WhatSheSaidStitches
Community Member

Fees, currency exchange rates have me confused

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I thought I understood all this but since my spreadsheets are making no sense at all, I find I need help... again! I have two Etsy shops, but I will use the one that sells digital downloads for USD$2.99 each.

FIrst, I am a Canadian seller listing in US sell prices in this shop, with deposits into a Canadian bank account.

An item is listed for USD2.99, but today, in Canadian funds, it sells for CDN4.14. That's a 38.5% exchange rate! PayPal's exchange rate today is 30%.

How does Etsy determine its exchange rate?

Listing fee: USD.20, which converted to CDN.27, yesterday

Shipping fee: My products are digital downloads so there is no shipping fee, but if there were it is my understanding it would be 5% of the shipping charge. But again is the revenue converted to Canadian from US and then calculated?

Transaction fee: As I understand it, it is 5% of the sell price (excluding any local sales tax Etsy collected from the buyer to remit to the state or province or nation). Based on USD2.99, and then converted to CDN? Or based on CDN$4.14?

Payment processing fee: Here's the formula as I understand it. The total revenue (sell price + shipping), in this case CDN$4.14 X (2.9% +.25), if item was paid for in CDN$. Otherwise there is an additional .008% currency conversion fee?

So, (Sell price + Shipping) minus (Listing renewal fee) minus (Shipping 5% fee) minus (Transaction 5% fee) minus (Payment processing fees). Is that right? And at what point does the exchange rate come in and where do I find it?

Appreciate any and all advice, feedback. TIA

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CraftyCornishMaids
Community Member

Re: Fees, currency exchange rates have me confused

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You can't change the currency you are paid in, you will be paid in canadian dollars.

Etsy will charge you 2.5% to convert back from US$ you list in, to canadian dollars.

Etsy won't let you change to a bank in the USA

 

https://help.etsy.com/hc/en-us/articles/115015775908-Change-Bank-Account-for-Receiving-Etsy-Payments...

extract........

Note: You may only change bank accounts if a new account is in the same currency and country as a previous one. It’s not possible to change to a bank account that operates in another currency and country at this time.

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Marmalady
Community Member

Re: Fees, currency exchange rates have me confused

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Fees are calculated in US$ and then converted to your own currency --attracting a 2.5% currency conversion charge 

So if you are selling at US$2.99, the 5% transaction fee will be US$0.1495, rounded up to 15c. This is then converted to Canadian$ using Paypal's exchange rate and includes a currency conversion charge

If you sell in Canadian $, this would be converted to US$ before the transaction charge is calculated and then converted back to Canadian$ to appear on your Payment Account

It is this multiple conversions that has caused non_US sellers to be overcharged on their fees (about 5.2% rather than 5%)

 

As a non_US seller, you will also pay higher Payment Processing fees than US sellers do -- but I am not sure how they are affected by you selling in a different currency to yur own

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CraftyCornishMaids
Community Member

Re: Fees, currency exchange rates have me confused

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Etsy uses paypals conversion rate, then adds 2.5% conversion fee.

transaction fees should be 5%, but etsy is charging 5.2% at the moment

payment processing fees are

Canada (domestic orders or orders from the US)       3% + 0.25 CAD
Canada (international orders) 4% + 0.25 CAD

If the sale is to a state or country that charges sales tax/GST/VAT/QST on digital downloads, this tax is added to the price, and you pay the payment processing fee on the full amount.
Not sure if you have standalone paypal, but if so, etsy claims back more in VAT, sales tax etc than it adds on to the price, on digital downloads.

Also, not sure where you are in Canada, as your location says California, USA ( which is illegal, as you sell to the EU), but if you are in Quebec, Etsy will be charging you QST on your Etsy fees

 

Etsy has never published the exchange rate, which is why the bill used to be so useless, as you could never check it, and by the time you paid it, the exchange rate had changed - it's onlt now we've found out about all the errors, as it is now in local currency.

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WhatSheSaidStitches
Community Member

Re: Fees, currency exchange rates have me confused

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Ok, so sell in CDN$ to avoid extra fees for currency conversion. BUT if I have a stateside bank account, can I have funds deposited into that US account, and list in USD, amd would I then minimize my fees by avoiding this currency conversion charge?

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CraftyCornishMaids
Community Member

Re: Fees, currency exchange rates have me confused

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You can't change the currency you are paid in, you will be paid in canadian dollars.

Etsy will charge you 2.5% to convert back from US$ you list in, to canadian dollars.

Etsy won't let you change to a bank in the USA

 

https://help.etsy.com/hc/en-us/articles/115015775908-Change-Bank-Account-for-Receiving-Etsy-Payments...

extract........

Note: You may only change bank accounts if a new account is in the same currency and country as a previous one. It’s not possible to change to a bank account that operates in another currency and country at this time.

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TigersandDragons
Community Member

Re: Fees, currency exchange rates have me confused

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I know a few Canadian sellers that have their shop location set to the USA, and their American Bank account attached to Etsy, not just a Canadian USD account, but a bank account that is set in the USA.  But they set it up that way when they opened their shops, and it was years ago. 

These sellers also ship their US orders using USPS labels, they either travel over the border, or pay a courier to take their orders over the border, to mail out.

