A beginner’s guide to learn all the things you need to know before start selling on Etsy, the e-commerce platform for independent creators
Etsy is a third-party e-commerce platform that makes it easier for small creators and businesses to expand their reach, showing (and hopefully selling to) a wide audience that may not have ever found them otherwise. For many, this allows them to turn talent and a few products into a lucrative business, building momentum and collecting reviews on a trusted site that customers are willing to purchase from.
Creators and small e-commerce businesses often find themselves with valuable, high-quality, and sometimes niche products to sell, but the struggle is real when it comes to competing against major brands to build an audience and get traffic to the site to make those purchases. If customers search for a “hand-woven blanket” in Google, there are plenty of options available through big-name businesses that promise to offer exactly that. This is why many turn to Etsy.
In this post, we’re going to discuss everything that sellers need to know about how to sell on Etsy so you can see how to open up your Etsy store and position it for success.
Here is What you Need to Know Before Selling on Etsy
- 1. What is Etsy?
- 2. How does Etsy work?
- 3. Nine essential tips for selling on Etsy
- 4. How to open an Etsy shop
- 5. Is selling on Etsy worth it?
- 6. Alternatives to Etsy
1. What is Etsy?
Founded in 2005, Etsy is an online e-commerce marketplace for independent makers, crafters, and collectors who can open virtual storefronts to sell their products. Around 80% of sellers are women, and all are independent creators.
It’s a little like Amazon for independent sellers who are selling handmade, unique, or niche products. The goal is to create an expansive marketplace of products from different sellers so that customers can find great vendors. There are over 4.3 million sellers on Etsy as of 2020 and over 60 million products as of 2019, and the platform is growing rapidly, meaning that there are plenty of great finds for customers.
Some sellers stick to creating items on demand as orders roll in, while others have an inventory ready to go. Sellers can stay small while others scale significantly on the platform as their businesses grow.
Some on-platform sellers have thousands of reviews, vast arrays of products, and even customized branded packaging. They’ve gone beyond a “hobby business” and found full-time profitability and success.
Here, artists can sell physical goods like home goods and clothing, digital downloads, vintage items (which must be 20+ years old), and craft supplies through either organic search or promoted listings. They can do so on their terms, choosing when they’ll ship out items, what shipping carriers they want to use, and how much they want to charge. They can also enable or disable different third-party payment options, giving sellers a large amount of control over their storefronts while still granting buyers high levels of flexibility that benefit them.
Meanwhile, users can browse different product categories or search exactly what they’re looking for. Once they find an item they like, they can read detailed descriptions and view images of the product, check out reviews, and look at the seller’s profile. They can even message the seller directly with any questions that they have. It’s a personal, direct interface while still allowing sellers to have a professional virtual storefront appearance.
2. How does Etsy work?
Etsy is a straightforward platform for both customers and sellers.
To get started on Etsy, you just need to create an account, choose a username, and then head to the “Sell” section of their site to open up your shop (which we’ll talk more about). Sellers will set up their store with a description and profile picture, upload their inventory, and create product listings. You can customize shipping costs, carriers, and delivery times as you choose.
While it’s free to open a shop on Etsy, you’ll pay a fee for each product listing, and a transaction fee with each sale.
To become a customer on Etsy, you can create an account or checkout as a guest. You can then browse products by category or search for products if you have something specific in mind. When you find what you’re looking for, you can review detailed product descriptions, reviews on the product and the seller from other customers, and information about shipping options. Payment options vary based on the seller, but credit card and PayPal payment options are almost always available.
Customers and sellers can communicate back and forth. This allows customers to ask about products before purchasing, request updates about order tracking, and discuss concerns or further questions once the item is received. Sellers can also reach out to ask for reviews.
Do you need a business license to sell on Etsy?
Etsy’s company policies do not require sellers to have a business license to open or operate a shop on the platform. Many sellers operate without a business license.
