Shipping on Etsy is changing in 2025, and as an Etsy seller, you need to stay ahead of these updates to keep your pricing competitive and your profits intact. With Etsy removing handling fees from calculated shipping and major carriers raising rates, it’s time to rethink how you approach shipping costs.
This guide will walk you through Etsy’s updated shipping policies, how to set up your shipping profiles, and strategies to offset costs without losing sales.
Key Takeaways
- 📦 Etsy is removing handling fees for calculated shipping in 2025. Sellers will need to get creative with their pricing.
- 💵 Changing one setting in your Etsy shipping profile can help you make a little extra profit.
- 🔎 Etsy still prioritizes listings with free shipping—offering improved search visibility and a slight edge in conversions.
Table of Contents
- Etsy’s New Shipping Policy
- How to Offset Etsy Handling Fees
- Understanding Etsy’s Shipping Profiles
- Deciding Your Shipping Strategy
- How to Set Up Your Etsy Shipping Profile
- 2025 Shipping Rates
- Should You Offer Free Shipping on Etsy?
- Final Thoughts
Etsy’s New Shipping Policy: No More Handling Fees
Starting March 3, 2025, Etsy will no longer allow handling fees for calculated shipping. If you previously added a small handling charge to cover packaging and labor, you’ll need to adjust your prices to absorb those costs.
Etsy’s reasoning? Many buyers abandon their cart when they see unexpected shipping fees. By eliminating handling charges, Etsy aims to create more predictable pricing at checkout, increasing the likelihood of converting visitors into customers.
How to Offset Handling Fees After Etsy’s Change
Since handling fees are disappearing, here’s how you can still recover those costs:
Adjust Product Prices
Instead of adding a separate handling fee, increase your item price slightly to cover packaging costs. Here’s how:
- Bake shipping costs into your item price so customers don’t see extra fees at checkout.
- Test small price increases to ensure they don’t hurt conversions while covering packaging and shipping expenses.
- Emphasize quality, uniqueness, or benefits in your listing description to justify the slightly higher price.
→ Need to raise prices to cover the cost of shipping? Use our Etsy fee calculator to double check your profit margin.
Offer Free Shipping for SEO
Etsy still prioritizes free shipping in search rankings. If possible, roll shipping costs into your product price and offer free shipping for a slight boost in search.
Use Post Office Retail Rates
Etsy allows sellers to choose between business rates and post office retail rates for shipping. By selecting post office retail rates, Etsy will charge customers what they’d pay at the post office, but you’ll pay Etsy’s lower commercial rate when purchasing a shipping label—letting you keep the difference as a small profit margin.
→ Need a tutorial on how to select post office retail rates? Check out the video from Kara Buntin below.
Understanding Etsy’s Shipping Profile Types
Etsy offers two main shipping options for sellers:
#1. Fixed Price Shipping
Great for small, lightweight items with predictable costs (e.g., jewelry, greeting cards). You set a flat shipping fee, and customers pay that rate no matter where they are.
Downside: If your item is large or varies in weight, you risk overcharging or undercharging for shipping.
#2. Calculated Shipping
Etsy automatically calculates shipping based on the customer’s location, package weight, and dimensions.
- Best for heavier or larger items
- Ensures buyers pay accurate rates
- Works with USPS, FedEx, and UPS
With calculated shipping, handling fees are no longer an option, so it’s important to set up your shipping settings correctly.
Deciding Your Etsy Shipping Strategy
Shipping costs can make or break a sale. If your prices are too high, shoppers will bounce—but if they’re too low, you’re eating into your profit margins. So, how do you strike the perfect balance?
That’s where Marmalead gives you an edge.
- What’s the lowest shipping price (besides free) that buyers see for products like yours?
- How many Etsy sellers bake shipping costs into their product price?
- What’s the average processing time for items in your niche?
- How does free shipping impact your competition—and should you offer it?
Marmalead helps you analyze real Etsy market data, so you’re not guessing what works—you’re knowing what works.
→ Want to try it for yourself? Use Marmalead to research your competitor’s shipping strategies and price smarter than the competition. Try it now!
How to Set Up Your Etsy Shipping Profile
Navigate to Settings > Shipping Settings > Shipping Profile to create or edit your profiles.
Key Shipping Settings:
- Shipping Prices: Choose Calculated Shipping or enter Fixed Prices manually.
- Origin ZIP Code: This determines where your package starts its journey.
- Processing Time: Etsy displays this to customers, so be realistic about how long it takes to ship. Faster processing times can improve conversions.
- Delivery Services: Select USPS, UPS, or FedEx, depending on the carriers you use.
- Free Shipping Option: Consider adding this to boost visibility in Etsy search.
- Item Weight & Size: Ensure you enter correct package dimensions to avoid surprise charges.