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SewItAllPatternsEtc
Community Member

Re: Fees, currency exchange rates have me confused

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Still confused. Or confused again.

If an item is listed with two variations, and one of those variations sells out, is there a renewal fee for the listing and the remaining variation?

If so, variations don't make sense, do they? It's not like you save on fees.

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ValleyVariety
Community Member

Re: Fees, currency exchange rates have me confused

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You only would save on fees when you originally list, because it's only one listing, for .20.

Selling a variation is like selling one from a quantity of more than one.  Etsy automatically relists the item and charges again.

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SewItAllPatternsEtc
Community Member

Re: Fees, currency exchange rates have me confused

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So let me see if I have this right....

I had a listing with two variations in size, so the inventory was 2, one of each size. The original listing fee was .20

One of those variations sold, leaving an inventory of 1, in the size that was not sold. Etsy renews the listing automatically because there is still an inventory of 1, at a fee of .20

I have another of the variation that sold, so I renew it, and Etsy charges me .20 again for the renewed listing.

I have now paid three times for this one listing with two variations?

I fail to see the advantage of listing with variations.

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TigersandDragons
Community Member

Re: Fees, currency exchange rates have me confused

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You paid 3 times because

- two items sold (paid for each listing)

- you currently have an active listing for the 3rd item.

Variations are an advantage because you don't have to pay up front for each variation, only if you SELL each variation.

So if for instance I had 4 sized of a pendant (and to make it easy, I only have 1 quantity of eah) - with variations I can put the 4 sizes in 1 listing, with a quantity of 1 on each.   If the large sells, the listing renews, and there is still the potential to sell the other 3, but I've only paid for one listing renewal 

Otherwise I would have to pay for 4 separate listings up front (for each size), without any guarantee that I would sell ANY of the listings in the four month period. 

With sewing patterns it's definitely an advantage to use variations because if you listed 4 sizes separately, if your customer found the listing for the pattern they wanted, but it was not the size they wanted they would have to hunt/search for your other listings.  Now all the sizes are in ONE listing.  Also you could have 4 sizes in one variation, but only sell 1 in the four month period, so you have saved on listing fees in that period (,40 cents instead of ,80).

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MsOpalWorld
Registered Member

Re: Fees, currency exchange rates have me confused

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I'm having trouble figuring out where this 2.5% is charged and how. I am an Aussie seller, listing in AUD and my buyers see listings usually in their own currency. 

 

I've lost sales due to the fact that I cannot get my prices to line up with their currency and expectations. During one negotiation they wanted to pay $650USD, so I set the price in the equivalent AUD amount and the buyer was seeing $675USD. I lost the sale because I had to have a stab in the dark three times for how much $650USD should be in AUD and I couldn't get it right. What on earth is going on with Etsy?!?

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TreeTreasuresCanada
Community Member

Re: Fees, currency exchange rates have me confused

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@MsOpalWorld  The best way to get it right is to look at your item in AUD, then change your currency to USD.  Calculate the exchange rate based on these two figures and apply that rate so that your US customer sees the expected amount.  It is best to also warn your customer that exchange rates can change from hour to hour.

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MsOpalWorld
Registered Member

Re: Fees, currency exchange rates have me confused

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I have tried that but the customer keeps seeing the item at $25USD more than it should be. Apparently Etsy use their own exchange rate that differs from the actual exchange rate, however they refuse to publish it. 

 

I would like to know where that extra $25USD that the buyer pays would be going as they're paying it but I'm not receiving it. 

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CraftyCornishMaids
Community Member

Re: Fees, currency exchange rates have me confused

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There are two things here,

firstly etsy uses a retail exchange rate, which is worse than the bank exchange rate, and they add 2.5% to the price, for currency conversion,

and, if the customer is in a US state, that requires etsy to collect sales tax, that will be added by etsy, etsy collects it, and sends it to the state, in this case, the sales tax will be shown separately on the order

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TreeTreasuresCanada
Community Member

Re: Fees, currency exchange rates have me confused

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@MsOpalWorld  My explanation wasn't clear.  For example, take your first item the Black Opal.., it is AUD $739.  Change your currency, at the bottom of the page to USD and you'll see that the same item is USD $520.97.  The $520.97 is .705% of $739.  Assume that your customer has offered you USD$500 and you are agreeable.  Apply the .705 rate ($500 divided by .705 which equals $709.22.)  List your item at AUD$709.22.  You can double check by multiplying your AUD $709.22 times .705 and you'll get USD $500.  Hope that helps.

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TigersandDragons
Community Member

Re: Fees, currency exchange rates have me confused

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@MsOpalWorld  Do you have a Paypal account?  I find that Etsy currency rates are pretty close to Paypal.  So I go into my Paypal account and start a currency conversion, that I don't complete, to see what it would be.

I have added USD to the currencies that I will accept in Paypal, so Paypal allows me to exchange currency.  You can do the same with your Paypal account, even if you never intend to accept USD....just so you can use the conversion tool. 

You can either do the whole amount, or just do $1, so that you can see the current Paypal rate.

But you do have to warn your customer, that you will set your price as close to their offer as you can, but since you sell in AUD, and currency exchange rates change several times a day, the price may go up or down a small amount. 

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so7el3dh
Registered Member

Re: Fees, currency exchange rates have me confused

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So what type of exchange you are expecting.

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