That being said, Etsy isn’t the only one with a say here. It’s important to check your city, state, and country regulations to see if they require a business license or any specialized permits. Some areas may require you to have a business license and permits if you’re selling certain categories of products, like food or living plants. If you’re unsure, you can consult a local business lawyer or a qualified small business CPA.
Even if your local and federal government doesn’t require a business license, there are perks that come with a license you may want to consider. This could include the protection of your personal assets or potential tax savings. Again, this is worth talking to a lawyer or CPA about to see what’s best for you.
How much does Etsy take?
While it is free to open a storefront on Etsy, selling on Etsy does come with a price tag attached.
Their new pricing structure and policies (which launched June 23, 2021) include the following:
- Listing fees. Every listing you create costs $0.20 regardless of whether or not the item sells. (The exception to this is a private listing, where you’re only charged the $0.20 once it sells) Listings last four months after which they’ll automatically renew for another $0.20 each unless you disable automatic renewal.
- Transaction fees. Each sale processed through Etsy will incur a 5% transaction fee. This is 5% of the price displayed for the listing plus the amount charged for shipping and/or gift wrapping. As a result, it’s important to factor this into your pricing structure and shipping costs.
- Payment processing fees. Payment processing fees depend on the method customers choose to pay with. Etsy Payments may reduce these costs, but they vary depending on the location of your bank.
- In-person selling fees. Heading to a farmer’s market or a craft fair? You can use a Square reader to sell items from your Etsy store to customers in person and receive a $0.20 transaction fee along with Square’s payment processing fees.
- Optional subscription fees. Sellers in good standing with the company can pay for a $10-plus-tax-per-month subscription to Etsy Plus, which offers additional tools for growing brands. Each month, this subscription gives you 15 credits for product listings, or $3, and $5 in Etsy Ad credits, but you must use them within the billing cycle.
- Pattern fees. Want to create your own personalized website off of Etsy? Etsy’s Pattern tool allows you to do this. Following the 30-day free trial, it has a monthly subscription fee of $15.
- Regulatory operating fees. Sellers in some countries will receive Regulatory Operating fees on every transaction, which is a fee based on a fixed percentage of the price displayed in each listing plus shipping. These often come as a result of increased costs associated with compliance regulations in each country.
- Shipping fees. While you can set costs so that your customers are paying for the overall shipping costs, Etsy allows sellers to purchase shipping labels for easy order fulfillment. The cost of the shipping label and add-on features like a signature confirmation or insurance will be deducted from your balance.
What can you sell on Etsy?
You can find an enormous array of products on Etsy, but the three most common types of goods according to Etsy’s own data are handmade items, vintage items, and craft supplies. Approximately 90% of items on the site fall under the handmade category, which can include any of the following (and more):
- Homemade clothing and jewelry
- Small-batch cosmetics
- Food, including everything from spice rubs to sourdough starters to cupcakes
- Live plants
- Home decor
- Pet goods like leashes and collars
- Home goods like plates, chopsticks, and pillows
If the item isn’t vintage or a craft supply, it must be made by the seller and list all people involved in the creation in the “About” section of the product. There’s no drop shipping or curating of products to sell on the platform by third parties when it comes to handmade items, increasing authenticity.
Craft supplies can include party supplies and can be handmade, commercial, or vintage.
Note: You must also use your own original photographs in listings, even for commercial craft supplies. All photos need to really represent what the customer will purchase.
What can’t be sold on Etsy?
There are some things that cannot be sold on Etsy.
You cannot resell goods from other sellers on Etsy.
You also can’t sell any of the following, as they’re prohibited by Etsy’s selling policy:
- Alcohol, drugs, tobacco, and drug paraphernalia
- Medical prescription drugs
- Certain animal products
- Human remains
- Dangerous items like recalled items, hazardous materials, or weapons
- Items that promote, support, or glorify hate or violence
- Internationally regulated items
- Illegal items or those that promote illegal activity
- Mature or pornographic content
- Items that infringe on someone else’s intellectual property
3. Nine essential tips for selling on Etsy
When you want to start selling on Etsy, there are steps you can take to set your storefront and your products apart from the rest.
