Among the innumerable retail outlets on the Internet, Etsy has long been the go-to marketplace for finding quirky, creative, and beautiful handmade and vintage items. On April 16, 2015 Etsy made its initial public offering, raising $267 million in funding, and in doing so paved the way for more customers, more sellers, and more opportunities for would-be entrepreneurs to turn their creations into cash.
Based in Brooklyn, New York, Etsy has carved out a comfortable niche on the Internet. With nearly 20 million active buyers and more than one million sellers scattered all over the world, the site boasts about $2 billion in gross annual sales. That’s a lot of money exchanging hands, and a lot of people selling their creations. While most Etsy sellers may not make enough through the site to quit their day jobs, many do. For the rest, the site is an excellent way to supplement their income by doing something they love.
I opened my own Etsy store in 2012, but quickly forgot about it after the single painting I listed drew only the sound of chirping crickets in response. Though my foray into the art world was soon forgotten, in 2014 I decided that my vintage typewriter collection had become a little too large and I turned to Etsy for help. I took a second look at my store and researched the market. After updating my policies, I changed the store name to MahoganyRhino and set about selling my typewriters. Since then I’ve been averaging one or two sales per week.
Though my store is certainly not the busiest on the site, I’ve learned a lot about what makes for an effective Etsy venture, and what you have to do to make your shop profitable. If you make handmade goods, have thought about starting a home-based business, or have an urge to nurture your inner entrepreneurial spirit, Etsy might be the ideal outlet for you.
What You Can Sell on Etsy
All sellers have their own Etsy “shop,” which allows them to list as many items for sale as they wish. Each item has its own page, or listing, that includes photos and a description of the product. Unlike some other online retail outlets, such as Amazon.com and eBay, Etsy places significant limits on what shop owners can sell.
Etsy limits its sellers to a relatively small range of items, though that range is broad enough to appeal to millions of users. Shop owners who offer prohibited items risk removal of their listings or having their Etsy shops closed.
Here is what Etsy allows people to sell:
- Handmade Items. Etsy shop owners are allowed to sell handmade goods such as jewelry, fine art, clothing, leather goods, and similar products. As long as your item begins with your “imagination and creativity,” you can sell it on Etsy. Note, the handmade requirement doesn’t mean that you must personally make every part of your product. You can incorporate elements that are not handmade and can have help from others. In fact, you can even have your items manufactured by others.
- Craft Supplies. If you make or sell the raw materials that people need to make their creations, you can also sell those on Etsy. You cannot sell commercially produced items that are “ready for use,” but you can sell ingredients, materials, or tools that someone needs to make a finished product. For example, you can sell tools that bookbinders might use to craft handmade books, but you cannot sell mass-produced paperback books that have been made by a publisher unless the books qualify as “vintage.”
- Vintage Goods. Etsy allows you to sell manufactured or ready-to-use items, but only if those items are vintage. Etsy defines a vintage item as anything that is 20 or more years old. Vintage items can include almost anything, such as clothing, office supply products, and computer games. Vintage items do not have to be handmade, nor do they have to be functional, but they must be at least 20 years old at the time the seller lists them.
Legal & Financial Issues of Setting Up an Etsy Shop
Anyone can set up an Etsy shop for free. However, while the idea of starting a business is an exciting prospect, would-be entrepreneurs should temper that excitement a bit by taking the time to learn certain legal and financial realities.
Please note that the legal and financial details can be numerous and complicated – and any overview of legal topics you read on the Internet should never replace the advice and guidance experts can provide. While Etsy sellers are unlikely to form anything beyond a basic sole proprietorship or partnership, it’s in your best interest to educate yourself about the full landscape of options.
Etsy Business Tax Breaks
If you hope to make money with your Etsy shop, you need to understand all potential tax implications. When you have a business, there’s a big difference between income and profit. Understanding what you are and are not responsible for paying in income tax is essential if you want your venture to be successful.
The IRS, as well as state governments, afford significant tax breaks to business owners. This, along with credits and other incentives, is one of the most important things business owners have to grasp. Doing so can make a huge difference in your profits.
For example, if you start a business that sells handmade wood crafts, you can deduct the cost of the tools and materials from your yearly tax return. You also get a tax break if you take a trip or class to learn more about your craft, buy a computer to set up and run your Etsy shop, drive to the local hardware store for supplies, use a portion of your home as a dedicated business workspace, and more. Talking to a tax professional, small business expert, or even a friend who has a small business can help clear up a lot of tax questions.
