Mastering Etsy Shipping: How Does Etsy Shipping Work in 2024?

Unless you sell digital goods on Etsy, order fulfillment logistics and shipping are an integral part of running your online business. Mastering shipping on Etsy is essential for offering your customers the best possible fulfillment options, while also ensuring you get the most bang for your shipping buck. For many sellers, shipping their Etsy orders with Etsy Shipping is a smart and cost-effective way to fulfill orders on the platform. To make the most out of Etsy Shipping, however, you need to understand how it works, how it stacks against your seller fulfillment options, and how you can integrate it into your order fulfillment process in the most beneficial way, for you and for your customers. This guide will take a look at order fulfillment on Etsy, the shipping policies and handling times on the platform, and help you understand the ins and outs of Etsy's in-house logistics services known as Etsy Shipping in order to help you make the best decisions for your ecommerce business when it comes to your Etsy order fulfillment.

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How does Etsy Shipping Work?

Your order fulfillment practices and policies are one of the most important aspects of your Etsy business, regardless of what you're selling. They affect your listings' ranking in search results, has a significant impact on your conversion rate, and have a direct impact on your bottom line. To help its sellers offer better fulfillment options to their buyers, Etsy enables its sellers to purchase shipping labels directly through Etsy at discounted prices. Here, we'll take a look at Etsy Shipping and compare it to seller fulfillment, help you understand how shipping costs work on Etsy, take a look at shipping insurance, and explain how to track and keep tabs on your Etsy shipments.

Self-Fulfillment vs. Etsy Shipping Labels

Unlike marketplaces such as Poshmark or Depop, Etsy gives its sellers the option of fulfilling orders themselves with shipping labels of their choice. This is known as self-fulfillment or seller-fulfillment, and simply means that you arrange your own shipping for your Etsy orders. You'll be required to confirm on-time shipment (preferably with a valid tracking number), ensure that you ship within the handling time specified in your shipping policies (and within 30 days after the buyer placed their order). Sellers may choose to fulfill orders themselves if they ship items that are too large or heavy to ship with Etsy Shipping labels, they operate from a country that doesn't have Etsy Shipping available, prefer to ship independently of Etsy, or if they do not accept payments via Etsy Payments, thereby making them ineligible to purchase labels via Etsy Shipping.

Sellers who want to purchase labels through Etsy via Etsy Shipping must meet several criteria: they must be based in the US, UK, Canada, Australia, or India, and must accept payment for their items through Etsy Payments. In these countries, sellers can purchase labels from renowned couriers and postal services including FedEx, USPS, Royal Mail, Evri, and Yakit, among others. Aside from the discounted rates – up to 30% for some services – there are additional perks for using Etsy Shipping; when you purchase a label through Etsy, the shipping metrics for the order shipped with that label will have a positive impact on your Star Seller status metrics (assuming you shipped the order out on time), and help you earn the "Smooth Shipping" customer service badge.  

Understanding Shipping Costs

Before you decide how much to charge for shipping on Etsy – or whether you want to charge for shipping at all – there are several factors that determine what your shipping costs and prices will look like, and it's important to understand them in order to understand your shipping costs. The major factors that affect your shipping costs are where the majority of your customers are, what's the most appropriate shipping method for the items you'll be selling, and what kind of shipping options and prices your competitors offer.

These factors will have a direct effect on your shipping costs and on your Etsy shipping strategy as a whole. Knowing them ahead of time will help you create the best shipping strategy for your Etsy shop, one that both makes sense for your bottom line and keeps your listings competitive and ranking highly in buyer searches.

Shipping Insurance on Etsy

Sellers who ship their orders with Etsy Shipping labels have the option of purchasing shipping insurance along with their label to insure against possible damage in transit or misdelivery. You won't necessarily be covered by shipping insurance when you buy an Etsy label, and in certain cases you'll be required to purchase insurance in addition to your Etsy Shipping label in order insure your parcel while it's in transit.

If you opt to ship on your own (self/seller fulfillment), you'll need to purchase shipping insurance from your courier of choice to cover damaged or lost items. Some couriers have insurance built-in, while some will require you to purchase shipping insurance at an additional cost.