You won’t want to skip the following essential Etsy selling tips:
- Post high-quality photographs. You need to post original photographs, but they still need to be dazzling. As users are browsing, they’re going to choose the ones that look the most more often than not. Use high-resolution, clean images that clearly show the product. Include multiple images on the product page for best results.
- Optimize for search. Many people are using Etsy as a search platform to find products they want, whether it’s a fifty-year-old sourdough starter or a wreath for Christmas. Whatever you’re selling, make sure that each listing is optimized to show up in search when users are looking. Include keywords in the product description, and consider using different keywords in the product listing to cover your bases.
- Treat your storefront like an actual storefront. If you want to turn Etsy into a viable income, treat it like the business opportunity that it can be. Choose a great profile picture (which can be a custom logo), use consistent branded images, and make sure that the personal profile attached to your business profile is strong, welcoming, and approachable.
- Provide great customer service. Potential customers may reach out to ask questions before making a purchase. Existing customers may reach out to follow up on an order or to request help if something went wrong. Getting great customer service will make them want to purchase again and leave great reviews. Both help your business.
- Research the top competitors in your space. You can learn so much from even a short bout of competitor analysis. You can see how users are writing about their products, what terms they’re showing up in a search for, how they’re pricing products, and what reviews say about them. Use this information to improve your own business.
- Build a social media following. Some popular Etsy creators build dedicated followings just like businesses do, and these users will happily follow you on social media. Create an Instagram, a Facebook Page, or even a Facebook Group to keep your enthusiastic customers up to date about everything happening with your business.
- Consider custom, branded packaging. This goes back to “treat it like a real business because it is.” You can purchase custom, branded packaging supplies like boxes, mailing envelopes, product labels, and even thank you cards or usage brochures that come in handy every time you fulfill an order.
- Offer discounts for future purchases. Want to incentivize repeat purchases? Etsy has features in place that allow sellers to generate custom coupon codes. You can send these out at any point, but you can also send them in postcards or messages after a customer converts, encouraging them to purchase again later.
- Become part of the Etsy community. Want to help your storefront and account to gain some credibility quickly? Integrate yourself into the Etsy community. Participate in the forums without being overly promotional, and try to partner up with other sellers to create enticing package deals. Trust can go a long way.
4. How to open an Etsy shop
If you’re ready to open your first Etsy shop, let’s go step by step through the process of creating an account, opening and optimizing your shop, uploading product listings, and starting to make sales.
Step 1. Sign in or create an Etsy account. Creating an account on Etsy takes just a few minutes, and you’ll need to create both a personal account and then, through that, set up a storefront.
First, head to Etsy’s home page and select “Create Account” at the top of the page. You’ll be asked to enter information like your name, address, and contact information. You’ll also choose a username. Then you’ll receive a confirmation email from “firstname.lastname@example.org,” which you can verify quickly.
You can then log into your new account, where you can add an “About” for your profile and a profile picture.
Step 2. Click Sell on Etsy on Etsy.com. Once your profile is complete, you’ll find the “Sell” option on Etsy and click it.
Step 3. Click Open your Etsy shop. At the bottom of Etsy, you’ll see the option to open a shop. Click it.
Step 4. Optimize Your Etsy Shop Profile. Once your new shop is open, it’s important to start optimizing it for search, visibility, and a solid first impression right away.
Make sure to use the following best practices when setting up your shop’s profile:
- Use a cover photo for the homepage of your storefront, which will be 3360 x 840 pixels. They are both desktop and mobile friends and should represent your brand well.
- Write a strong “About” section for your store, explaining what you offer, what makes you unique and credible, and anything else you feel could help set you apart.