Is It a Hobby or a Business?
In order to get all those small business tax breaks, you have to convince the IRS that you’re an actual business, and not just a person indulging a hobby. What’s the difference? There is no black and white dividing line, but there are several factors the IRS considers when making its determination.
- Pursuit of Profit. Are you putting in time and effort to make your business profitable, or are you pursuing your passion without regard to cost simply because you enjoy doing it? If you are pursuing a profit, and have been in business for at least five years, can you show that you were profitable for at least three of those years?
- Dependence on Income. Do you rely on the money you make from your efforts, or are you just using it as disposable income?
- Startup Expenses. If you’re showing a yearly loss instead of a profit, was it because you incurred expenses in the start-up phase? If not, was your loss due to factors outside of your control, or because you weren’t paying attention to the cost of pursuing your hobby?
- Making Improvements. Have you altered your selling strategies, manufacturing processes, or other facets of your business to try to make it profitable or increase sales?
- Seeking Expert Advice. Have you talked to experts about your business, or sought counsel from people who have knowledge of the marketplace, marketing strategies, legal requirements, or other issues that affect your business?
- Experience. Do you have any experience in your field or have you owned a business in the past? If so, are you taking the same kinds of steps with your new venture that you did with your previous businesses?
- Appreciating Business Assets. If your business is not profitable now, will your business assets appreciate in the future enough to turn a profit?
Fortunately, you don’t need to meet all, or even most, of the above factors to qualify as a business for tax purposes. However, you do have to keep quality records.
Before you open an Etsy shop or make your first product, get into the habit of documentation. Keeping track of what you do as you work is one of the best ways to show the IRS you’re serious.
At first you might not know what to keep track of and what to ignore, so keeping detailed records of everything is the safest bet. A simple accordion folder is a great way to keep all business-related receipts in one place. Otherwise, scan them into your computer. What’s important is that you get into the habit of recording your business expenses both for tax purposes and financial reasons.
- Office Supplies. Keep any receipts from office supply purchases. You can deduct the cost of pens, papers, printer ink, and any other office materials you buy for your business.
- Computers and Software. You can deduct the cost of software you purchase specifically for your business, or the cost of new hardware – such as a laptop or tablet computer – necessary to manage your Etsy store or business.
- Mileage and Travel Records. If you travel for business purposes, keep records of all expenses associated with those trips. If you do not have a business-specific vehicle, keep a logbook in your personal vehicle to write down when you make business trips, how much you spend on gas, and how far you go. If you take longer trips, keep receipts for airfare, hotel stays, meals, gas, cab fare, and any other expenses.
- Shipping. Keep track of all shipping costs. If you purchase postage online, make sure to print out a report or receipt. You should also keep receipts for any boxes, scales, packing materials, tape, or other supplies you purchase to ship your goods.
- Etsy Fees. Every Etsy listing costs you money, and Etsy charges a fee once you make a sale. Keep track of those, preferably on a spreadsheet or accounting software.
- Website Costs. If you set up a website outside of Etsy, keep records for any related expenses, such as hosting fees, design fees, and other costs.
- Gifts. Keep receipts for any gifts you provide to business associates, advisors, or anyone else who aids your business operation.
- Rent and Storage. You can deduct storage fees or rents you pay for maintaining your business.
- Home Office. If you don’t have a business space outside your home, calculate how much space you devote to it within your home. You can deduct a percentage from any home-related costs, such as utilities or rent.
- Trade and Professional Publications. If you subscribe to trade magazines or belong to any industry-specific organizations or groups, you can deduct the associated costs.
- Insurance Premiums. Keep records of your health insurance premium payments. As a small business owner who pays for your own insurance, you receive a tax deduction for them.
When you set about starting a business, you need to show you’re serious and that you take your business seriously. Keep track, stay organized, and treat your Etsy store the same way you would treat a brick-and-mortar retail outlet.
Keeping track of your costs, income, expenses, time, mileage, and other day-to-day financial details of your Etsy micro-business probably seems like the last thing you want to do. A lot of people who create handcrafted items or want to sell vintage goods don’t dream of accounting, but attention to the financial details is essential if you want to make a profit.
