As an Etsy seller, having the right currency settings for your shop is crucial for maximizing sales and avoiding unnecessary fees. In this comprehensive guide, I will walk you through everything you need to know about updating your Etsy shop’s currency, based on my years of experience selling handmade products on Etsy.
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Why Currency Settings Matter
Etsy is a global marketplace, with buyers and sellers from countries all around the world. As such, transactions may take place in many different currencies.
Having the right currency configured for your Etsy shop ensures that:
- Buyers see prices in their preferred currency
- You avoid paying unnecessary currency conversion fees
- You don’t lose money due to fluctuating exchange rates
How to Change Your Etsy Shop Currency
Changing your Etsy shop currency is simple, and can be done right from your Shop Manager. Here are the step-by-step instructions:
On Etsy.com
- Go to Your Account
- Click on Account Settings
- Select the Preferences tab
- Under Currency, choose your preferred currency from the dropdown menu
- Click Update Preferences at the bottom to save changes
On the Etsy Mobile App
- Open the Etsy app and tap on You
- Go to Settings
- Tap on Currency
- Choose your preferred currency from the list
- The app will automatically update with the new currency
Things to Consider When Choosing a Currency
When selecting a currency for your Etsy shop, here are some important things to keep in mind:
Match Shop Currency to Payment Account Currency
To avoid paying unnecessary currency conversion fees, your Etsy shop currency should match the currency of your Etsy payment account.
For example, if your bank account is in Canadian dollars, set your shop currency to CAD as well. This way, Etsy does not have to convert currencies for each transaction.
Consider Your Target Audience
Think about what countries most of your customers are from, and choose a currency that matches. Although buyers can switch currencies on their end, having their native currency configured by default increases convenience.
For instance, if you sell mainly to US-based buyers, having your shop set to USD makes sense.
Know the Implications of Conversion Fees
If you sell using a different currency than your Etsy payment account, a 2.5% currency conversion fee applies on each transaction. This fee gets deducted from your earnings.
To avoid losing money through such fees, keep your shop currency and payment currency the same.
How Currency Conversion Works on Etsy
Whenever a transaction takes place between currencies on Etsy, a currency conversion occurs. Here is an overview of how this works:
For Buyers
Etsy will automatically convert product prices to the buyer’s preferred currency during checkout. The currency can be changed under the buyer’s account settings.
Etsy uses daily exchange rates for currency conversion. A 2.5% foreign transaction fee is applied if converting from the shop’s set currency to the buyer’s currency.
For Sellers
If a buyer purchases an item using a different currency than your shop currency, Etsy will convert the order total to your shop currency minus a 2.5% conversion fee.
So if you’re a Canadian seller with CAD shop currency, and a US buyer purchases a $100 USD listing, you would receive roughly $96 CAD after the 2.5% deduction.
Tips for Handling Multiple Currencies
When selling globally on Etsy, you’ll inevitably deal with transactions in different currencies. Here are some tips:
- Avoid setting prices manually per currency. Instead, let Etsy convert based on daily exchange rates. Manually adjusting for currencies is time-consuming.
- Set shop currency to the currency matching your buyer demographic. This way, most transactions will be in your shop currency.
- Account for conversion fees when pricing items. Add an extra 2-3% cushion to cover potential losses from currency conversions.
Common Questions Around Etsy Currencies
Why does Etsy charge a 2.5% currency conversion fee?
This fee covers the cost of converting between currencies on each transaction. It allows Etsy to handle all currency conversions globally on purchases.
How often do Etsy currency conversion rates update?
Etsy currency rates are updated daily based on foreign exchange markets. These daily rates are used to convert order totals between buyer and seller currencies.
Can I choose which currency my Etsy deposits are issued in?
No, Etsy deposits into your connected payment account will always be in the currency matching that account. As a Canadian seller, for example, all deposits from Etsy would be in Canadian dollars (CAD).
Key Takeaways
- Set your Etsy shop currency to match your payment account currency
- Choose a currency fitting your target buyers
- Understand currency conversion fees
- Let Etsy handle conversions automatically
- Price items to cushion potential conversion losses
Configuring the appropriate currency in your Etsy shop settings ensures a smooth selling experience globally. With buyers and sellers from so many countries, transactions in multiple currencies will be the norm. By following these best practices around currencies, you can focus on selling great products rather than worrying about complex exchange rates.
