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How to Open an Etsy Shop

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For makers of handmade products, Etsy has become one of the go-to places to sell everything from toys to wedding gowns. Gone are the days of lugging your merchandise to a local craft market to set up a booth or table, only to pack up in a few hours and bring it all back home.

Etsy, based in Brooklyn, New York, is an online marketplace for international sellers of goods and services, emphasizing handmade or one-of-a-kind products.

“Etsy has a platform designed for people who have a talent or hobby that they want to turn into a business,” said Liz Jostes, business consultant and co-owner of Eli Rose Social Media.

Etsy has more than 2,000 sellers in its marketplace, as well as 37,000 active buyers, as of September 2018. You can open your own shop for free and list items for $0.20 each. Etsy charges a 5% transaction fee and a payment processing fee of 3%, plus $0.25, when you make a sale. Other than that, Etsy doesn’t charge a fee for membership or subscription.

If you’ve been wondering how to open an Etsy shop, we’ll walk you through the first steps to establish your presence in the marketplace.

Choosing your Etsy business

While Etsy supports sellers of both goods and services, product-based shops tend to perform better than service-based businesses, said Gail Oliver, consultant and founder of Attention Getting Marketing. And shoppers are typically looking for items they can’t find anywhere else.

Etsy shoppers also look for affordable deals and don’t want to spend too much, Oliver added — for example, according to Oliver, jewelry usually sells on Etsy for $20 to $50.

“I haven’t yet seen people in the high end do very well on Etsy,” she said.

Wedding-related products perform well on the site, Oliver said, especially engagement rings and wedding dresses. Brides generally want unique pieces that won’t break the bank, and Etsy meets that need for budget-conscious brides, she said.

Customizable gifts are also popular, such as T-shirts. But just because a certain category is popular, it doesn’t mean it’s the best choice for your new Etsy shop, Jostes said.

“Obviously more popular stuff has more competition,” Jostes said. “It’s not like picking something for the sake of being popular is the best option.”

When starting an Etsy shop, she suggested sticking to your own natural niche.

5 steps to setting up your Etsy shop

1. Choose your shop name.

Once you’ve signed up for an Etsy account, you can choose to “Sell on Etsy” and then follow the subsequent prompts, which will include naming the shop. Your shop name appears in the URL for your Etsy store and at the top of the page that shows all of your products. Your shop name can be no more than 20 characters without punctuation or spaces. You don’t have to stick with your first choice — you can change your shop name as many times as you want before completing the opening process and one time after you’ve officially opened.

2. List products.

Your product listings should give customers as much information as possible since they won’t interact with anything in person, Jostes advised. Aim to list nine to 12 products at a minimum to give shoppers a decent amount to scroll through. Your listings should include the following elements:

Photos. You don’t need professional photos, but they do need to be high quality, Jostes said. A smartphone should provide adequate photos, and bright lighting and a clean background, such as white poster board, would make your photos more appealing. You should show products from multiple angles. Placing a product next to another item to show its size would also help people get a better sense of what they’re buying, Jostes said.

Product title. Your product title should be literal to give you a better chance of showing up in customer searches on Etsy, Jostes said. For example, if you’re selling customizable dog bowls, say so in the title, resisting the cutesy “refreshment for Fido.” Before settling on a title, you could perform your own search with the words you’re thinking of using. If the search results match similar products to your own, then you should be good to go, Jostes said. You can also add tags to Etsy listings to help your products appear in searches. Phrases are more effective than single terms and you can add up to 13 tags per listing.

Product description. Explain every detail related to your product, Jostes said, including materials and different size or color options that are available. You could also mention in your description that customers can contact you with any questions or requests — being personable with your customers could improve their perception of you and your Etsy shop, Jostes said.

Price. Your price should account for the cost of materials per item and time spent making it. Calculate your price by the number of hours you devote to each project, Oliver said. You could search for similar items on Etsy to find out the average price point.

