Help! I don’t know if I should list my items in CAD or USD?
I hear this question a lot, so let’s work through the facts and my two cents to try and clear this up for you! The short answer, if you want to save yourself some reading is that you should list in Canadian Dollars on Etsy if you are a Canadian.
In this post I’ll put to rest your concerns about listing in Canadian dollars such as:
Won’t my US customers see my listing price as some random number (not ending in an aesthetic .99 or .00 or .50 price)?
Yes, but Etsy is a global specialty market, so a lot of prices are displayed in converted amounts resulting in odd numbers. You’re not going to stick out as more or less attractive to buyers because your prices end with odd numbers.
What about the exchange rate? I don’t want my prices to fluctuate for US customers based on exchange rates.
The CA/US dollar exchange rate has been pretty stable at CA$1.37 = US$1.00 for the last three years and the average volatility from day to day has been less than 1% over the last 12 months1. You would be more concerned to know your earnings in Canadian dollars will fluctuate if you choose to list in US dollars.
My print-on-demand provider charges me in USD, so it’s easier to use their built in profit margin tools to list in USD.
You can use the built in tools to determine how much you’d like to sell items for in USD then convert that number into Canadian dollars at the highest historical rate for the past 12 months just to be safe, however I prefer to convert my costs into Canadian dollars and then calculate my profit and pricing in Canadian dollars. Its a lot easier if you think in Canadian dollar amounts.
While these are all valid concerns, it’s important to be customer-centric when making business decisions, it’s important to understand that Etsy charges a currency conversion fee2 to any seller who lists their products in a currency that is different from their bank account’s currency.
Etsy’s 2.5% Conversion Fee for Sellers
Let’s explore how this works with a real example, we’ll assume:
- You’re a Canadian with a Canadian bank account
- You want to sell a product on Etsy for $22.99 USD (approximately CA$31.55)
- You decide to change your store currency to USD so your item is always $22.99 USD (the CAD price will vary based on the daily exchange rate)
Let’s compare side by side selling on Etsy in CAD vs USD as a Canadian:
The difference is CA$0.85, which isn’t a lot, but if you were to make a hundred sales of your $22.99 USD item, you end up losing CA$85.00 in profit to Etsy fees.
You could always increase your prices by a dollar to make up for this loss, but at the end of the day, you are leaving money on the table because you will always pay less in Etsy fees when you list in Canadian dollars.
My Rationale for Listing in Canadian Dollars
Aside from lowering my operating costs by eliminating Etsy’s 2.5% currency conversion fee, listing in Canadian dollar over American dollars ensures my profit margins stay the same regardless of fluctuations in the CAD/USD exchange rate.
For me, it makes sense to think in Canadian dollars. I spend my day-to-day life thinking in Canadian dollars, I file my taxes in Canadian dollars, and I receive deposits from Etsy in Canadian dollars, so it makes sense that I list my items in Canadian dollars.
Even if a competitor doesn’t ship to Canada, I can still view their Etsy store in Canadian dollars, so there’s zero need to overcomplicate things by listing in any currency other than Canadian dollars.
Since my supplier costs are in Canadian dollars (Printify and Printful now offer Canadian dollar billing), I no longer concern myself with any currency other than Canadian dollars, even if most of my sales are to US customers. If you are using a supplier that bills in a currency other than Canadian dollars, convert their pricing into Canadian dollars at the highest possible exchange rate or use my Ultimate Profit Calculator for Canadians to make sure your Canadian listing prices are appropriate for your expenses.
P.S. Undercutting your competition by a dollar or having “normal looking” prices isn’t going to change whether a customer favourites your item, adds it to their cart or checks out from your store.
Frequently Asked Questions
When does Etsy charge currency conversion fees?
Etsy’s currency conversion fee is only charged if you list items in a currency that is not the same as your bank’s domestic currency.
What does Etsy charge currency conversion fees on?
Etsy’s currency conversion fee is charged on the total order which may include shipping. If Etsy has charged the customer tax, the currency conversion is charged on the pre-tax subtotal. Etsy does not charge the 2.5% currency conversion fee when they convert Etsy fees to your bank’s domestic currency
What currency will Etsy use to calculate transaction and payment processing fees?
Etsy will use the listing currency to calculate transaction and processing fees. If your listing currency is different from your bank’s domestic currency, it will be converted based on Etsy’s conversion rates (without incurring currency conversion fees)
Where does Etsy get its conversion rates?
Etsy does not disclose what their conversion rates are or where they get them. You can try to determine this by looking at your transactions history such as the fake examples used above (we used a 1.37 CAD to USD rate).
Does Etsy charge a currency conversion fee on seller fees?
No, any fees charged on for the sale of an item listed in a foreign currency are converted to CAD with no additional fees
Does Etsy calculate seller fees before or after currency conversion?
Before. Seller fees are based on the actual amount the customer paid (before currency conversion)3 They are then converted to CAD (no currency conversion fee here) and added to your balance
I have a USD bank account, will I be charged currency conversion fees?
Regardless of the currency of the connected bank account, Etsy will only deposit funds into your account in the domestic currency used by your bank. So if you bank with a Canadian institution, Etsy will convert your payment into Canadian dollars before depositing it.
Can I opt out of currency conversion and let my bank handle it?
No, Etsy will only deposit funds into your account according to your bank’s domestic currency. Etsy will convert any foreign currencies into Canadian dollars. You are only charged a fee on that conversion if you list items for sale in a currency other than Canadian dollars. International customers will still see prices in their home currency according to Etsy’s exchange rates
Have you made your decision? Let us know which currency you chose for your Etsy store and why in the comments!
- https://marketmilk.babypips.com/symbols/USDCAD/volatility ↩︎
- https://www.etsy.com/legal/fees/ ↩︎
- https://help.etsy.com/hc/en-us/articles/115014483627-What-are-the-Fees-and-Taxes-for-Selling-on-Etsy?segment=selling ↩︎