Regardless of whether or not you purchase shipping insurance, you may also be covered by Etsy's Purchase Protection Program for Sellers for up to $250. Note that this coverage applies to items lost in transit, and very rarely applies to damaged items who've reached their destination. To ensure that you're eligible, your order must fulfill the following requirements:

• Shipped either with an Etsy Shipping label, or with another service that has a valid tracking number. You must upload the tracking information to the order on Etsy.
• Paid for by the buyer through Etsy Payments. If you don't have access to Etsy Payments in your country and use PayPal to accept payments, you may be covered by PayPal.
• Shipped to the address provided by the buyer when they placed the order on Etsy.
• Appropriately packaged to ensure safe transit.

You must also ensure that you have filled out your Etsy Shop's policies, have provided an estimated delivery date in your listing and shipped the item within the estimated delivery date you provided, and your Etsy account is in good standing.

Tracking Your Shipments

Tracking your shipments is a good way to monitor their progress and pre-empt possible shipping delays and problems. Regularly tracking your outbound shipments will help you spot customs delays, missed delivery attempts, and problems with delivery information. You can track your shipments in bulk on most courier websites, and can oftentimes sign up to receive delivery updates directly to your email. If there's a problem with the shipment, you'll know about it before it becomes the customer's problem, and can proactively solve it for them. This has two major benefits – it shows you provide great customer service, and also helps you ensure that all your shipments arrive within their estimated delivery timeframe.

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What do Customers Expect from Your Shipping Policy?

Now that you have the basics of understanding how Etsy Shipping works, it's time to take a look at what your customers will expect in terms of your Etsy shipping policies. In this section, we'll take a look at various shipping related issues, including how to determine and set up your shipping costs, how to establish a realistic delivery timeframe, whether or not you should offer free shipping, item packaging and presentation, and help you decide whether international shipping can be beneficial for your Etsy shop.

Setting Shipping Costs

Before setting up your shipping costs, it's important to determine a ballpark range of what they'll look like when you start selling. Having a rough number will enable you to determine a lot of things – where you'll ship to, and how much you'll have to factor in for shipping when pricing your items, for example. Etsy actually provides its sellers with a free tool to estimate how much shipping will cost for certain deliveries. You can input packaging dimensions and/or weight in to Etsy's postage rates calculator to see the Etsy Shipping rates for a given shipment.

When you're ready to set up shipping costs on your listings, it's time to set up shipping profiles, which are essentially custom shipping templates you can apply to your Etsy listings. We'll discuss shipping profiles in greater depth below, but know that you can always create or adjust your Etsy shipping profiles through the Shipping Profiles section under Shipping Settings in Shop Manager.  

Establishing Your Delivery Timeframe

Your delivery timeframe is given to your customers as an estimated delivery date, which they can view on your listing prior to placing an order. It's calculated by Etsy as your processing time plus your shipping speed (per the shipping service used), both of which you'll define in your shipping profile. When setting these up, make sure that you input a realistic processing time that you can consistently meet, as shipping orders late is not just detrimental to your seller metrics, but also results in a poor buyer experience.  

Offering Free Shipping

Like on many online marketplaces, free shipping is important to buyers on Etsy. For many, attractive free shipping offers are a make or break when it comes to making a purchase. For sellers, however, the prospect of free shipping can be off-putting, but it doesn't have to take a bite out of your profits. If you offer free shipping, you can always recoup your shipping expenses in your item price. Furthermore, you don't necessarily need to offer free shipping across the board; free domestic shipping can do wonders for boosting your sales, and if you recoup the shipping costs (in whole or in part) in your item price or gift-wrapping price, you can still maintain your profit margins.

Pro Tip: You can add automatic pricing adjustments to all your Etsy listings with ExportYourStore! Simply create your own custom pricing rules for your Etsy sales channel, and update all your Etsy listings with your new adjusted pricing.

Furthermore, Etsy recently introduced the "Free Shipping Guarantee" program, which enables sellers to enroll their listings in order to receive priority placement in buyer searches. To meet the criteria for promotion, you'll need to guarantee free US shipping for orders totaling $35 or more. This program ups the benefit of free shipping significantly for sellers, and is a good way to dip your toe into free shipping.