- Spreadsheet. The simplest way to track your finances, inventory, and everything else connected to your business is to use a simple spreadsheet. If you don’t have the software on your computer, Apache Open Office is available for free and contains all the tools you need.
- Separate Financial Accounts. Purely from an accounting perspective, having a separate bank account for your business – or even procuring a small business credit card – can be a lifesaver. Dedicated accounts not only give you a way to keep your personal and business financial details separate, but also add credibility to you as a small business owner.
- Accounting Software. There are several options for accounting software available if you want to move beyond a simple spreadsheet to keep track your accounting details. Accounting software can allow you to keep track of your finances at every stage, and can be a great help when it comes time to file taxes.
- Accountants. As your business grows and changes, you may need to hire an accountant or bookkeeper or update your practices. This is especially true if you hire employees, have a lot of sales or expenses, or feel overwhelmed by the financial details. Accountants can also be invaluable when tax time rolls around.
Legal Business Structures
Legally speaking, you and your business are separate entities, though the distance between the two differs significantly depending on the kind of business structure you have. There are several types of legally recognized business forms, each of which has benefits and drawbacks:
- Sole Proprietorship. A sole proprietorship is one of two default business structures, and the one that Etsy sellers are most likely to use – even if they’re not aware of it. Unless you take specific steps, your business is automatically considered a sole proprietorship as soon as you begin operations. Sole proprietorships allow you to take most of the tax breaks afforded to small businesses, but you and your business are treated as the same thing if anyone ever sues you – your business and personal assets can be used to satisfy a judgment.
- Partnership. If you and someone else decide to start a venture together, your business is a partnership by default. Like a sole proprietorship, you can still avail yourself of the tax benefits afforded to businesses, but your personal assets are not shielded from any lawsuit that someone might file against the business or any of its partners.
- Corporation. A corporation is a business structure that provides significant tax and liability protections, but one that also requires a lot of effort to form. If someone sues the corporation, its owners or employees are typically, though not always, protected from the lawsuit. Forming a corporation requires you to file specific documents with your state, pay a fee, and perform certain tasks every year.
- Limited Liability Company. Also known as an LLC, the limited liability company is a kind of hybrid between the corporation and the sole proprietorship or partnership. An LLC allows you to shield your personal assets from lawsuits filed against the business, but is also much easier to form and manage when compared to a corporation. As with a corporation, forming an LLC requires you to pay a fee, file specific documentation with the appropriate state business agency or department, and perform yearly duties to keep your status. However, the effort needed to form and maintain an LLC are not nearly as stringent as that required for a corporation.
The safest course of action you can take to protect yourself and your operation is to talk to an experienced attorney in your area, even though you are not legally required to do so before you start a business. Because state business laws differ – sometimes significantly – it’s essential that you know what your state requires and allows.
State & Local Business Requirements
Depending on where you live, you may need to address a number of legal issues to make sure you start your business on the right foot. In addition to choosing the proper business structure, you have to be aware of any requirements or restrictions your state or local governments impose on small businesses and their owners.
- Business Licenses. Your state and/or your local county or municipal government might require you to obtain a business license or permit – even if all you’re doing is setting up an Etsy shop. State and local business requirements differ significantly, but the process of obtaining appropriate licenses is usually as simple as filing a form and paying a small registration fee. The U.S. Small Business Administration (SBA) maintains a state-by-state list of licensing requirements. However, you might also want to contact your local or state government office, area chamber of commerce, or a nearby attorney to make sure you have all your bases covered.
- Zoning Issues. A lot of Etsy businesses do not have to worry about zoning or property use ordinances, but there are some local restrictions that could prove to be problematic. Cities usually impose limits on what kinds of businesses people can operate in residential areas. For example, if you are making your products at home, do not have employees, and are not producing a lot of noise or noxious chemicals, you probably won’t run into issues with your neighbors or local zoning enforcement officers. On the other hand, if you have employees who park on your neighborhood street, you receive multiple deliveries from commercial vehicles each day, or you change the physical properties of your home to accommodate your business, you could very well run into trouble with local zoning requirements. If your city’s ordinances are not posted online, you may have to visit your local city hall or county courthouse to find them. Again, talking to an expert or an attorney experienced with small business matters is always a good idea.