Pro Tip: Opt for services with tracking and insurance for peace of mind and customer satisfaction.
2025 Shipping Rates: What’s Changing?
Shipping costs are rising in 2025, and Etsy sellers need to be aware of these changes to stay profitable.
Domestic Shipping Rate Comparison (2025)
| Carrier | Standard Ground | Expedited | Overnight |
|---|---|---|---|
| USPS | ~$6.99 (Ground Advantage) | ~$9.50 (Priority Mail) | ~$24.90 (Priority Mail Express) |
| UPS | ~$7.08 + $3.70 residential fee | ~$8.82 (3-Day Select) | ~$13.00 (Next Day Air) |
| FedEx | ~$10.10 + $5.15 residential fee | ~$21.03 (Express Saver) | ~$33.87 (Standard Overnight) |
| Amazon Shipping | No residential or weekend surcharges | 1–2 Day options | Same/Next Day (Limited areas) |
What This Means for Etsy Sellers
- Small Packages (Under 2 lbs.) → USPS Ground Advantage is the most affordable option, especially with flat rate boxes.
- Medium Packages (5–10 lbs.) → USPS Priority Mail Flat Rate Boxes are often cheaper than UPS/FedEx, especially for coast-to-coast shipping.
- Large Packages (Over 15 lbs.) → UPS and FedEx Ground become more cost-effective, but watch out for increased oversize surcharges (+25–30% in 2025).
International Shipping: What’s New in 2025?
- USPS remains the cheapest for small international packages but increased rates by ~6%.
- FedEx, UPS, and DHL raised international rates by 5.9% on average.
- Etsy now collects 8.1% VAT on all orders shipped to Switzerland (regardless of seller location). Learn more about other value added taxes when shipping Etsy products internationally.
- Pirate Ship’s Simple Export Rate is the cheapest way to ship lightweight items internationally.
How to Save on Etsy Shipping in 2025
- Use Etsy Shipping Labels: Discounts up to 30% off retail rates for USPS, UPS, and FedEx.
- Sign up for Carrier Business Programs: FedEx & UPS offer 40–50% off standard rates for small business accounts.
- Use Third-Party Shipping Platforms: Services like Pirate Ship and ShipStation provide discounts up to 90% off FedEx and USPS.
- Consider Amazon Shipping: No residential fees and competitive flat-rate pricing for small businesses.
Should You Offer Free Shipping on Etsy?
Free shipping is a hot topic among Etsy sellers. While it can increase visibility in search results, it’s not always the best choice for every product. Here’s what you need to consider before offering free shipping in 2025.
Why Etsy Pushes Free Shipping
Etsy prioritizes listings with free shipping in search rankings, especially for buyers in the U.S. Since unexpected costs at checkout can deter buyers, Etsy encourages sellers to roll shipping fees into product prices.
- Higher Visibility: Etsy promotes listings that offer free shipping, making them more likely to appear in search results.
- Better Conversion Rates: Many shoppers expect free shipping and are more likely to complete a purchase when they see it.
- Competitive Edge: If your competitors offer free shipping, it may be necessary to keep up.
When Free Shipping Might Not Work
- High Shipping Costs: If your items are large or heavy, rolling shipping into your price might make it too expensive compared to competitors.
- International Orders: Free shipping on global sales could cut deeply into your margins. Consider offering it domestically only.
- Price Sensitivity: If your product is in a low-cost category (stickers, small handmade items), increasing the price to include shipping might turn buyers away.
How to Offer Free Shipping Without Losing Money
- Use Flat-Rate Pricing: If your shipping costs don’t vary much, add a flat amount to your product price to cover shipping.
- Test Free Shipping on Bestsellers: Try it on your top selling Etsy products first and see if it boosts conversions.
- Offer Free Shipping Over a Certain Amount: Many sellers set a $35+ free shipping threshold to encourage larger orders.
The Bottom Line
Free shipping can improve sales, but it’s not a one-size-fits-all strategy. Run the numbers, check what competitors are doing (Marmalead can help with this!), and decide if it makes sense for your shop.
Want a deeper dive into Etsy’s free shipping strategy? Check out our full guide here.
Final Thoughts: Mastering Etsy Shipping in 2025
With Etsy removing handling fees and shipping costs rising, the key to staying profitable is adjusting your pricing strategy and choosing the most cost-effective shipping options.
- Roll handling costs into product pricing
- Use post office retail rates to offset lost handling fees
- Compare shipping carriers & take advantage of discounts
- Optimize your packaging to avoid oversized fees
Shipping doesn’t have to be a profit drain—with the right strategy, you can stay competitive, keep customers happy, and maximize your earnings.
Have questions? Drop them in the comments below. And as always, happy selling!