Providing International Shipping

Like choosing to provide free shipping, offering international shipping on your listings is a choice that will need to be made based on factors specific to your Etsy shop. International shipping certainly is not the default on Etsy, and should not be offered by all sellers for all items, for that matter. When determining whether you should offer international shipping, consider where your customer base is located, and whether it would be beneficial to your sales goals to open shipping internationally.

Remember that international shipping is not just more expensive, but also oftentimes far more involved than domestic shipping. You'll inevitably find yourself dealing with customs delays, buyers who are dissatisfied with having to wait for their shipments to cross borders or refuse to pay customs clearance fees, costly returns, and even language barriers when communicating with your buyers. Weigh these against the potential benefits of selling internationally and determine whether or not international shipping is right for you.

You'll be able to create multiple shipping profiles with different shipping destinations, and apply them to listings at your discretion to determine which items ship internationally, and which don't. Plus, you can always go back and make adjustments to your shipping profiles if you feel that certain destinations prove to be more trouble than they're worth to ship to.

Handling Returns & Refunds

While sellers on Etsy are not required to accept buyer returns, many buyers still expect sellers to accept returns. Whether justified or not, some buyers will even attempt to strongarm sellers into accepting a return or issuing a refund by using Etsy's case system. That said, if you're able to accept returns, we recommend you do so as it provides a better sense of trust between seller and buyer, and from our experience expresses to buyers that you stand behind the items you sell.

If you do choose to accept returns, process them quickly and refund your buyers on time. If you're a US seller processing a return from a buyer in the US, you'll be able to purchase a return shipping label from Etsy Shipping if you want a more cost-effective and safe way to ensure your item gets back to you.

Packaging & Presentation

Your item's packaging has two purposes: to protect the item in transit so it arrives safely with the buyer, and to give your buyer a unique and enjoyable unboxing experience. The benefits of the former are obvious – you want the item to arrive with your buyer in the condition you sent it. Depending on what exactly you're shipping, safely packaging your item can mean different things; giclée prints are best packed in a shipping tube, while vintage glassware would fare better in a sturdy box surrounded by an ample amount of cushioning. If you're shipping yourself, remember to take into account your packing materials when working out your shipping expenses!

The importance of presentation, on the other hand, are not discussed nearly enough. All sellers know that getting an item to their buyer in one piece is top priority, but in our experience, a good unboxing experience scores you a significant number of brownie points in the eyes of your buyer. Good presentation can mean many things – it can be a jewelry box wrapped in tissue paper with an enclosed store discount code printed on a card, packaging that echoes your Etsy shop's color palette, a commitment to biodegradable packing materials, or some combination of all of these. Take the time to consider what's important to your buyers, what values you want your brand to represent, and what type of unboxing experience you would want if you were in your buyer's position, then build your presentation strategy from there.  

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How to Set Up Your Etsy Shipping

Now that we've gone how shipping works on Etsy, how to gauge how much Etsy shipping will cost, and what your buyers will expect from your Etsy shipping policies, it's time to go over the how you can apply these in practice. In this section, we'll discuss shipping carriers and how to choose them, go over how to set up shipping profiles on your Etsy account, understand how to purchase and print Etsy shipping labels, how to set up international shipping, and how to determine your shipping costs and delivery timeframes.

Shipping Carriers

When you use Etsy Shipping, your choice of shipping carriers will be limited to the carriers that Etsy works with. Carriers include DHL, FedEx, and UPS, and postal services include USPS and Canada Post. For a full list of available carriers, take a look at Etsy's shipping policies, or for specific shipping options available for a particular shipment, consult with the Etsy shipping calculator. An order will automatically mark as shipped when you purchase a shipping label for it through Etsy, so all you need to do is drop it off with the relevant carrier.

