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Platform Analysis

Understanding Platform Fees: Etsy vs Amazon vs Your Own Website

Mohamed Sahbi Ghaeib
January 10, 2025
6 min read

Choosing the right platform to sell your products can make or break your profitability. While each platform offers unique advantages, understanding their fee structures is crucial for making informed decisions about where to invest your time and energy.

Why This Matters

Platform fees can consume 10-25% of your revenue. Understanding these costs helps you price competitively while maintaining healthy profit margins.

Platform-by-Platform Breakdown

🎨

Etsy

Total fees: ~10-15% of revenue

Fee Structure

listing$0.20 per listing
transaction6.5% of order total
payment3% + $0.25
advertisingOptional, typically 10-15%
currency4% for international sales
Best For

Handmade, vintage, and craft supplies

Advantages

  • βœ“Built-in audience for handmade items
  • βœ“Strong SEO and discoverability
  • βœ“Easy to set up and manage
  • βœ“Established trust with buyers

Disadvantages

  • βœ—High competition
  • βœ—Limited customization
  • βœ—Dependent on platform policies
  • βœ—Fees can add up quickly
πŸ“¦

Amazon Handmade

Total fees: ~15-20% of revenue

Fee Structure

listingFree
transaction15% referral fee
paymentIncluded in referral fee
advertisingOptional, $0.20+ per click
fulfillmentOptional FBA fees vary
Best For

Scalable handmade products

Advantages

  • βœ“Massive customer base
  • βœ“Prime shipping benefits
  • βœ“Advanced analytics
  • βœ“Global reach

Disadvantages

  • βœ—High referral fees
  • βœ—Strict policies and competition
  • βœ—Limited brand control
  • βœ—Price-focused customers
🌐

Your Own Website

Total fees: ~5-8% of revenue + fixed costs

Fee Structure

platform$29-299/month (Shopify)
payment2.9% + $0.30
hosting$10-50/month
marketingVariable budget
maintenanceTime or contractor costs
Best For

Established brands with marketing budget

Advantages

  • βœ“Full control over branding
  • βœ“Direct customer relationships
  • βœ“Lower transaction fees
  • βœ“Higher profit margins

Disadvantages

  • βœ—Need to drive own traffic
  • βœ—Higher upfront costs
  • βœ—Technical maintenance required
  • βœ—Building trust takes time

Real-World Fee Comparison

Let's compare the actual costs for selling a $100 product across different platforms:

Fee Calculator: $100 Product Sale

Etsy

Transaction Fee (6.5%)-$6.50
Payment Processing (3% + $0.25)-$3.25
Advertising (12%)-$12.00
Total Fees:-$21.75
Net Revenue:$78.25

Amazon

Referral Fee (15%)-$15.00
Advertising (8%)-$8.00
Total Fees:-$23.00
Net Revenue:$77.00

Own Website

Payment Processing (2.9% + $0.30)-$3.20
Platform Fee (monthly allocated)-$2.00
Marketing (10%)-$10.00
Total Fees:-$15.20
Net Revenue:$84.80

Key Insight: Your own website generates $7.55 more profit per $100 sale compared to Etsy, even after accounting for marketing costs.

Hidden Costs to Consider

Marketplace Platforms

  • Currency conversion fees: 2.5-4% for international sales
  • Advertising costs: Often necessary for visibility
  • Return/refund fees: Platform policies may favor buyers
  • Policy compliance costs: Time spent meeting platform requirements

Your Own Website

  • Development and design: Initial setup or hiring developers
  • Marketing and advertising: Driving traffic to your site
  • Security and maintenance: SSL certificates, updates, backups
  • Customer service: Handling inquiries and support directly

Strategic Recommendations

Start with Marketplaces

Begin on established platforms like Etsy or Amazon to validate your products and build initial sales.

  • β€’ Lower barrier to entry
  • β€’ Built-in customer base
  • β€’ Learn what sells best

Diversify Your Channels

Don't rely on a single platform. Spread your risk across multiple channels.

  • β€’ Reduces dependency risk
  • β€’ Allows testing different strategies
  • β€’ Maximizes market reach

Graduate to Your Own Site

Once you have steady sales and a customer base, consider your own website for higher margins.

  • β€’ Higher profit margins
  • β€’ Direct customer relationships
  • β€’ Complete brand control

Which Platform is Right for You?

Your SituationRecommended PlatformWhy
Just starting outEtsyLow barriers, built-in audience
High-volume, scalable productsAmazon HandmadeMassive reach, logistics support
Established brand with marketing budgetOwn WebsiteHigher margins, brand control
High-end, luxury productsOwn Website + Select MarketplacesPremium positioning, curated presence
Testing new productsMultiple PlatformsDiversified testing, risk mitigation

Key Takeaways

  • Factor all costs into pricing: Don't just look at headline feesβ€”include advertising, currency conversion, and hidden costs.
  • Start where your customers are: Begin on platforms with established audiences, then expand.
  • Diversify your presence: Don't put all your eggs in one platform's basket.
  • Track performance by platform: Use tools like PricePro to monitor profitability across channels.

Ready to Optimize Your Platform Strategy?

PricePro's platform fee calculators help you compare real costs and optimize pricing across all your sales channels.