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1. How profitable is selling on Etsy?

How to sell on Etsy: Build a profitable business in 5 steps

It's easy to learn how to sell on Etsy. The Etsy ecommerce platform lets you sell items such as wall art, drinkware, and clothing without having to set up your own website. All you need to start selling on Etsy is something to sell and a solid marketing plan. 

If you use a print on demand (POD) service to provide you with products, you don't even need to pay for merchandise up-front or handle inventory or order fulfillment. Etsy offers an easy way to start up a business on a shoestring budget. A successful Etsy shop can serve as a platform to launch a business and expand onto other platforms later.

In this article, we'll share a simple, five-step plan to start selling on an Etsy online store. First, we'll explore the profit potential of selling on Etsy. Then, we'll cover what you should know before you become an Etsy seller. Finally, we'll walk you through everything you need to do to sell on Etsy, from market research to managing your Etsy shop.

Main takeaways from this article:

  • To keep your Etsy shop profitable, price your products high enough to offset paying approximately 25% of your total sales to Etsy, plus covering other business expenses, such as the cost of materials, labor, packaging, and shipping.

  • Etsy can be used to sell handmade goods, vintage items, and craft supplies.

  • Choose a niche for your Etsy shop by doing keyword research.

  • Sell products with a high profit margin and low production and shipping costs.

  • Set up your Etsy shop with high-quality photos, strong product descriptions, and good keywords.

  • Promote your Etsy shop using tools such as websites, blogs, email marketing, and social media.

  • Optimize your Etsy store with analytics and customer feedback.

How profitable is selling on Etsy?

Etsy sellers generated $13.3 billion in gross merchandise sales in 2022, according to Etsy investor relations data. The platform had 7.5 million active sellers and 95.1 million active buyers as of May 2023. In the fourth quarter of 2022, each US customer averaged 2.7 sales with an average value per sale of $42, according to Etsy sales data analyzed by Bloomberg Second Measure. In other words, the average customer spent $113.40 in the fourth quarter, when annual sales peak. A craft or fine artist working from a home or commercial studio earned a median pay of $49,960 in 2021, according to the US Bureau of Labor Statistics.

What you earn individually will vary with your products, pricing, marketing activity, and business expenses. Your Etsy profits can be calculated by taking your sales revenue and subtracting fees charged by Etsy, taxes, and expenses associated with producing, selling, and shipping your products. To keep your Etsy business profitable, make sure to set your prices high enough to offset these payment processing fees and other expenses. Overall, you should price your products high enough to offset paying about 25% of your total sales to Etsy, plus covering your other business expenses.

Etsy currently charges a listing fee of $0.20 for every product you list, a 6.5% per transaction fee, an additional Etsy Payments processing fee per transaction that varies by country (3% plus $0.25 in the US), and sales tax that varies by location. You can pay optional additional fees to use advanced Etsy Plus promotional tools, advertise through Etsy Ads, or set up a website synced with your shop through Etsy's Pattern web-builder app. In some locations, you can buy shipping labels for order fulfillment. If you sell products in person using Etsy's partnership with Square, you must pay an in-person selling fee. Other fees may apply.

In addition to transaction fees and other fees charged by Etsy, you should factor in expenses associated with producing and shipping your goods. These include costs of materials, labor, packaging, and shipping fees. Note that these expenses may be tax-deductible.

What to know before becoming an Etsy seller

What to know before becoming an Etsy seller

Before you become an Etsy seller, you should be aware of a few of the platform's key policies and features that can shape the success of your ecommerce store:

  • Etsy lets you sell handmade items (either made or designed by you), vintage items at least 20 years old, or craft supplies.

  • When selling handmade items not physically made by you, you must use your own original designs, but you can use in-house shop members or production partners, such as printing, apparel printing, or 3D printing services.

  • You cannot resell handmade items made or designed by someone else on Etsy.

  • You cannot sell items in the vintage category that are newer than 25 years old, merely vintage in style, or collectibles.