If you're not using Etsy Shipping to fulfil your orders, you'll be able to choose from a larger number of carriers. But while you have free reign in choosing your carrier, there are still some guidelines you'll need to adhere to. For starters, you'll need to have proof of shipment to the buyer's address, in case the item doesn’t arrive and you need to prove to Etsy that it has indeed been shipped. If you can, always ship with a tracking number, as this is one of the requirements to qualify for Etsy's Purchase Protection Program. Secondly, you will need to confirm shipment (and preferably a tracking number) as soon as you've sent the order; never confirm shipment before you've actually shipped your order. Finally, make sure you're dropping off the order with your carrier within your stated processing time, and avoid late shipments bringing down your seller metrics.

Shipping Profiles

Shipping profiles are simply custom logistics templates you can apply to your Etsy listings. A shipping template will have shipping and handling specifics like processing and shipping timeframes, available carriers and shipping services, and available shipping destinations. You'll be able to create as many shipping profiles as you need within your Etsy account, and save them for future use. The next time you list a new item, you'll simply associate it with the shipping profile you want, instead of filling out all the shipping and handling details for the item manually.

Shipping Labels

Whether you purchase your shipping label from Etsy or opt to purchase it directly from a carrier, you'll be able to print it out at home and attach it to your package. If you're just starting out with your online selling journey, we don't recommend purchasing a label printer right away. In our experience, label pouches do a much better job at protecting your shipping label, and are much cheaper to buy than a fancy label printer.

Ensure that you include your buyer's complete shipping address, and that your labels are printed in a sufficiently high resolution so that the barcode can be scanned. Improperly printed labels and labels with missing information can result in the shipment returning to you, or even going missing in transit and never making it to your buyer.

International Shipping

We discussed how to determine whether or not you should offer international shipping above. Here, we'll take a look at the practicalities of actually shipping items internationally, and what special considerations you'll have to take into account when sending items across international borders.

The first and most obvious hurdle is customs clearance. Depending on what you're selling, the value of the items you ship, and the destination country, customs clearance may be simple and quick or a drawn-out process from which your shipment may never escape. Regardless of where or what you're shipping, however, you'll have to declare what the item is and include an itemized shipping invoice with the item's costs, shipping costs, and insurance costs. Every country charges different customs rates for different commodities, and many countries have trade agreements that mean that shipments coming from certain countries are exempt or have different taxation rates than others (such as NAFTA, for example).

Another important consideration, especially if you're selling items made with leather or other animal products (i.e. antlers or bone), that your materials are CITES compliant. You must of course ensure that you're not using any prohibited materials in creating your products, but also be sure to clearly label them as such. CITES violations are serious, and will not only result in your item being confiscated, but can also lead to legal action against you.  

Shipping Costs & Delivery Timeframes

Your shipping costs and delivery timeframes will depend on the type of shipping service you choose, and the handling times you define. Delivery timeframes are calculated by Etsy as your handling time plus your shipping speed.

First, your shipping costs can be estimated either through the Etsy Shipping calculator, or through the carrier of your choice. Whether you choose to charge for shipping or offer free shipping and recoup costs is up to you. If you choose to offer free shipping and increase your item's listing price, you can easily create an automatic export rules to adjust your item prices on Etsy with ExportYourStore.

Secondly, delivery timeframes depend on the shipping service you choose (e.g. next-day delivery vs. 1-3 business days). Simply ensure that you fill these out accurately in your shipping profiles, and Etsy will be able to calculate an accurate delivery timeframe for your buyers.

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Tips for Optimizing Your Etsy Shipping

Your Etsy shipping strategy should change and adapt as you gain more experience selling and shipping on Etsy, and as the shipping needs and expectations of your customers change. Here, we'll discuss several tips and ideas to help you optimize your Etsy shipping strategy to better suit your business and help you perform better on the Etsy marketplace as a whole. These optimization strategies are the result of years of hands-on selling experience; while they may not all may be right for your Etsy shop, they'll point you in the right direction for optimizing your Etsy shipping strategy to help you sell more and ship smarter.

Use Flat Rate Shipping

If you sell items in a consistent size, flat rate shipping is a great choice for fulfilling your orders. Flat rate shipping enables you to choose a box based on size and pay a flat shipping rate for it. As long as your parcel remains under a certain weight, it can be shipped at the flat rate fee. Every major carrier will have their own flat rate shipping tiers, and while most are quite similar, you can find the best option by shopping around for the one that suits your needs.

