Why the postage you charge never quite covers it
Almost every handmade seller sets their shipping charge by looking up what the carrier charges and typing that number in. It feels careful. It guarantees a loss on every order, for three reasons that stack.
The marketplace takes a cut of your postage
Etsy's transaction fee and payment processing both apply to the shipping you collect, not just the item price. Charge $7 for postage and roughly 67 cents leaves before you've bought a stamp. That fee is invisible in the sense that nobody sends you a bill for it — it comes out of the payout.
Packaging is a real cost that nobody counts
The mailer, the tape, the tissue, the filler, the thank-you card, the printed label. Individually they're pennies, which is exactly why they get waved away. Added up they routinely come to more than a dollar a parcel, and on a $7 shipping charge that's a seventh of it gone.
Carrier prices rise. Listings don't.
Postage goes up most years. Shipping charges set in a listing two years ago do not. This is the quietest of the three because nothing changes on the day it starts costing you — the listing looks the same, the orders keep coming, and the margin just thins.
The number that makes it real
A shortfall of a dollar or two per order is easy to shrug at. The same shortfall across a month of orders usually isn't, which is why this tool multiplies it out. The example above — $7 charged against $7.40 postage and $1.38 of packaging — runs $2.45 short per parcel. Across sixty orders that's $146.70 a month, money that never appears as a loss anywhere because it's buried inside payouts that still look like profit.
Charging correctly
You can't fix this by adding the fee on top, for the same reason you can't anywhere else: the fee is charged on the final figure, so raising the charge raises the fee. The shipping charge that exactly covers costs is:
shipping charge = (postage + packaging) ÷ (1 − fee rate)
And the free-shipping version is the same number, moved. If you set shipping to zero, the item price has to rise by exactly that amount — the buyer pays the same total, the marketplace takes the same fee, and you keep the same margin. The choice between them is about conversion, not cost.
Common questions
Should I just raise my shipping charge?
You can, but high shipping costs put buyers off more than a high item price does — it reads as a surcharge rather than part of what they're buying. That's why many sellers fold postage into the item and offer free shipping instead.
Both are shown above and they cost you exactly the same. Decide on which converts better for your products.
What should I include as packaging?
Everything that leaves the building with the parcel and isn't the product: outer box or mailer, tape, void fill, tissue, the thank-you card, the printed label, and any branded sticker. If you buy it in bulk, divide the pack price by the number of parcels it covers.
Does this include the fee on the item as well?
No — deliberately. This tool looks only at whether shipping pays for itself. The fees on the item price, your materials and your labour are a separate question, and the pricing calculator handles all of it together.
Are my numbers stored anywhere?
No. It all runs in your browser, there's no account, and nothing is uploaded. Close the tab and it's gone.