Invoicing for Etsy Sellers: Off-Etsy Sales, Wholesale & Commissions

If you run an Etsy shop, understanding when to use Etsy's internal cart versus an independent invoice is essential for your business profitability and legal compliance.

1. Why Etsy Handles Marketplace Orders Automatically

Under US Marketplace Facilitator laws enacted across almost all 50 states, when a retail customer purchases an item directly on Etsy.com, Etsy is legally recognized as the marketplace facilitator. Etsy calculates, collects, and remits state sales tax directly on your behalf and processes credit card fees through Etsy Payments. You do not need to send external invoices for standard sales completed through the Etsy cart.

2. When You Need an Independent Invoice as a Maker

As your craft brand grows, opportunities will arise outside of Etsy's retail marketplace:

  • B2B Wholesale Orders: Local gift boutiques, coffee shops, and retail stores wanting to stock 20 to 100 units of your handcrafted goods. Selling wholesale on Etsy incurs high retail transaction fees (6.5% transaction fee plus listing and payment fees). An independent invoice allows you to bill directly via ACH or check without Etsy marketplace commissions.
  • Large Custom Commissions: High-ticket custom furniture, specialized art installations, or corporate holiday gift packages where clients require formal PO numbers, 50% production deposits, and balance-due terms upon shipment.
  • In-Person Craft Markets & Trade Shows: Pop-up fairs where commercial buyers place wholesale purchase orders for deferred delivery.

3. Sales Tax Exemptions on Wholesale Orders

When selling wholesale to a retail store, the transaction is considered a sale for resale. In the United States, sales for resale are exempt from sales tax provided the buyer supplies you with a valid state Resale Certificate (or exemption certificate). Keep a copy of their certificate on file, and set the sales tax field to 0%.

4. Production Deposits & Damaged Transit Policies

Handmade goods take time and materials to produce. Always require a 50% upfront production deposit for custom or wholesale orders before ordering raw supplies. Clearly state your transit damage policy on your invoice terms: require buyers to photograph and inspect packages within 48 hours of freight delivery to protect against fraudulent carrier claims.