Using flat rate shipping will help you more easily predict the biggest variable of your fulfillment costs – postage – and enable you to price your items (if you recoup shipping costs through your item price) or shipping (if you charge for shipping) more easily.

Offer Free Shipping

We've touched on the benefits of offering free shipping above, but it's worth mentioning again. In our experience, free shipping is by far the biggest change you can make to your Etsy shipping strategy to simultaneously drive visibility, engagement, and conversion. You'll be able to recoup shipping costs in your item's price, which will be much easier if you use flat rate shipping. Plus, you can easily make channel-wide pricing adjustments with ExportYourStore with a click, and even automate these adjustments in the future, so you can adjust your item price on Etsy to make up for the free shipping you offer your customers.

Bundle Items Together for Lower Shipping Costs

If you're not offering free shipping, bundled or combined shipping is a good way to entice buyers to purchase more than one item, and is a customer service oriented gesture that is likely to result in return buyers in the future. On Etsy, due to how poorly combined shipping is handled by the platform, shipping costs can quickly add up for buyers and oftentimes result in cart abandonment and missed sales. Depending on whether you use Etsy Calculated Shipping or set prices yourself, you'll have to set up combined shipping on your Etsy shop a bit differently.

Setting Up Combined Shipping with Etsy Calculated Shipping

If you use Etsy Calculated Shipping, you'll have to set up packaging that has a volume that is a multiple of your packaging for a single item. You'll do this through your shipping settings in shop manage, under package preferences. Here, you can see that we've created a 5" x 5" x 5" package for one item and charged a $10 shipping fee, and added another package for two items at a size of 10" x 5" x 5" also priced at $10.

With these packaging presets set, Etsy Calculated Shipping will default to the "Two Item" preset packaging when a buyer adds two items with the "One Item" packaging preset to their cart. Without this "Two Items" preset, Etsy would have added the "One Item" packaging twice, and charged the buyer twice for shipping.

Setting Up Combined Shipping with Custom Shipping

If you set shipping prices manually, you'll need to set up combined shipping on Etsy through your shipping profiles. To do this, you'll begin by going to your Etsy Shop Manager, clicking on "Settings" in the left-hand navigation pane, then going to "Shipping Settings." From there, make sure you're on the "Shipping Profiles" tab, and click on "Create Profile."

In the first drop-down menu, "Shipping prices," select "I'll enter fixed prices manually." Now, you'll be able to define your standard shipping services and prices for this profile, add optional shipping upgrades, and determine how much you'll charge your buyers to ship each additional item in their order.

In our example above, you can see that we've priced domestic shipping at $10, with no charge for an additional item, meaning we have free bundled shipping. For international shipments, this shipping profile defines a cost of $20, with no charge for an additional item, resulting in combined international shipping.

Utilize Bulk Shipping Discounts

Instead of offering free combined shipping, you can create bulk discount shipping, where your customers pay a discounted shipping rate for additional items. You can do this much in the same way as setting up free shipping, but instead of pricing additional shipping at $0, you can set a discounted price instead.

If you use Etsy Calculated Shipping, you'll need to define packaging options that are multiples of one item's package, and price them on an incremental pricing scale. For example, if we priced the package preset "One Item" at $10, as we did above, the price for the package preset "Two Items" would be $15.

If you choose to set up flat rate shipping prices using shipping profiles, simply add a shipping price for additional items. In our example, we set the domestic shipping price at $10; to create a bulk shipping discount, we can input a price of $5 into the "Additional Item" field.  

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Final Thoughts & Key Takeaways: Etsy Shipping

A successful Etsy shipping strategy is based on a solid understanding of how Etsy shipping works, plus an understanding of what Etsy shoppers have come to expect from their sellers in terms of order fulfillment. Creating an optimized Etsy shipping strategy can do more than just ensure smooth order fulfillment; it can boost your ranking in buyer searches, improve your seller ranking, earn you Star Seller status and customer service badges, and improve your conversion rate.

But it's important to remember that no shipping strategy is ever truly perfect – it must continuously be optimized to meet the expectations of your buyers, to keep up with the competition, and to ensure the best shipping prices for you and your customers.