Marketplaces desk · Etsy
Etsy is paying part of some US buyers' shipping. Here's what it means for your fees
Etsy is testing a cap on what some US buyers pay for calculated shipping, and covering the gap itself. Your earnings stay the same. The open question is whether your fees also drop by a few cents.
The short version: Etsy is testing a cap on what some US buyers pay for shipping, and Etsy pays the difference. The test was first reported on 16 October 2026. Etsy says your item and shipping earnings stay the same, and you don't need to change any settings. One question is still open: which amount your fees are charged on. On Etsy's own example, the answer is worth a few cents per order, and only in your favour.
What Etsy is doing
Etsy has emailed US sellers about a "limited, temporary, randomized" test. On some eligible orders that use calculated shipping, the buyer is charged a lower, capped shipping price, and Etsy covers the gap.
Etsy's own example, from the email as reproduced by Value Added Resource (16 Oct 2026, updated 17 Oct): your calculated rate is $10, the buyer is charged a capped $7.99, and you still receive the full $10. Etsy pays the other $2.01. The email doesn't say whether $7.99 is the real cap or just an example.
In Etsy's words: "If one of your orders qualifies, the buyer may pay a lower shipping cost, but your standard item and shipping earnings will stay the same."
How you'll know an order was in the test
The difference shows as "Etsy-funded shipping" in that order's Order Details, and your Payment Account still shows your normal shipping revenue. Etsy says no listing or shipping-setting changes are needed. The reports don't say whether a shop can opt out.
The open question: which amount your fees are charged on
Etsy charges its 6.5% transaction fee on the item price plus shipping. US payment processing is 3% + $0.25 on what the buyer pays, including sales tax. If an order came to you through Offsite Ads, there's also a 15% fee, capped at $100 an order (12% once a shop has made $10,000 or more in sales over any rolling 365 days; from then on the 12% rate stays) (Fees & Payments Policy, updated 5 Oct 2026, and Payments Policy, both read 12 Oct 2026).
The email doesn't say whether those fees are charged on your full $10 or on the $7.99 the buyer paid. Etsy hadn't answered Value Added Resource's questions about fees when it published. Here's what it's worth on Etsy's example, if the fees are charged on the lower amount:
| On the $2.01 Etsy covers | Saving to you |
|---|---|
| 6.5% transaction fee | $0.13 |
| 3% processing (the $0.25 per order doesn't change) | $0.06, a little more with sales tax |
| Most orders | about $0.19 |
| Plus 15% Offsite Ads, only if the order came through it | +$0.30 (+$0.24 at 12%) |
| An Offsite Ads order | about $0.43–$0.49 |
If the fees are charged on the full $10, nothing changes for you. This is an illustration from Etsy's single example, not a promised saving.
Why Etsy is doing this
Etsy has said before that high shipping prices put buyers off. Since 2024 it has favoured eligible US listings with shipping under $6 in search. Listings on calculated shipping were left out of that change, as Value Added Resource reported at the time. This test looks like Etsy checking whether a lower shipping price brings more sales to calculated-shipping shops, with Etsy paying for it rather than you. Value Added Resource reports Etsy saying the results may inform future improvements to shipping. Etsy hasn't said what those might be.
What to do
- No settings to change. Keep your calculated shipping as it is.
- Watch your Order Details for "Etsy-funded shipping" lines, so you know if your shop is in the test.
- Compare the full fee breakdown on one of those orders with a normal order. If something doesn't add up, ask Etsy Support.
- Know your real take-home. If shipping is a big part of your price, run one order through the free fee calculator for Etsy sellers to see what Etsy leaves you after every fee.
Sources, checked 21 Oct 2026
- Etsy email to sellers, quoted by Value Added Resource (Liz Morton), 16 Oct 2026, updated 17 Oct 2026. valueaddedresource.net
- Also reported by Shopifreaks (summarises and links to the Value Added Resource report), Oct 2026. shopifreaks.com
- Etsy Fees & Payments Policy (updated 5 Oct 2026), read 12 Oct 2026. etsy.com
- Etsy Payments Policy (updated 31 Jul 2026), read 12 Oct 2026. etsy.com
Applies to: US Etsy sellers using calculated shipping.
How this was made: an AI research agent gathered the sources and drafted this piece. Our editor checked every claim and number against the sources above before publication. Nothing here is legal, tax or financial advice. Spotted an error? Tell us and we'll correct it on this page.