- Use a shop icon that’s consistent with your business logo and overall branding.
- Look for keywords that users might search for to find your products. If you’re selling jam, you may have relevant products for searches like “homemade jam,” “organic jam,” “natural preserves,” and “sugar-free jam.” Consider which keywords may give you the most visibility and try to include them in the profile copy and title.
- Introduce any and all team members in the Shop Members section.
Step 5. Write an Impressive “About” Page. We mentioned the “About” page above, but it’s so important we’re going to dive a little deeper into it here.
Your “About” page gives you 5,000 characters to explain who you are and what makes your business exceptional; you want to take full advantage of that.
This is your chance to highlight why your creations are exceptional and why they should buy. You can highlight your achievements, experience, knowledge, and your business’s USP.
When writing your “About” page, it helps to keep the following in mind:
- Be welcoming and approachable; you want potential buyers to like you and feel a rapport with you
- Talk about what made you want to start your business; storytelling is always a plus
- Introduce partners or vendors that you work with to develop or source product materials
- Use short, concise paragraphs and simple sentence structures
- Include links to social media and/or a list to opt-in to your email list
- Include links to any third-party media that mention you or your products
Step 6. Set your shop preferences. Your shop’s preferences will tell Etsy basic but crucial information about how you’re choosing to sell your items.
The preferences include:
- Shop language. This is the default language you use on your profile and in product listings. You cannot change it later but you can add translations in other languages by enrolling in other languages after officially opening your shop.
- Shop time commitment. Is selling products your full-time or part-time job? This won’t impact the actual setup of your shop, but Etsy uses it for information purposes.
- Shop country. Where does your shop operate out of? This can matter for a number of reasons including certain restrictions based on location.
- Shop currency. This determines the currency you’ll use to price items in your listings. Note that currency conversion fees could apply if your shop currency is different from the currency used by your bank of choice.
Step 7. Choose your shop name. We’ve also mentioned this already, but again, it’s important enough that it gets another section.
Your shop name does more than represent your brand; it is your brand. It can help explain to users who you are, set the tone for your shop, and help you stand out from others. It’s important that it’s memorable and relevant.
You’ve got 20 characters for your shop name. You’ll choose this when setting up your store. And though it can be changed at a later date, it’s important to remember that brand name recognition is important; you want customers who go looking for you to be able to find you.
Ask yourself the following questions:
- What is the core offering of your business?
- What feeling or vibe do you want your store name to convey?
- If you ask family or friends about the store name, what did they think?
- Does the name look good on a business card?
- Is the name easy to spell, read, and type without errors?
- Is there an alternative meaning in other languages that could be offensive?
- Is the name already taken?
When coming up with store names, we know that it can be difficult and that a lot hangs in the balance. Here are some creative ways to come up with high-performing names for your Etsy store:
- Use descriptive names that evoke the feeling you’re going for. “BoozyJams,” for example, is pretty straightforward; you’re going for the fun vibe of “boozy” instead of “liquor,” and it’s descriptive.
- Consider opting for puns or creative word choices. Puns can be memorable and show a sense of humor that customers love. “NoWayCrochet,” for example, tells users that you’re offering crochet goods and that you’ve got a sense of humor.
- Try combining two words. Trying to find something creative for your home-grown plant business? Try something like “Plantastic” or “Plantorama.” It’s on-topic but something that others are unlikely to have.
Step 8. Keep your shop policy simple. Etsy allows store owners to set up their own shop policies. This is a huge advantage, but it’s important to remember to keep it simple; otherwise, you may end up driving users away, and those are users who were likely high intent and interested in purchasing.
Common examples of shop policies include:
- Free returns within 30 days
- Returns or replacements made for damaged items as long as you send proof of item receipt and damage within 5 days of the shipment being received
- No returns on personalized items
Policies should be simple and straightforward. If you’re unsure of where to start, Etsy has a basic shop policy template that allows you to adjust different options as you see fit.
