major advantages:
Pros
- Large existing customer base.
- Exposure for sellers’ products.
- Built-in trust for buyers.
- No costs for building your own website.
- Optional business loans available.
Cons
- Reduces profit margins on sales.
- No direct customer relationships.
- Little brand control on third-party sites.
- Mandatory use of marketplace payment processing.
So while sellers do lose a cut of each transaction to fees, marketplaces can be an efficient way to jumpstart an ecommerce business. Sellers gain instant access to millions of buyers, with less effort required up front.
Advanced sellers can also transition to their own independent online store over time while keeping a marketplace presence. This blended approach provides the most flexibility.
Ways Sellers Can Reduce Marketplace Fees
Some strategies sellers can use to decrease their marketplace costs include:
- Using free shipping promotions to avoid payment processing fees on shipping costs.
- Negotiating lower final value fees once high sales volumes are reached.
- Finding products that fall into low fee categories like handmade, books, collectibles, etc.
- Listing efficiently in batches during free listing promotions.
- Curating shop sections with lower commission rates if offered.
- Qualifying for marketplace small business programs like eBay’s Retail Revival.
With careful management, marketplace fees can be minimized even if not completely eliminated.
Selling Fees Are the Cost of Marketplace Convenience
In the end, sellers must decide if giving up a percentage of sales is worth the convenience and exposure of selling through large marketplaces. For most small businesses and crafters, the trade-off makes good financial sense in the early years.
Marketplace fees provide access to millions of buyers without traditional marketing costs. As businesses grow, expanding into additional sales channels helps diversify and reduce commissions over time. But marketplaces will likely remain an important sales channel for established sellers as well.
Conclusion
Yes, popular online marketplaces like Etsy, eBay, and Amazon do take a cut of seller transactions through listing fees, final value fees, and subscription costs. These fees range from 5-15% of item prices for most categories.
Marketplaces charge commissions in exchange for services like payment processing, traffic, and marketplace management. While reducing profit per sale, fees provide access to large built-in customer bases for sellers.
There are ways for sellers to minimize fees, such as negotiating discounts or selectively selling lower-fee categories. But fees are ultimately part of the trade-off for marketplace convenience. With smart management, most sellers can achieve healthy profits even when marketplace commissions are taken into account.