3. Set up payments

Etsy asks for your bank information to allow you to deposit earnings from your shop. You can accept payments via major credit cards, PayPal and Etsy gift cards. Etsy charges $0.20 per listing plus 5% of the total of each item, including shipping costs once the item has been sold. Shop owners may set shipping prices manually or Etsy can calculate it for you using U.S. Postal Service rates. You may also have various fees for shipping labels or accepting payments in person.

4. Optimize your listings for search.

Search Engine Optimization, or SEO, can improve the chances of your Etsy shop appearing in Google and other search engine results. You can optimize your shop title and keywords to include the most common search terms related to your business. In-bound links also help your search performance. Linking to your Etsy page from your personal blog or business website, or asking others to add a link on their websites would improve your shop’s SEO.

5. Market your shop.

Once you open your shop, customers don’t automatically appear. You have to market and promote your Etsy shop yourself, either on social media or through paid promotions on Etsy, Oliver said. For a price, Etsy will promote your shop in relevant site searches. However, it’s not guaranteed: appearing as a promoted listing depends on how much you’re willing to pay and the quality of your listing. If you already have a large online following before launching your shop, you may have more opportunity to generate sales right away. If not, you just have to be patient, Oliver said.

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The pros and cons of starting an Etsy store

Pros

Affordability. Etsy only charges you when you list an item and when you make a sale, compared with other platforms like Shopify that charge a monthly subscription. Etsy also handles the design and layout of webpages so you’re not responsible for the technical aspects of the shop, Oliver said.

“[Etsy is] giving you this worldwide forum and a very inexpensive way to sell online,” Oliver said. “They take care of everything for you at affordable prices.”

Complements a brick-and-mortar store. Etsy can be a useful tool for owners of brick-and-mortar retail stores who want to start selling online. If you’ve already made products to sell in-store and have an established customer base, according to Oliver, it should be easy to post photos of those products on Etsy and start making additional sales online.

“Why not leverage Etsy? You already have everything ready to go,” she said. “Those are the people who have been doing quite well.”

An Etsy store could also complement an online store on your own domain. It could even serve in lieu of your domain, though some advisors recommend having both. New business owners could perhaps test out their product or service through an Etsy store and add their own website later. The advantage of having your own website is control — control over your store’s appearance and fees, though you may have to pay for web hosting and perhaps design and other services. Check out these free website builders for small businesses.

Opportunity for exposure. Etsy handpicks certain sellers to highlight throughout the site. If your shop is chosen, the number of eyes on your products could increase exponentially. Despite recent competition from Amazon Handmade and other sites, Etsy remains one of the biggest players in the handmade market.

On the off chance you are selected for featuring, you should have a plan in place in case your Etsy traffic does skyrocket, Oliver said. If you suddenly receive 500 orders, you need a strategy to fill those orders or risk damaging your brand, she said.

“If you can’t make it, there goes your whole reputation,” Oliver said. “You have to be prepared for growth.”

Cons

High competition. A downside of selling on Etsy is the mass of people you have to compete with, especially if you sell a common item like jewelry, Oliver said. Etsy allows some sellers to work with a production partner or manufacturer, which may be difficult to compete against if you’re a one-man shop. Sellers with production assistance may be able to make items faster than you can on your own and sell them for a lower price, Oliver said.

Idea theft. When you put your work and ideas on Etsy, you face the risk of being copied, Oliver said. Anyone, from other Etsy sellers to major retailers, could rip off your idea if you fail to protect your brand. If you can’t afford to trademark or copyright your work, you could be aggressive in your branding and marketing to shield your original idea, Oliver said.

Alternative online marketplaces

These shopping sites have offerings similar to Etsy — a place to host your online store and a large marketplace where customers can find you.

Amazon Handmade

Like Etsy, Amazon Handmade is a platform for artisan sellers who make handcrafted items. Amazon Handmade products appear in their own category within Amazon. Sellers pay a 15% fee when a sale is made, which includes payment processing, marketing, seller support and fraud protection. You can list up to 40 products free or pay a monthly fee of $39.99 if you want to sell more products.

