An income boost is always a welcome change, but it’s especially helpful in tough economies like this one. Whether you’re looking to offset rising prices, cover monthly expenses or just make a little money to fund your extracurricular activities, now is a super time to start a side hustle.
Side hustles can take many forms but selling online with an Etsy shop is a popular choice for creative entrepreneurs. You may even end up with more than a modest income boost. Find success on Etsy, and you could find yourself running an online store that generates six-figure sales.
Intrigued? Read on for a detailed walk-through of how to sell on Etsy successfully.
What is Etsy?
Etsy is a worldwide marketplace for custom products. Some 96 million buyers visit Etsy each year to shop for craft supplies, handmade goods, or vintage items. Roughly 7.5 million active Etsy sellers serve those buyers. More than two-thirds (71%) of Etsy sellers manage their Etsy store as a small business — that is, as a way to generate profits and improve their financial independence.
To start selling successfully on Etsy, you must do two things well:
- Create products people love.
- Merchandise those products so people can find them.
Master those two tasks and you’re on your way to building a thriving, profitable Etsy store.
Pros of selling on Etsy
As you’d expect, there are positives and negatives to launching your own online store on Etsy. Let’s start with the positives.
Etsy store setup and maintenance is easy.
You can open an Etsy account and shop in minutes, and with zero technical knowledge. Etsy walks you through the process, which involves filling in text boxes and uploading photos.
It’s (almost) free to open your Etsy store.
Etsy doesn’t charge you to create your online store, but you will pay fees to list and sell your products. You’ll find more details on Etsy’s fees below.
Etsy has an audience.
As noted above, 96 million people shopped Etsy in 2021. Get your products in front of the right subset of that audience and your small business can grow quickly.
Buyers trust Etsy.
Etsy already has the trust of buyers, and you can lean on that trust to start selling. If you opened a standalone online store, you’d have to build that trust over time.
Etsy Payments provides payment processing.
Your Etsy shop automatically has a shopping cart that accepts payments in your currency. This spares you the hassle of setting up your own merchant services. You will need to register for Etsy Payments and set up a payment account, but that process is straightforward.
You can find help and support from other Etsy sellers.
Etsy publishes tons of resources to help you grow your online store. You can also join one of many online support groups for the Etsy community. Use those groups to share ideas, ask for help, and stay current on Etsy marketing strategies.
Cons of selling on Etsy
Etsy is convenient, but you will have to accept a few trade-offs as an Etsy seller. Below are five negatives to consider.
The marketplace is crowded with sellers.
No matter what type of product you sell, you’re likely to face direct competition from other Etsy sellers.
You must market your Etsy store and products.
It’s not realistic to list your products and wait for them to sell. To be successful as an Etsy seller, you must market your goods on and off Etsy. You can promote your shop on Etsy through proper descriptions and photography. Off Etsy, you can market yourself through SEO, social media, your own website and word of mouth.
Repeat sales can be challenging.
Etsy shops can struggle to generate repeat sales from their customers. This is because Etsy buyers often don’t pay attention to the shop name. They mostly retain the fact that they bought something from Etsy.
Keep this in mind as you develop your logo and brand messaging — design these brand elements to be impactful and memorable.
Etsy fees can be confusing.
You’ll pay to list products and renew those Etsy listings. You’ll also pay a transaction fee, a payment processing fee, and, sometimes, an offside ads fee. You might also incur fees for optional programs like Etsy Plus.
You don’t make the rules.
Etsy makes, and updates, rules that can impact the profitability of your online store. As an example, Etsy mandates that sellers use Etsy Payments for payment processing. You don’t have a choice on that, even if you have a merchant services account that would charge you less.
What are the shop policies for Etsy sellers?
Speaking of rules…Etsy has many. The rules for Etsy sellers outline prohibited behaviors, intellectual property, privacy, sanctions and trade restrictions, and shipping obligations. Plan on getting familiar with those policies early in the process so you don’t encounter any surprises down the road.
Most notably, there are rules defining what you can and cannot sell on Etsy, explained below.
What you can sell on Etsy
Etsy allows you to sell handmade goods, vintage items, and craft supplies only.