Step 9. Add product listings to your shop. As your shop is open, you can go to your “Shop Manager” and then click “Add listing.”
Step 10. Optimize product photos. Make sure that every single product photograph that you upload is excellent. High-quality, not-cluttered images are an absolute must.
Try to include as many images of a product as possible to help a client feel comfortable about purchasing.
A clothing company, for example, could show the item from the front, from the back, and on a model.
A creator selling homemade chocolate truffles could show photographs of the array of truffles, the truffles in the packaging, and a truffle broken open to show the ooey, gooey center.
Think about what would help your products sell, and invest in the pictures to get those sales.
Step 11. Add relevant categories and attributes. Users can browse different categories of products on Etsy, making it essential to ensure that your products are listed in the most accurate category possible. This helps interested customers find you.
You’ll see that there are plenty of different subcategories available for every category on Etsy. Take the time to go through each one to see what best fits your brand and products.
You’ll want to do the same thing for attributes, which helps the red halter dress you’re selling show up when users are browsing “clothing” and then “dresses” and choose to view only red items. Attributes can include use, color, occasion, and more.
You can test different categories on Etsy to see what works for you. An easy way to do this is to check the search results for different possible categories that you think your products may fit into, and then assess which searches had results most similar to yours.
Step 12. Maximize your tags. Tags are short phrases or even single words that are 20 characters are less than you would use to describe your product. And they’re a big deal on Etsy, as the platform uses them to determine whether or not your product is relevant to buyer searches.
Tags, when combined with attributes and categories, wildly influence search results. It’s crucial to take the time to get them right.
Tagging best practices are relatively simple:
- Include tags with phrases and long-tail keywords like “organic fine ground flour” instead of just “flour”
- Use all 13 tags available on every product listing
- Try to use some tags that are similar to your product keywords
- Check for missepllings
- Only use tags in one language
- Keep it relevant; only use tags that people searching for your products may want to find
Step 13. Write effective product descriptions. Product descriptions matter. They explain why users should purchase, and it should detail the product’s condition, age, physical description, uses, measurements, ingredients, and (if relevant) manufacturing process.
The product descriptions often carry equal weight to the product photographs as being the two big factors that most influence purchase.
The product description is an integral part of your listing. It details your product’s measurements, condition, color description,
Some product description best practices include:
- Specify who the product can help and what pain points it can resolve
- Mention the materials or techniques that went into product development, including relevant information like “small-batch” or “gluten-free made”
- Use keywords that you included in your tags or attributes if possible
- Always mention the age of vintage products in the descriptions
- Think about using descriptive terms like “modern,” “boho,” “natural,” or “calming,” as these can come up in search
- Detail the dimensions and weight of the product and if possible the size of the package when shipped
- Include information on how long it will take to create and ship the product from the order date
- Use simple sentences and short paragraphs, but rich language, and don’t be afraid to keep it interesting with the copy
Step 14. Choose how you’ll get paid. According to Baymord Institute, 6% of online shoppers have abandoned their carts in the last quarter because there weren’t enough payment options. It’s important to consider that while online shopping is becoming the norm, there are still potential customers that will hesitate to share their credit card details online, no matter how secure your website. This lost opportunity can be easily avoided by maximizing available payment options for your store.
Etsy store owners should take advantage of Etsy Payments. This gives you the ability to offer a wide variety of payment options without having to open multiple merchant services accounts. Etsy payments can be used to accept:
- Credit cards
- Debit/bank cards
- Etsy Gift Cards and Etsy Credits
- Apple Pay
- Google Pay
You’ll want to make sure you also provide options for in-person customers. Square has partnered with Etsy to provide sellers with a quick and secure way to complete in-person payments from your phone or tablet and sync your shop inventory. Simply go to the Shop Manager page, choose Square from the Add Channel options, follow the prompts and you’re good to go. You also get a Square card reader for free when you sign up.
