Your costs do not shrink

Materials, packaging and postage cost the same whether you sell at full price or half price. The discount comes entirely out of what was left over for you.

Two Etsy fees never move

The $0.20 listing fee and the $0.25 payment fixed fee are flat. On a $15 item they are a much bigger share of your revenue than on a $50 item — which is why discounts bite hardest on cheap products.

Shipping fees follow the order, not the item

Etsy takes 6.5% of the shipping you charge as well as the item price. Discounting the item does not reduce that part at all.

Volume rarely makes up the gap

If a discount halves your per-order profit, you need double the orders just to stand still. Most sales lift volume by far less than that.

How much discount can I safely offer on Etsy?

It depends entirely on your margin, not on a general rule. If a $30 item leaves you $9 after Etsy fees, materials and shipping, a 30% discount removes all of it. The calculator above shows your break-even discount — the point where a sale stops earning anything.

Why does a 20% discount cut my profit by more than 20%?

Because your costs do not shrink with the price. Materials, shipping and the fixed parts of Etsy's fees stay the same, so the entire discount comes out of your profit rather than being shared across your costs. A 20% price cut often removes 50-70% of what you actually keep.

Do Etsy fees go down when I discount an item?

Partly. The 6.5% transaction fee and 3% payment processing are percentages, so they drop with the price. But the $0.20 listing fee and $0.25 payment fixed fee stay the same no matter what you charge, which makes discounts hurt more on lower-priced items.

Is it worth running a sale if my margin drops?

Only if the extra volume covers the gap. If discounting halves what you keep per order, you need twice the orders to earn the same money. The calculator shows this multiplier so you can judge whether the sale is realistic before you run it.

Should I include Offsite Ads when calculating a discount?

If a sale is likely to be driven by Offsite Ads, yes. That fee is 12-15% of the order total and it applies on top of everything else, which can turn a modest discount into a loss. Many sellers check the numbers both ways.