If you’re an e-commerce merchant looking to expand your business, Etsy is a great place to start. An online marketplace that was started in the USA in 2005, it quickly expanded around the world. Let’s take a look at how to sell on Etsy successfully if you’re a seller of handmade items, vintage pieces or craft supplies.
What to sell on Etsy?
In 2019, a total of 45.7 million people made a purchase on Etsy globally, and as of Q2 in 2020, there were 60.27 million buyers on the platform. The company generated $818.79 million in 2019, which was up from $603.69 million in the previous year. Given that the majority of sellers on Etsy are independent retailers and small businesses, this offers a huge opportunity for merchants looking to expand their online offering and reach a new audience.
Etsy sellers have been particularly successful during the Covid-19 pandemic when many people who might usually shop at bricks-and-mortar stores have had to turn to online shopping. Shares in Etsy more than quadrupled in 2020, as many customers returned to the site time and time again. In fact, many Etsy shoppers are repeat customers – in 2018, more than 40% of customers bought something from Etsy on more than one occasion.
Etsy sellers specialise in unique products, particularly crafty items, handmade and vintage pieces. There are three main sections on Etsy: handmade, which represents 85% of sellers, vintage, which represents 6% of sellers, and supplies, with 12% of sellers.
The most popular product categories within the handmade section are:
- Home & Living
- Art & Collectibles
- Bath & Beauty
First steps to start selling on Etsy
Ready to sell on Etsy? It’s easy to get started!
Open your Etsy shop
If you’ve never used Etsy before, the first step is to create an account. Otherwise, sign in to your existing account. Then you’re ready to open your shop. To do this, visit etsy.com and click on ‘Open your shop’. You’ll have to enter a few details such as your shop language, country and currency as well as adding a name for your shop.
Fill out your shop details
Help customers to know who you are and what you sell by filling out your profile. Consider addressing these elements of your shop:
- Shop logo
- Shop announcement or welcome message
- About section, sharing who you are and what products you sell
- Shop policies, including your stance on returns, exchanges, payments and other important factors for shoppers to consider before they make a purchase
List your products
The next, very important, step is to list your products in your shop. This involves adding photographs, giving details about the product, and pricing the product. If you offer different options, such as different colours or patterns, you can add up to two variations per option. You can also offer the option for personalisation.
Promote your products
With so many sellers on Etsy, it’s important to consider a marketing strategy to ensure your shop doesn’t get lost in the masses. Ensure you optimise your shop and product listings for searches on Etsy, and add your shop’s location so that you don’t miss out on customers who are looking to buy from local sellers.
It’s also a good idea to consider whether you want to utilise paid advertising to make your shop more visible to potential customers. Also think about offering discounts, sales and coupons to encourage users to make a purchase.
What are the requirements to sell on Etsy?
You don’t need to have a business license to sell on Etsy. You must, however, abide by any laws around selling online as a local business, which may vary between countries.
All items sold on Etsy must either be handmade, vintage, or craft supplies. All vintage items are required to be at least 20 years old.
What are the VAT rules?
Whether you need to consider VAT depends on what country you’re selling in, and what countries you’re selling your goods to.
Etsy is required to report tax information to local tax authorities in some countries, which means that if you’re located in the EU, Norway, Switzerland or the UK and your gross sales either meet or exceed the local VAT threshold in a calendar year, you must add your VAT ID and taxpayer name to your Etsy shop. Etsy will send you reminders by email if you’re getting close to this threshold, giving you time to add your information to your shop.
It’s easy to add or update your VAT ID. You can do it in your Shop Manager, under the Finances section.
How much does it cost to sell on Etsy?
There are three main fees to consider when it comes to Etsy: listing fees, transaction fees and payment processing fees. You may also need to consider advertising fees if you want to go down the route of paid advertisements.
Each item listed on Etsy costs $0.20, which must be paid whether the item is sold or not. When you list an item, the fee of $0.20 will be added to your payment account, and the amount will be automatically deducted if you sell the item through Etsy Payment. Otherwise, the amount will be added to your payment account, which is payable on the first of each month. Listings are live for four months, and if there are any listing fees to be paid for unsold items, you’ll be sent an email to let you know.
When a customer makes a purchase from your shop, Etsy collects a transaction fee. These are only applicable to items that sell, and the fee equates to 5% of the total item costs, which is automatically added to your payment account.
If you choose to use Etsy Payments, your sales will also be subject to a payment processing fee, which is a set rate plus a percentage of the total sale price of the time – these rates vary by country. Find out more here.
Marketing and promotions on Etsy
Don’t just list your products and then forget about them. With so much competition out there, you need to ensure that your shop stands out from the crowd.
The platform makes it easy to keep on top of your shop’s performance with Etsy Stats. Here you can see how your shop is performing, where traffic comes from and how shoppers are engaging with your listings. This allows you to determine whether you need to make any tweaks to your marketing strategy, change up your product offering, or make tweaks to the listings.
If there are particular products you want to promote, or if you just want to give your shop a boost, you can use Etsy Ads to advertise your products. This allows you to promote products across Etsy, including in search results. All you need to do is set a budget and decide which listings you want to advertise, and Etsy Ads will optimise your budget to ensure that your products are advertised in the right places to drive maximum traffic to your shop.
Finally, don’t forget to promote your products on other platforms such as social media. You can add your listings to Instagram and Facebook Shops, and you can even add updates to your social platforms directly from your Etsy shop either on your desktop or the Sell on Etsy app.
Shipping on Etsy
As with any other platform, shoppers on Etsy don’t like to pay shipping fees. In the US, you can add a free shipping guarantee to your shop, letting shoppers know that they won’t pay added shipping fees on orders over $35. This applies to order shopping within and to the USA.
If you set this up, you can use the smart pricing tool to ensure you don’t lose any money. It will help you to determine the best prices for your items so that you can recover shipping costs under the free shipping guarantee.
Automate your Etsy shipments with ShippyPro
With ShippyPro, you can make it easy to ship, track and organise returns for Etsy. Simply connect your Etsy and ShippyPro accounts in one click and let us help you cut down on hours of work.
You’ll be able to print your Esty shipping labels and find the best shipping options, with ShippyPro automatically comparing the shipping rates for all your Carriers to choose the most cost-effective option. It couldn’t be easier to integrate your accounts, leaving you to focus on growing your business and discovering more Etsy customers.