  • You cannot sell items in the craft supplies category that are mass-produced clothing or accessories or blank items ready to use as-is (such as blank sweatshirts with no customized designs).

  • Etsy offers you minimal customization options for your Etsy shop, making your sales depend heavily on eye-catching graphics and product images.

  • For an optional subscription fee, Etsy lets you access advanced customization features through Etsy Plus.

  • For an additional fee, Etsy lets you expand your shop by building a website synced to your shop using their Pattern web-builder service.

  • You can use other websites, social media profiles, and ads to drive traffic to your Etsy shop or Pattern website.

  • Etsy charges fees for listing items, transactions, payment processing, and certain other variable items.

  • Etsy collects sales tax for orders shipped in the US

Study Etsy's website and terms of service for additional details on these and other items.

How to sell on Etsy in five steps

The process of getting set up on Etsy breaks down into five major steps:

  1. Choosing a niche

  2. Deciding what to sell

  3. Setting up your Etsy shop

  4. Promoting your Etsy business

  5. Optimizing your Etsy store

Here are some guidelines on how to execute each step:

1. Choose a niche

Choose a niche

Market niche research lays a foundation for effective Etsy marketing. Researching market niches helps you identify what's selling. It also helps you identify niches where you have a better chance to compete. Etsy is a competitive marketplace with many sellers, so you have a better chance to make sales if you can find a niche where your product will stand out. Ideally, look for a niche with high demand and low competition where you can offer something unique.

Besides being profitable, a good niche should align with your interests, skills, or hobbies. Look for a niche that brings together your passions with what you're good at doing or able to produce.

You can use a variety of methods to research niches on Etsy:

  • Study Etsy's category menus to see what types of items are popular.

  • Select a product description and scroll down to explore related searches.

  • Enter a term in Etsy's search bar and see what popular searches come up.

  • Browse Etsy's Trending Now and Editors' Picks pages.

  • Use search bars on other sites such as Google and Pinterest.

  • Use search engine optimization (SEO) keyword tools such as Google Keyword Planner.

  • Search for what's trending online using tools such as Google Trends and Pinterest Trends.

After your Etsy shop is up, you can access additional tools for niche research, such as statistics on what keywords customers used to find your products, which of your ads got the most clicks, and analytics data on how your listings were found. Use these tools to update your niche research.

2. Decide what to sell

Once you have a niche, you can start narrowing down some products to sell. Your niche market research should have helped you identify some popular categories of products. Within each category, you can select some products to sell.

To promote a sustainable business model, select products that have a high profit margin, low production costs, and low shipping costs. A good way to do this is source products from companies that drop ship or handle order fulfillment for you.

For example, a print on demand service can supply customized products for you without requiring you to pay up-front costs for production, inventory, or shipping. You supply your POD service with digital designs created by you or submitted by your customers. Your provider prints the designs on products, handling production and order fulfillment. This eliminates your production and shipping labor, and costs come out of your sales, so you don't pay anything upfront.

You can sell products in many different categories using a POD service. For example, Gelato lets you print customized products across the following categories:

3. Set up an Etsy shop

Set up an Etsy shoppng

Once you know what you'll be selling, you can start setting up an Etsy shop. Etsy is designed to make it easy for you to set up a store with minimal technical skills. The basic steps are simple:

  • Create an Etsy account: You can sign up on Etsy's site or by downloading the Etsy app. You'll need to answer some basic questions about your business experiences, preferences on receiving resources about selling-related topics, language, country, and currency.

  • Create a memorable, relevant shop name: At the end of the sign-up process, you'll be asked to choose a name for your shop. Your name should be easy to remember and should reflect what you offer customers.

  • Design a professional logo and banner: Your logo and banner are two of your most visible design elements on Etsy. You should design them to reflect your brand identity and what you sell. You can design your logo and banner by using design software or hiring a professional designer.

  • Set up your shop policies: You'll need to specify your shop policies for handling returns, exchanges, and cancellations.