- Handmade items are designed by you. You can use a production partner, but you must name your production partner in your product listings.
- Vintage items are at least 20 years old.
- Craft supplies are items like stickers, stationery, beads, photo albums, and stamps. In Etsy’s words, they’re “tools, ingredients, or materials whose primary purpose is for use in the creation of an item or special occasion.”
If your products don’t fit into the Etsy mold, there are other ecommerce marketplaces you can check out. Amazon and eBay are the two big ones. Walmart and Target also have online marketplaces that are open to independent brands.
What you cannot sell on Etsy
You cannot sell services or resell goods that you didn’t make on Etsy. You also cannot sell items that promote violence, illegal activity, or hatred. Etsy also prohibits alcohol and drug-related items, weapons, mature content, and goods that are regulated internationally.
How much does it cost to sell on Etsy?
Etsy’s fee structure can be confusing because there are several layers of charges for active Etsy sellers. Below is a breakdown of five fees you’ll incur as an active Etsy seller.
1. Etsy store cost
Etsy doesn’t charge you to set up your shop. The only store-related charge is an optional subscription to Etsy Plus for $10 monthly. For that fee, you get a monthly credit for product listings and Etsy Ads, plus other perks to help you customize and market your online store and Etsy listings.
2. Etsy listing fees
You must list products on Etsy before you start selling them. Etsy charges you $0.20 for every product you stock in your Etsy store. Each Etsy listing expires after four months (unless you set it to auto-renew). You’ll pay the $0.20 again to renew the listing, either automatically or manually.
3. Etsy transaction and payment processing fees
Etsy’s transaction fee is 6.5%, and it’s applied to the listing price plus any shipping, gift wrapping, or personalization charges. You’ll also absorb payment processing fees of 3% plus $0.25. You may also pay a currency conversion fee.
4. Etsy store promotion cost
Etsy advertises products from its marketplace all around the web. If one of those ads features your product and it generates a sale, you’ll pay an “offsite ads fee” of 15%. You can opt out of this program, but only if your Etsy store sales are less than $10,000 in the prior year.
You also have the option to buy Etsy ads to promote your products to online shoppers.
5. Etsy shipping costs
As an Etsy seller, you will incur shipping costs. But you can pass those costs on to your customers, either directly or indirectly. The direct approach is to add shipping fees as a separate charge, on top of the product price.
Alternatively, you can embed estimated shipping fees into your prices. You’d then offer these products with no added shipping cost. Etsy prefers this method because buyers love “free shipping.”
If you’re in the U.S., U.K., Canada, Australia, or India, and you accept Etsy Payments, you can buy shipping labels from Etsy. These may be more cost-efficient than shipping products on your own.
How to sell on Etsy: Step by step
1. Research the online marketplace
Researching the Etsy marketplace is a great first step to launching your shop. Explore the marketplace to learn the landscape, meet the competition, and generate new product ideas.
Based on a recent Survey Junkie survey with Etsy buyers and sellers, consumers most often choose Etsy over other retailers because they like to support small businesses (33%), appreciate the more diverse or unique product options (32%), and enjoy home-made goods (22%). Additionally, Survey Junkie members with an Etsy shop shared that the highest priorities for their customers are finding unique or higher-quality products (47%), receiving personalized service (26%), and taking advantage of more affordable prices (22%).
Keep these motivations in mind as you’re building a framework for your own Etsy store to ensure your product aligns with consumer preferences.
2. Set your product strategy
The Etsy marketplace is crowded, so you need a solid product strategy to stand out. Survey Junkie members shared that they use Etsy primarily to shop for jewelry and personal accessories (37%), homewares and home furnishings (20%), apparel (15%) and craft supplies (14%). On average Etsy buyer purchases, the majority expect to pay $15-45. Lean on these top-selling product categories and price ranges to figure out where you can best fit into the marketplace.
Once you’ve determined your product offerings and price point, list out the goods you can sell, how you can price them, and what makes them unique. Use that information to find your top competitors and analyze how you measure up. Look for ways to differentiate your offerings from what’s already out there.