Step 15. Set up billing. You’re almost there! Now, it’s time to set up billing, which is how you will pay Etsy for any fees, which may include subscription fees or any fees that can’t come out of your balance.
Depending on your country, you may need to enter payment information in the form of a debit or credit card to open your shop. This must be a Visa, Mastercard, American Express, or Discover. Sellers in France can use a Carte Bleue. Sellers located in Austria, Germany, and the Netherlands aren’t required to have a credit card on file.
If you are required to have a credit card on file, you’ll see an authorization charge to verify the card, but the charge will be dropped from your statement as soon as verification is made. This typically happens over a several-day period.
Sellers can also add a prepaid card to your account after adding a credit or debit card; it can’t be your only primary payment method.
Step 16. Open your shop. If you’ve arrived at this point, you’re finally ready. It’s time to launch your shop, making it visible to all your new, anxiously awaiting, and soon-to-be customers. To do this, simply click “Open Your Shop.”
You’ll be given a website address to your shop, which will be:
Congratulations! And remember that you can edit your shop at any point.
5. Is selling on Etsy worth it?
Most sellers would agree that selling on Etsy is absolutely worth it, particularly as long as you’re factoring all the seller’s fees into your pricing.
Selling on Etsy does take time, energy, and some upfront costs in the form of listing fees and any other costs associated (which may include business licenses, product material or manufacturing costs, tax preparation, and more). It can also be slow going at first while you’re learning the platform and slowly gaining momentum over time.
There are several distinct cons that are worth pointing out:
- There’s fierce competition on the platform; there are plenty of shoppers, but there are also a lot of business owners, too.
- If you have a great product, someone else will likely notice and play copycat to try to generate their own version; unfortunately, however, this is almost always true in business.
- There’s often a distinct lack of customer loyalty because there are so many options and users are excited to try them, especially at low costs; they may be looking for handmade products but not necessarily yours, though building a brand can help with this.
- It can be more difficult to build a following, including on social media or through an email list; this is because you need to send users off-site to sign up for an email list or to check out your blog, and it’s harder to really elevate your brand on the platform.
All that being said, the pros of Etsy often outweigh the cons. The list is shorter, but the items on it carry a ton of weight. It includes:
- It’s quicky and easy to set up, it’s easy to use on an ongoing basis, and it’s relatively cost-effective.
- It has enormous reach and the potential to put you in touch with an engaged and trusting audience faster than your own website likely would.
- It’s a great way to expand to new audiences, test new products, and learn about business ownership without exorbitant fees.
6. Alternatives to Etsy
If you’re not sure if Etsy is right for you, or if you decide that it is right for your needs but you’d like to expand your reach further, you can check out the following Etsy alternatives:
- eBay, which has a larger focus on reselling goods, but you can sell new and original items here, too
- Poshmark is a fashion marketplace, so you can list used, new, or boutique items
- Amazon is a third-party marketplace platform that sellers can use to expand their reach further
- Mercari is a Japanese e-commerce platform that sells new and used items (including vintage and handmade items) to US and Japanese customers
In addition to third-party marketplaces, you also have the option to create your own e-commerce website. This is fairly easy to do, especially with sites like Wix and Squarespace (which have e-commerce integrations) or e-commerce website platforms like Shopify. You will need to handle your own credit card processing, shipping, SEO, site building, and site registration.
While there are both pros and cons to selling on Etsy as we’ve discussed above, the reality is that it’s a little like a creator’s paradise in many ways.
There’s a massive, engaged, and trusting audience on Etsy. Here, users are more willing to buy from small creators than they might be on a site like Amazon because the goal is to try to find handmade items from niche creators. The fees are also relatively low cost compared to some other platforms, and the ease of setup and continual use is hard to pass by.
If you’re ready to launch your own creator business, Etsy is just a few clicks away. It might be time to get started.