  • Integrate your POD service with your Etsy shop: If you're using a print on demand service, you'll need to connect it to your Etsy shop. With Gelato, you can connect your Etsy and Gelato accounts through the Gelato app.

  • Add products to your store: You can add listings to your Etsy store using the Shop Manager feature. After creating a listing, you'll be asked to add information about the item, including photos, listing details, and descriptions. You can save listings as drafts before publishing them.

  • Add high-quality product photos and videos: Etsy sales depend heavily on the visual impression your products make, so it's critical to use high-quality graphics. You can upload both photos and videos. You can add multiple photos to show your products from different angles. You also can choose thumbnail images. Choose visuals that illustrate the outstanding features, benefits, and uses of your products.

  • Add details and descriptions: For each listing you create, you can add detail about product categories, descriptions of products, inventory numbers, pricing, shipping, and advertising preferences. Your product descriptions are vital for persuading customers to buy your products. Write detailed descriptions with relevant information about the product's features, such as size and materials, as well as its benefits. For each listing, you can also add up to 13 tags, which are words or phrases describing your item as it will appear in Etsy searches.

  • Optimize your listing: Before publishing your listing drafts, check that you've optimized your keywords to match those uncovered during your niche research. You can include keywords in your titles, descriptions, and tags to improve visibility.

Following these basics will enable you to start listing items on Etsy. You can improve the visual appeal of your shop by using Etsy's premium advanced features. Etsy Plus lets you add advanced banner customization options, such as carousel and collage banners, advanced image and layout options, and featured items. Etsy's Pattern service lets you build a website synced with your shop.

4. Promote your Etsy business

Once your Etsy shop is ready for business, it's time to start promoting it. You can use a variety of tools to promote your Etsy store:

  • Optimizing your Etsy listing titles, descriptions, and tags

  • Adding a Pattern site or another external site so you can use marketing tools such as blogging and email marketing

  • Posting blogs to direct SEO traffic to your site and shop

  • Building an email list so you can promote products to subscribers and gather feedback

  • Offering free giveaways to promote your email list

  • Using social media to promote your business and products, share organic posts, and run paid ads

  • Using Etsy's advertising services and marketing tools, including ads, sales, coupons, and promoted listings

  • Collaborating with influencers in your niche

You can use these tools in combinations. For example, you can use your email list or social media profile to share blog posts.

5. Optimize your Etsy store

Monitor and optimize your Etsy store

As you start getting traffic to your store and making sales, you can take additional steps to optimize your results. Etsy provides analytics tools you can use to monitor sales data, spot trends, and assess areas for improvement.

Etsy Stats lets you see key metrics such as your store's visits, orders, conversion rate, and revenue. You can use this to analyze which of your pages are drawing the most traffic and creating the most sales. This can help you promote high-performing pages and test improvements to your listing descriptions. Test different pricing strategies, discounts, and promotions to see what draws the best response.

Etsy Search Analytics provides additional data about how shoppers find your store on Etsy. You can see what traffic is driving your sales, what keywords brought visitors to your page, and other important information.

Customer reviews and feedback provide another resource to optimize your site. Use your website, email list, and social media profiles to collect data from customers. Make adjustments based on the responses you receive.

Start selling on Etsy for a profit

Starting up on Etsy is as easy as picking a niche and products, setting up and promoting your shop, and optimizing your sales. A key to selling profitably on Etsy is choosing products that let you price your sales high enough to offset Etsy fees and other business expenses.

Gelato helps you sell profitably on Etsy by providing you with customized print on demand products you can offer for sale without handling inventory or shipping. You can print your own designs or designs submitted by your customers on products such as t-shirts, hoodies, sweatshirts, mugs, smartphone cases, posters, photo albums, calendars, stationery, and cards. 

Gelato handles production and order fulfillment, taking this labor and expense off your hands. Gelato relies on the world's largest network of POD partners, with suppliers in 32 countries, to cut carbon emissions. Gelato's platform integrates with Etsy to make it easy for you to start selling. Sign up for Gelato's print on demand services today to start selling profitable, high-quality, custom products on Etsy.


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