3. Research keywords
Using the right keywords in your shop content and product listings helps online shoppers find you via Etsy search and off-site search engines (like Google). Lean on research tools like SEMRush and Marmalead to identify the best keywords for your shop and products, and optimize your Etsy SEO.
4. Create your Etsy shop
The basic steps to create your Etsy online store are:
- Create a new Etsy account or sign into an existing account.
- Add your profile picture and bio. Your picture and bio appear when you engage with other Etsy sellers in the Etsy forums.
- Visit Etsy.com/sell > Get Started.
- Set your shop preferences: language, country, and currency.
- Choose a shop name. Your store name must be four to 20 characters long, with no spaces or special characters.
- Create an “about us” page. Tell your story. Let your prospective buyers know how you became an Etsy seller.
- Add shop policies. This is where you specify your rules for payment, shipping, refunds, and exchanges. You’d also include your contact information.
- Finalize your storefront. Brand your shop with your logo, shop banner, and shop announcement or welcome message.
Don’t skimp on your shop’s content. Your policies and “About Us” pages are opportunities to use your mission-critical keywords and connect with your customers at the same time.
5. List your products and optimize for Etsy searches
Product listings are the heart and soul of your Etsy shop. The more complete the listings are, the better positioned you are to appear in Etsy search results. Essential best practices are:
- Write short, but descriptive product names.
- Keep your product descriptions clear and detailed.
- Add tags. You can add 13 tags to each listing.
- Refer to your keyword research for names, descriptions, and tags.
- Use the most specific category you can find.
- Add attributes, like color, size, occasion, etc.
- Use professional product photos. Put the best photo first.
6. Select your payment method
All Etsy sellers must link a bank account and a payment method. The bank account is where Etsy sends the sales revenue collected through Etsy Payments. And Etsy charges the payment method — a credit or debit card — for your listing fees.
7. Promote your Etsy business on social media
Your Etsy store is not a magic path to quick profits. It’s a small business that you’ll need to promote. Use your personal social media channels to gain traction in the beginning. Announce your store opening and start sharing your products with your online friends and family.
You can also create social media accounts for the business and work to build your following there. A solid content plan will help — strive for balance among posts that pitch products, posts that entertain, and posts that educate your followers.
Top Etsy shop start-up FAQs
1. How do you make money on Etsy?
As an Etsy seller, you make money by selling and shipping handmade, vintage, or craft supply goods at a profit.
2. How to sell on Etsy without PayPal?
To sell on Etsy without PayPal, sign up for Etsy Payments. Etsy Payments is the marketplace’s built-in payment solution. Etsy Payments supports purchases by credit and debit cards, PayPal, Apple Pay, Google Pay, Klarna, and more.
3. Is selling on Etsy a good side hustle?
If you dream of launching your own online store, selling on Etsy can be a great side hustle. You can find success by developing a collection of interesting, competitively priced products — and then doing the work to market your shop.
4. How much does it cost monthly to sell on Etsy?
The monthly costs depend on how many products you list, your sales, and the optional services you use.
At a minimum, you’ll pay $0.20 to list a single product for four months. Each time you sell a product, you’ll pay 9.5% plus $0.25 to Etsy for transaction and processing fees. You may also absorb a currency conversion fee if the buyer pays in a currency that’s different from yours.
If you have one product, for example, you can list it on Etsy for $0.20. You won’t incur any other fees until you make a sale.
5. What are some tips for finding success on Etsy?
Survey Junkie members are both active buyers and sellers on Etsy. Those that sell shared a few tips for making the most out of your Etsy shop:
- Don’t skimp out on marketing; be consistent in your efforts.
- Invest in high-quality product pictures.
- Be creative and informative in your product descriptions.
- Have a wide variety of products to satisfy different customer tastes.
- Price fairly.
Is selling on Etsy right for you?
Relative to other online marketplaces, Etsy is more restrictive about the types of products you sell. But if you meet Etsy’s product requirements, setting up and maintaining your Etsy shop is mostly pain-free. You don’t need any technical skills — just a solid understanding of your products and what makes them unique. Working knowledge of how to research and use keywords helps, too.
If that sounds like a good fit for your skillset, then an Etsy side hustle might be your biggest, best step towards financial independence.