ArtFire

ArtFire is an online marketplace for artisan sellers, similar to Etsy. You can sell handmade goods, vintage items and crafting supplies on ArtFire. Sellers can choose from three subscription tiers: Standard Shop for $4.95 per month and $0.23 per item listing, Popular Shop for $20 per month or Featured Shop for $40 per month. Though the Popular and Featured options do not include a listing fee, you would owe a 3% final valuation fee, which is a commission on each sale.

Zibbet

Zibbet allows you to set up an online store and gives you access to Zibbet’s global marketplace. Zibbet caters to independent artists, crafters and collectors, and provides custom domain names. Subscription plans range from $4 to $16 per month, but Zibbet doesn’t charge listing fees or transaction fees. You can set up automated payments with your credit or debit card and cancel your account at any time. If you already have an Etsy account and want to switch, you can copy your listings onto the Zibbet platform.

Etsy vs. three popular alternatives
Subscription Listing fee Transaction fee Good to know
Etsy None though sellers can opt for a $10/month Etsy Plus plan; Etsy Premium coming in 2019 $0.20/item 5% 3% + $0.25 fee per item if you use Etsy Payments (U.S. processing fee cost)
Amazon Handmade $39.99/month to list more than 40 items None 15% or $1 per item (whichever is greater) Customers can use free Prime shipping (for non-customized items)
ArtFire Standard: $4.95/month Popular: $20/month Featured: $40 per month None for Popular and Featured customers; $0.23/item for Standard users 9% for Standard users; 3% for for Popular and Featured users Bulk upload available for Popular and Featured accounts
Zibbet Plans range from $4 to $16  per month None None Etsy sellers can copy listings onto to the platform

 

Fees mentioned above are accurate as of the date of publishing.

Other e-commerce platforms

If you’re looking for a platform that can simply host your online store without an additional marketplace, these sites may work for your business:

Shopify

Shopify provides a platform for sellers to set up their own online store, create webpages or publish a blog. Shopify offers a 14-day free trial before charging a monthly subscription fee that ranges from $29 to $299, depending on the features you need. Shopify also collects a fee for online and in-person transactions made on the platform. Though you can sell handmade goods on Shopify, the platform is not limited to artisan sellers; Shopify works with businesses selling a wide range of items.

Square Online Store

Square, known for its point-of-sale system, offers an ecommerce service at a price point comparable to Etsy. Sellers can set up an online store for free and pay only when they make a sale. Square charges 2.9% plus $0.30 per transaction. Square provides customizable premade website templates and allows you to create a personalized URL for free. But, unlike Etsy, Square shops are independent websites and don’t exist inside a marketplace.

Mistakes to avoid when opening an Etsy shop

Relying too much on search.

Appearing in Etsy or Google search results puts your shop in front of many potential customers, but it’s not a reliable way to reach people, Oliver said. If you don’t have the right combination of keywords, you may not even show up in the first few pages of search results. You should dedicate time to promoting your Etsy shop as you would with any small business. Email marketing and social media can be useful tools to get the word out, Oliver said.

“If you have a really good social media following right now, on Pinterest or Instagram, you’re in a very good position to start an Etsy shop and bring that traffic to the shop,” she said.

Posting poor photos.

Much of your shop’s success relies on your product photos, so refrain from using low quality pictures of your merchandise, Jostes said. Your photos need to be eye-catching and appealing to customers and let them know exactly what they are purchasing.

If you can’t afford to hire a professional photographer or purchase a professional-grade DSLR camera, a point-and-shoot camera with at least 10 megapixels and a macro setting would do the job.

Underusing the product description.

Some Etsy sellers take the description area for granted and write just a few lines about their items, Jostes said. Your description should be robust and include as much information as you can fit. You could also include links to other items that you sell and explain why certain products would pair well, she said.

“You want to literally spell out every single thing,” Jostes said.

Once you become an Etsy seller, you should take advantage of all the site has to offer, including the name recognition associated with the platform, Jostes said.

“Etsy is well known by a lot of people,” Jostes said. “There’s that awareness and the trust of shoppers that Etsy is a reputable place to go.”

 

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