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A Beginner’s Guide to Selling on Etsy

11 min read

There are many ways for small businesses to sell products online. Hosting your own webstore on your company website is one option. This gives you great control over the presentation and payment features of your store. But, especially for small businesses, you might not get enough traffic to meet your goals.

For higher volume online sales, you can join a larger online marketplace to gain a wider audience and more recognition. By far the largest online marketplace is Amazon, with over 6 million sellers on the platform. But Amazon is not the only major marketplace in the ecommerce landscape. Etsy is another highly popular, but more niche, online seller. Etsy is used primarily to sell handmade or custom crafts, artwork, and decor.

Etsy is a very fast-growing marketplace, more than doubling its total number of sellers since 2019. The marketplace generated over $1 billion in revenue in 2020 alone, with over 81 million active shoppers. For small businesses that sell custom crafts and decor, Etsy is a highly attractive ecommerce marketplace. Of course, it is not for everyone. Customers don’t turn to Etsy when they need replacement auto parts, for example. But if Etsy is the right market for you, there are tremendous benefits to selling on the platform.

To help small ecommerce businesses get started, here is a helpful guide on how to sell on Etsy for beginners.

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How to Start Selling on Etsy: What You Need to Know

You may be wondering, “how do I sell on Etsy?” Selling on Etsy is a bit different than selling on Amazon or other online marketplaces. In some ways, Etsy has more requirements than other platforms, while in other ways it is looser. As for how to start selling on Etsy, the process is relatively simple. You begin by going to Etsy’s seller page and clicking the “Get started” button.

From here, you simply need to follow the prompts as they appear on your screen. Begin by registering your account, just as you would on any website. After that, you can start building your shop. Etsy will provide you with options for support which you can use as needed. You can also skip these options and dive right into building your online shop. Give your shop a name, enter your item info, and set up payment options for your shop. Don’t worry too much if your inventory is not finalized yet. You can always edit your item info later on.

Once the framework of your Etsy shop is in place, you can begin to customize your storefront page. This is a great way to personalize your shop and allow customers to see what you sell and what your company’s values are. There are many ways you can arrange your storefront to make it yours. A helpful tip is to focus on ways to maximize customer engagement once they find your page. You can follow many of the basic rules for creating an effective landing page when crafting your Etsy storefront.

Do you need a business license to sell on Etsy?

One of the most common questions people ask is, “Do you need a business license to sell on Etsy?” The answer is technically “No.” Etsy itself does not require its sellers to have a business license. However, some states, municipalities, or countries do require a business license for anyone conducting business within their borders. Etsy itself does not require a business license. However, it’s a wise idea to check the laws in your area before getting started.

What are the requirements to sell on Etsy?

Because you don’t need a business license to get started, this is considered a great perk for many sellers. A lot of people turn to Etsy initially as a side gig to sell their handmade crafts to a broad audience. This can turn their craft from a hobby into an eventual business. But early on, obtaining a business license could be a major obstacle that could deter many sellers.

With that being said, there are some requirements if you wish to become a seller on Etsy. New sellers should familiarize themselves with Etsy’s Prohibited Items Policy. For most sellers, the prohibited items list is not an issue. But it is important to understand what can and cannot be sold on the platform.

Etsy also has detailed requirements about handmade and designer items which all sellers must follow. Etsy requires that all items sold in its marketplace be handmade. But, in their own words, “handmade is a spectrum”. Some makers are actually crafting their products by hand to be sold as is. Others might design their products themselves but rely on production assistants to create the finished product. These designers are permitted to sell on Etsy provided they operate within the rules and restrictions of Etsy’s seller policy. You can read the updated Etsy Seller Policy in full here.

How much does it cost to sell on Etsy?

When it comes to selling on Etsy, fees are minimal, but still important to be aware of. Etsy does not require a startup or subscription fee. So it is technically free to become a seller on Etsy.

However, Etsy does charge fees to use the marketplace. Most importantly, Etsy charges a small listing fee for every item listed in your shop. The Etsy listing fee is $0.20 for a four-month listing, with the ability to auto-renew listings.

Selling on Etsy fees are mid-level compared to other platforms. Etsy charges a 5% transaction fee on all sales. So 5% of the price of your product goes to Etsy for each sale. For instance, a $100 craft sold on Etsy nets is $95 for you, and $5 for Etsy.

There is also a Shipping Label Fee on Etsy to cover the costs of shipping your items. This varies depending on the shipping carrier(s) you choose, and the origin and destination of shipped items.

Other miscellaneous Etsy fees include a small payment processing fee, a Value-Added Tax, and optional fees for paid ads off-site.

Ultimately, the amount it costs to sell on Etsy depends on your sales. Because the fees are based on a percentage of your total sales, you should always make a profit. Whether that’s enough for you depends on your goals and how much you make.

Is Selling on Etsy Worth It? Pros and Cons

So, after learning all that, is selling on Etsy worth it? The answer to that question depends on your business. First of all, your business needs to sell items that meet Etsy’s “handmade” requirements. As long as that is the case, there are plenty of good reasons to sell on Etsy. Here are some pros and cons to consider when deciding if you should sell on Etsy.

Pro: Very easy to get started

Once you get started, there isn’t anything complicated about how to sell stuff on Etsy from a technical standpoint. The interface is intuitive, and Etsy does a great job to make it easy to manage your storefront and list products.

Pro: Huge marketplace

Etsy is the largest online marketplace for handmade crafts and decor. If you’re looking to sell your products online, Etsy has the highest volume of traffic of interested customers. For new small businesses, attracting new customers is one of the biggest challenges. Etsy can be a great way to solve that problem early on.

Pro: No business license or history is needed

Unlike other marketplaces, Etsy does not require you to have an official business license or an established reputation. You can simply start making handmade items one day, and become an Etsy seller the next.

Pro: Highly customizable

Etsy is the best place to go to sell custom items. That spirit of customization also extends to managing your Etsy store. Users have great control over their storefront layout, what they sell, and their shipping options. Selling on Etsy is a relatively hassle-free experience.

Con: Highly competitive

The size of Etsy’s marketplace can be both a pro and a con. While the high customer traffic is great, there is also a high volume of sellers. So learning how to sell things on Etsy can be a bit trickier than simply listing your products and waiting for customers to show up. You may need to use some clever marketing tricks. You should also learn to make your product listings as appealing as possible to stand out from competitors.

Con: Listing fees can add up

If you want to list a lot of products on your Etsy store, you could end up spending money on listing fees. This means some sellers need to be selective about what items they list, at least in the beginning. As your sales grow, you may be able to add more listings to your store. But growing your inventory takes time if you want to avoid spending too much on listing fees.

Final Thoughts

Ultimately, the decision of whether or not to sell on Etsy depends on your business. If you fit the marketplace and have quality products, selling on Etsy is almost always worth it. If not, there are plenty of other ways to grow your business online.

Do you want to know more about selling on Etsy?

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About the author

Max has been working in the ecommerce industry for the last six years helping brands to establish and level-up content marketing and SEO. Despite that, he has experience with entrepreneurship. He is a fiction writer in his free time.

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