Running an Etsy Sale? Calculate Your Real Profit First

Running a store-wide or category sale on Etsy can boost traffic and clear inventory — but if you don't know your numbers, you might be celebrating a sale while actually losing money. Discounts don't just cut your revenue; they stack on top of Etsy's fixed and percentage-based fees. Here's how to calculate your real profit before you run a sale, and which products can handle a discount.

How Discounts Compound With Etsy Fees

Etsy's fees are mostly a percentage of the order total (transaction fee 6.5%, payment processing ~3%+, etc.). When you run a 20% off sale:

• Your revenue drops by 20%.
• Your Etsy fees also drop (they're a % of that lower total).
• But your costs (materials, labor, shipping) stay the same.

So your profit doesn't drop by exactly 20% — it drops by more, because costs are fixed. On a thin-margin item, a 20% discount can turn a small profit into a loss.

Example: 20% Off a $25 Item

Assume: $25 item, $4 shipping to buyer, US seller, costs (materials + labor + your shipping) = $12.

Before sale:

• Revenue: $29
• Etsy fees (approx): ~$2.80
• Costs: $12
• Profit: ~$14.20

After 20% off item only (sale price $20, shipping still $4):

• Revenue: $24
• Etsy fees (approx): ~$2.35
• Costs: $12 (unchanged)
• Profit: ~$9.65

So a 20% discount on the item wiped about $4.55 from your profit per sale — a 32% drop in profit, not 20%. On high-volume, low-margin items, that can mean losing money if your margin was already slim.

Which Products Can Handle a Sale?

Products that can usually handle a discount:

• High-margin items — plenty of room before you hit zero profit.
• Slow movers you're okay discounting to clear.
• Loss leaders you consciously use to bring people into the shop (use sparingly and knowingly).

Products to avoid putting on sale (or discount only lightly):

• Low-margin or break-even items — a 20% sale could push them negative.
• Heavy or expensive-to-ship items where costs are a big share of revenue.
• Already discounted or seasonal items where you've got no margin left.

The only way to know for sure is to run the numbers per product: revenue after discount, minus Etsy fees and your costs. That's exactly what a sale simulator does.

Strategy: Price So You Can Sale

Some sellers intentionally price so that a 15–20% sale still leaves a small profit. That means building in margin up front. Others prefer to run smaller sales (5–10% off) on everything so they never go negative. Either way, the key is calculating before you promote.

Use the Sale Simulator

Use our free Etsy fee calculator to see your current profit for any product. Then upgrade to Pro to use the Sale Simulator: enter a discount (e.g. 20%) and see before/after profit for each product, so you know exactly which items can handle a sale and which can't — before you run the promotion.