Setting Up Shop
Once your legal and financial foundation is established, you can set up your Etsy shop and start selling. Here are the steps you must take:
- Register With Etsy. Visit the Etsy homepage and click on “Register” in the upper right-hand side. Input your name and email address, then choose a username and password. Since you’re setting up a store, it’s best to choose a username that includes keywords relevant to what you plan on selling.
- Confirm Registration. Once you’ve signed up, Etsy sends you a confirmation email. Click on the registration button.
- Open a Shop. When you’re logged into your Etsy account, scroll to the bottom of the page and click on the “Open a Shop” button in the lower left-hand corner. You’ll be redirected to a screen telling you what you can and cannot sell on Etsy, and then be asked if you want to use English as your shop’s language and use the U.S. dollar as your currency. When asked why you want to open an Etsy store, simply click the answer that best applies to you.
- Choose a Shop Name. You must choose a shop name before you can begin selling. This can only be 20 characters long, and cannot contain any spaces or characters that are not letters or numbers. Choosing a name is surprisingly important for search engine purposes, and it pays to have an understanding of the relevance of keywords and search engine optimization before you decide. If you have already chosen a name, Etsy allows you to change it one time.
Search Engine Optimization Basics
When people go on the Internet to find something, they use search engines, such as Google. These engines look at everything on the Internet to determine if it is relevant to the searcher’s query. Search engine optimization, or SEO, is the process of maximizing a website’s likelihood of appearing high in search engine results.
- Keywords. One of the most important things that search engines look for are keywords. A keyword is any word, phrase, or sentence that folks use when searching the Internet. For example, if you wanted to find a vintage lampshade, you might search for “vintage lamp shade,” “old lamp shade,” “vintage lamp accessories,” or similar terms related to your subject. These are keywords.
- Keyword Research. You need to keep keywords in mind when you choose your Etsy username or shop name. What do you plan to sell? What do you think your customers are looking for? What kind of products will you include in your listings? Search for the words that come into your mind when you ask yourself this question. Look on Etsy stores that sell similar products and see which keywords they are using in their titles, shop names, and listings. This can give you an idea of the keywords you need to use. Google AdWords Keyword Planner is invaluable when researching relevant terms.
- Applying Keywords to Your Store. If you want to sell old lamps, for example, you might choose a username like “LampSeller21,” or a store name like “VintageLampsbyLana.” Similarly, once you start making listings, keep your preferred keywords close by and use them in your item titles, descriptions, and tags.
When you log into Etsy and visit the “Your Shop” menu, you can access a range of options under the “Shop Settings” tab.
Info and Appearances
This section allows you to control several important aspects of your shop:
- Shop Name. Use this section to change your shop’s name. You can change this once, but if you want to do it again after that, you have to contact Etsy at email@example.com and receive approval. If you chose a shop name before researching SEO, changing it to include keywords is often a good strategy.
- Shop Title. A shop title is a brief description of your store and what you sell. The title should let customers know what your store does, sells, or provides. Again, using keywords here is essential.
- Links. You can link to your Facebook page, Twitter feed, or other social media outlets here.
- Shop Announcement. This section allows you to include details about your store, listings, or anything else your buyers might want to know when visiting your shop.
- Message to Buyers. When someone makes a purchase, they automatically receive the text you include in this section.
- Message to Digital Buyers. If you sell digital items, those customers receive this message immediately following a purchase.
This area allows you to create policies that apply to your items or sales.
- Welcome Message. Use this area to greet your customers. Include keywords and details about yourself that might help people get a better idea of who you are and why your store exists.
- Shipping Policy. Explain how you ship, where you ship to, and other details to give customers a better idea of when and how they might expect to receive their purchases.
- Refund Policy. Detail what you will and won’t do for customers who want a refund.
- Additional Information. Use this section to explain policies or rules that don’t fit in the other sections.
- Seller Information. Identify your location, contact information, and anything else customers may want to know about your shop.
- Private Receipt Info. If you need specific information from a customer, use this section to explain that. This information is only sent to buyers once they’ve made a purchase.
About Your Shop
The “About Your Shop” tab is also accessible from the “Your Shop” menu, and allows you to access the “Members,” “Story,” and “Manufacturers” sections.
- Members. Who works in your store? Use this section to link to your Etsy user’s profile, as well as the profile of any other Etsian who is connected to your shop.
- Story. Why did you start your store? What drew you to Etsy? What do you love about what you make or sell? This section gives your customers the chance to get to know you a little better. You can also link to your Facebook, blog, or non-Etsy website through this section.
