How do I price a print-on-demand product on Etsy to cover Gelato and Etsy fees?

Hi! The simplest way to price POD on Etsy is to treat it like a math problem: your Etsy price must cover Gelato’s product + shipping cost, Etsy’s fixed fees, Etsy’s % fees (which apply to both item price and shipping), and then leave your target profit—so you want a formula that “backs into” a price instead of guessing.

Here’s a solid, Etsy-friendly pricing method you can reuse for every size/variant:

1) Know the fee pieces (what to include)

For a typical US-based Etsy seller using Etsy Payments, you’ll usually be dealing with:

• Gelato cost: production + Gelato shipping (and any Gelato taxes/VAT charged to you, if applicable).
• Etsy listing fee: $0.20 per listing/sale (including auto-renew when an item sells).
• Etsy transaction fee: 6.5% of (item price + shipping you charge + gift wrap).
• Etsy Payments processing (US): 3% + $0.25 per order, calculated on the order total (this can include shipping and, in some cases, tax).
• Optional ads:
  • Etsy Ads = cost-per-click spend (not a % fee, but it comes out of your margin).
  • Offsite Ads (if enabled / required) = 12% or 15% on attributed orders, based on your shop’s status.

Also note:

• Charging shipping separately doesn’t avoid fees—Etsy’s % fees still apply to the shipping amount you charge.
• VAT/GST on seller fees: Etsy may add VAT/GST to Etsy fees depending on your seller location and tax setup. If you’re in the US, this usually isn’t the issue, but if you’re not, it can matter a lot.

2) Use a “backwards” pricing formula (recommended)

Define these variables:

• C = Gelato production + Gelato shipping (your real cost)
• L = Etsy listing fee ($0.20)
• P = your target profit per order (in dollars)
• S = shipping you charge the customer (put 0 if “free shipping”)
• r = combined percentage fees you must cover on (item + shipping)

For US sellers without Offsite Ads on that order, a practical r to start with is:

• r = 6.5% (transaction) + 3% (processing) = 9.5% = 0.095

Then the item price (before sales tax) can be estimated as:

Item Price = (C + L + $0.25 + P + (r × S)) / (1 − r)

Why the (r × S) term? Because if you charge shipping, Etsy still takes % fees on that shipping amount too.

Quick example (you can swap your numbers in)

Let’s say:

• Gelato total cost to you (print + Gelato shipping) C = $18.00
• You charge customer shipping S = $6.00
• You want profit P = $10.00
• Listing fee L = $0.20
• Processing flat fee $0.25
• r = 0.095

Item Price ≈ (18 + 0.20 + 0.25 + 10 + (0.095×6)) / (1−0.095)
Item Price ≈ (28.45 + 0.57) / 0.905 ≈ $32.06

So you’d list around $32 for the item + $6 shipping to net roughly your goal (round up a bit to absorb Gelato cost changes, refunds, occasional promos, etc.).

3) If you plan to use Offsite Ads, build that into pricing (or risk surprise losses)

If Offsite Ads is on (or you can’t opt out), you need a second “worst case” price check using:

• r = 0.065 + 0.03 + 0.12 (or 0.15)

That’s a huge jump. Many POD sellers either:

• price high enough that Offsite Ads orders are still profitable, or
• opt out (when eligible), or
• accept thinner margins on Offsite Ads as a “customer acquisition” cost—but only if it’s intentional and tracked.

4) Yes—fix pricing before you scale listings or turn on ads

Before you add lots of new Etsy listings or spend on Etsy Ads, get these dialed in:

• Create a price sheet per size (8x10, 11x14, 16x20, etc.) using the formula above.
• Decide your target profit per order (and a higher one if you’ll advertise).
• Run a “shipping scenario” check (US vs international shipping prices can change everything with POD).
• Order samples / verify packaging & damage rate (returns/replacements are where POD margins disappear).

If you want, paste one real example (Gelato cost + Gelato shipping for a specific size, and whether you charge shipping or offer “free shipping,” plus your target profit), and I’ll help you calculate a clean price for that exact listing and a safer “ads-on” price too.