You advertise on Etsy from the Marketing > Etsy Ads section of Shop Manager: you enter a daily budget (at least 1 USD), choose the listings to advertise and pay only when your ad is clicked. In addition, there are Offsite Ads, where Etsy promotes your products on external channels such as Google and social media; here you pay a 15% or 12% fee not for the click but for the sale that comes from the ad. The two are charged on different logic; if they are set up wrongly, sales can come in while profit disappears.
Etsy ad types: Etsy Ads and Offsite Ads
| Etsy Ads | Offsite Ads | |
|---|---|---|
| Where are they shown? | Etsy search results and other places within Etsy | Sites outside Etsy, search engines and social media |
| When do you pay? | When the ad is clicked (per click) | When the buyer who clicked the ad purchases within 30 days |
| How much? | Determined by auction; never exceeds your daily budget | 15% of the order (12% for high-revenue shops), at most 100 USD per order |
| Can you turn them off? | Yes, at any time | Yes if you are under 10,000 USD in the last 365 days; mandatory above that |
How to set up Etsy Ads, step by step
- In Shop Manager, open the Marketing menu and select Etsy Ads.
- Start with Get started and enter your daily budget. The minimum daily budget is 1 USD; you can change the budget at any time.
- In Manage advertised listings, choose which listings will be advertised. You can turn listings on and off one by one or in bulk.
- If you like, group listings into ad groups; for example, track your holiday products in a separate group.
- To stop advertising, you can pause your ads from the same screen.
Newly opened shops cannot start an Etsy Ads campaign until 15 days have passed since the shop was opened.
How are Etsy Ads charged?
- You pay per click: Showing your ad is free; you are charged only for a click.
- The auction sets the price: Ad placements are sold through a second-price auction. Etsy itself sets the bid for each listing based on the likelihood of that click turning into a sale and on the product price. That is why the cost per click varies from listing to listing and from day to day.
- The daily budget is a ceiling: Once the budget for the day is spent, your ads are not shown until the next day; you are never charged more than your budget.
How do Offsite Ads work?
- Etsy advertises your products on external channels it chooses; you do not choose the placement or the budget.
- If a buyer clicks this ad and purchases from your shop within 30 days, the order is attributed to the ad. A single click can be attributed to more than one order within that period.
- The fee is 15% for shops with less than 10,000 USD in sales in the last 365 days, and 12% for shops with 10,000 USD or more.
- The Offsite Ads fee charged on an order never exceeds 100 USD.
- Offsite Ads are mandatory for shops above the 10,000 USD threshold; shops below it can turn them off if they wish.
Because margins on POD products are thin, a 15% fee hits profit hard. Set your prices accordingly: print on demand pricing. To see all Etsy fees together, read Etsy fees and profit calculation.
Which products should you advertise?
- Products that already earn favourites/clicks organically: ads grow a product that already gets attention; they do not rescue one that doesn't.
- Products with a strong first image: the image decides the click-through rate of an ad. See professional mockups.
- Products whose margin can carry the ad cost: on low-priced products, the cost per click eats profit quickly.
- Products with the right title and tags: Etsy ads are also matched to search queries; a weak title and weak tags stay weak in ads too. See how to do Etsy SEO.
Are ads profitable? ROAS and break-even
ROAS = Sales from ads ÷ Ad spend.
Calculate your break-even ROAS from your own margin. Example: if a 30 USD product leaves you 9 USD after production, shipping and Etsy fees, your margin is 30%. Break-even ROAS = 1 ÷ 0.30 ≈ 3.3. In other words, if every 1 USD you spend on ads does not bring in at least 3.3 USD in sales, you are losing money.
Compare the ROAS shown in Etsy's ads dashboard with this number and remove the products that fall below it. The dashboard shows clicks, spend and sales from ads per listing.
A practical plan to start
- Start with a small daily budget for the first 2–3 weeks.
- Advertise your best 5–10 products, not all of them.
- Check clicks, sales and ROAS weekly; turn off the ones below break-even.
- Fix listing quality before advertising: title, tags, description. See Etsy shop optimization.
- Competition rises in Q4, so the cost per click can rise too; review your budget at the start of the season. See Etsy Q4 sales calendar.
Common advertising mistakes
- Advertising the whole shop: the budget is spread over listings that never convert.
- Looking only at the number of sales: even if ads bring sales, every sale is a loss when you are below break-even ROAS.
- Not including Offsite Ads in the price: a 15% fee can take most of the profit on a product that was not priced for it.
- Deciding too quickly: a few days of data with few clicks is misleading; decide on several weeks of data.
Frequently asked questions
What is the minimum budget for Etsy ads?
The minimum daily budget for Etsy Ads is 1 USD. You can change the budget or pause your ads at any time; you are never charged more than your daily budget.
Should a new shop advertise?
Etsy Ads can be used 15 days after the shop is opened. In a shop with no sales and no reviews, clicks convert to sales less easily; aim for listing quality and first sales first: your first sale on Etsy.
How much is the Offsite Ads fee?
For shops with less than 10,000 USD in sales in the last 365 days, it is 15% of the order attributed to the ad; for 10,000 USD or more, it is 12%. The fee never exceeds 100 USD on a single order.
Should I turn off Offsite Ads?
If you are under 10,000 USD in the last 365 days, you can turn them off; if your margin cannot carry 15%, turning them off makes sense. If your margin can carry the fee, you can keep them on as an extra sales channel.