Selling on Etsy: A quick guide for German sellers

Selling on Etsy: A quick guide for German sellers

Selling on Etsy: A quick guide for German sellers

September 10, 2024

September 10, 2024

Are you a creative looking to sell unique handcrafted goods? Etsy, the leading e-commerce platform for handmade items, could be your gateway to success. This guide will walk you through everything you need to know about selling on Etsy in Germany, from best practices to tax obligations.


What is Etsy?

Founded in 2005, Etsy has become the go-to marketplace for designers, artists, and collectors worldwide. Its focus on handmade, vintage, and craft supplies makes it ideal for creative, self-employed artisans to showcase and sell their products.


Do I need to register as self-employed to sell on Etsy?

One-off low-price sales can be made without becoming self-employed. However, if you plan to sell regularly and make it part of your income, this is a professional activity, and you must register as self-employed (or a UG/GmbH).  

Think of it as selling used clothes on Kleinanzeigen or driving passengers. Selling your jacket once or helping your friend get to the airport for a beer is fine and constitutes private activity. If you regularly customize dozens of clothes or shuttle tourists, it’s considered a professional activity and requires registration as self-employed.

This means:

  • You must register self-employment with the Finanzamt (file Fragebogen zur steuerlichen Erfassung).

  • Register at the local IHK (Chamber of Commerce) and become a Gewerbetreibender (tradesperson).

  • File tax declarations, including personal income tax (Einkommensteuer).


Getting started: set up your Etsy shop

  1. Create an account on Etsy.com.

  2. Pick a unique, memorable name that reflects your brand.

  3. Choose your language, currency, and shop location.

  4. Add your products, including high-quality photos and detailed descriptions.

  5. Connect your bank account to receive payments.


Understanding Taxes for Etsy Sellers in Germany

1. Value Added Tax (VAT)

If your revenue is under €22,000 in your first year and under €50,000 in subsequent years, you can opt for Kleinunternehmerregelung (small business regulation). With Kleinunternehmerregelung, you don't charge VAT or submit VAT returns.

For revenues above these thresholds, you must charge and report VAT. Likely it will be 19% on top of your sale price and should be included in the price


2. Trade Tax (Gewerbesteuer)

Due on annual profits (not revenue) of €24,500 and above. Rates vary by municipality.


3. EÜR and income tax

EÜR is a simplified profit and loss statement that is used to calculate your business profit. EÜR is a part (an attachment/Anlage) to the income tax declaration.

Personal income tax applies to all your income sources, including Etsy sales. Rates range from 0% to 45%, depending on your total income. Is due annually, typically by July 31st of the following year.


Etsy fees: What to expect

  1. Listing Fees: $0.20 per item (listed for four months or until sold)

  2. Transaction Fees: 6.5% of the sale price

  3. Payment Processing Fees: 4% plus €0.30 for payments via Etsy Payments

  4. Optional: “Plus” plan

All these fees are tax deductible as business expenses.


Tips for success on Etsy

We interviewed a few Etsy sellers on Norman and here are top tips from them:

  1. High-quality photos: Showcase your products with clear, attractive images.

  2. Story above pricing: Actually the story behind the creator, the product origins and qualiy are much more important than the price.

  3. Excellent customer support: Respond promptly to inquiries, stay informal/friendly, and resolve issues quickly.

  4. Utilize Etsy's SEO tools: Optimize your listings for Etsy's search algorithm. Use relevant keywords and provide all necessary information.

  5. Engage with the Etsy community: Participate in forums and teams for networking and support.


Is Etsy right for you?

Etsy offers numerous advantages for creative entrepreneurs:

  • Audience of craft and unique item enthusiasts

  • Easy setup and user-friendly interface

  • Various seller tools and analytics

  • Strong seller protection policies

  • Marketing support through a social media presence


However:

  • Competition can be high in popular categories

  • Success often requires active shop management and marketing

  • Fees can impact profitability, especially for lower-priced items


🏆   Pro tip: Pair an Etsy store with an active Instagram business profile and a small storefront website. This way, you can diversify from the risk of having your Etsy account suspended unexpectedly and have more ways to tell your personal story.


Conclusion

Selling on Etsy can be an excellent way to start or expand your creative business. Its global reach and focus on unique, handmade items provides a perfect platform for German artisans and designers to showcase their talents. You can turn your passion into a thriving online business by understanding the legal and tax implications, managing your shop effectively, and leveraging Etsy’s tools. Norman will make your registration as self-employed and tax reporting effortless.

Remember, success on Etsy doesn't happen overnight. It requires patience, persistence, and a willingness to learn and adapt. But with dedication and the right approach, you can build a successful Etsy shop that brings your creative vision to customers worldwide.

Good luck on your entrepreneurial journey!

© 2024 Norman AI GmbH

© 2024 Norman AI GmbH

© 2024 Norman AI GmbH