I've noticed that I can never purchase labels for orders going to Isle of Man. Also, the customer is overcharged for shipping - posting from the UK, they are charged for European labels, even though it actually costs as much as posting to anywhere else in the UK.
Isle of Man is a separate country in Etsy's country list, not part of the UK. Therefore it's being charged your "everywhere else" rate.
To set Isle of Man as the same as the UK, click "add a country" in your shipping settings/profile, select Isle of Man from the drop down and make it the same as the UK.
For Labels, RM consider Isle of Man under UK. So perhaps your trying to find Isle of Man as a separate country, and that would be why, because you should select UK.
I am having this problem too (24th Aug 2024). Etsy will not allow me to purchase a label from the UK for the Isle of Man. I offer free posting for all my sales, so no idea how to fix this, other than to but my postage direct from the Post Office (the traditional way). Please could Etsy look into this as it looks like it's ben going on for some years? Thanks.
Buy your postage via RM click and drop instead and add the tracking number to the order after (if you normally purchase that type of postage).
I have separate delivery options for IOM, Jersey & Guernsey (along with UK) as @CappuccinoLace says, so that they get the free (UK) shipping option.