- Manufacturers. Do you use outside manufacturers to make your products? If so, list them here and explain what they do for you.
Listing Your Items
Once you open your shop, the next step is to list your items. When you add a listing, you’re asked to fill out several areas and include one or more photos.
- Title. Just like you did with your store name, you want to make sure your listing title includes relevant keywords. Describe your item in terms customers would use to look for your products, but also in terms that accurately describe what you’re selling. Titles can be up to 70 characters long.
- About This Listing. In this section you have to choose between several options about who made your item, what it is, and when it was made.
- Category. Etsy allows shoppers to categorize products: “Bath and Beauty,” “Clothing,” or “Weddings,” for example. Choose the category – and subcategory – that best fits the item you’re listing.
- Price. Choose a price for your item.
- Quantity. How many are you selling?
- Type. You can sell digital files or physical items. Choose the most appropriate option.
- Description. Describe your item in terms your customers can understand. For example, if you crochet hats, describe the material you use, the size of the hat, and its colors.
- Variations. If you make multiple items with many varieties, such as different colored handmade candle holders, you can list those variations here. However, it may be worth listing each item individually, as the number of items in your store directly affects the number of views your item gets.
- Shipping. This section allows you to choose your shipping options. You can select where your item originates, where you’re willing to ship it, how long it will take, and how much it will cost.
- Search Terms: Materials. This section allows you to include search terms to help customers find your listings. You can include 13 different terms, each of which must be no more than 20 characters in length. In the “Materials” section, list the ingredients or components used in your product, such as iron, wood, silk, enamel paint, or batteries. You don’t need to use all 13 available terms in the materials section – just use as many as are appropriate.
- Search Terms: Tags. For the “Tags” section, use all 13 available terms. Choose keywords you think are relevant to your item, and try to be as specific as possible. For example, if you sell gifts for bridesmaids and groomsmen, don’t use only “gifts” or “presents,” as these are too broad. Instead, choose keywords or phrases such as “groomsmen gifts” or “bridesmaids presents.”
- Preview Listing. Once you’ve filled out all required sections, you can then click “Preview Listing.” This shows you what the listing will look like when you post it. If you’re satisfied with it, you can choose to list it immediately. If not, you can make whatever edits you like. You can also make edits once you’ve listed an item, so don’t worry if you missed anything.
Fees and Costs
Etsy does not charge a fee to open a store, but there are fees when you list an item and when you sell one. Etsy charges a flat fee of $0.20 for each item you list. If you make a sale, Etsy takes a 3.5% fee. There are other charges you can incur, such as currency conversion, wholesale fees, and advertising fees.
Selling Your Items
Listing your items on Etsy is not the same as selling them. As in any business endeavor, you have to convince customers to buy them. Since you can’t talk to them face to face and they can’t inspect your wares in person, the only way to achieve this is to make your listings and your shop as appealing as possible.
When people search for items through Etsy, they see a results page with photos of any items relevant to their query. That main photo of yours is the first chance you have to show would-be customers what you are selling, and it needs to be as good as possible.
Whenever you create a listing, you can include up to five photos. Apart from appearing on search results, your first photo of an item also appears in your shop’s list of items for sale.
Including photos in your listings that accurately represent your products is essential. You don’t need to have a professional camera or any training in photography to take a quality photo. It doesn’t hurt to practice though, or to know a few basics.
- Camera. At the very least, get a phone with a good camera or a decent digital point-and-shoot. Many Etsy sellers use the cameras on their smartphones or tablet computers, while others purchase digital SLR cameras specifically for their Etsy stores.
- Light. Take photos when there is a lot of light, preferably natural light. If you’re selling smaller items, consider using a light box with a basic lighting kit. You can also use a light box with larger items – just make sure it’s large enough.
- Backgrounds. Use a simple background at first. White backgrounds are common, but you can use almost anything. As you gain more experience you can experiment with different backgrounds to see which best show off your items. For example, someone selling clothes might use models to show off their designs, while someone selling vintage items could stage those products to give buyers a sense of how they might look in a home.
- Take Five. Etsy allows you to include five photos per item, so you should plan to take at least this many. Taking more is usually a good idea though, as you can go through them and choose the five best to include in your listing.
- Photo Editing. Powerful photo editing software, such as the freely distributed GIMP, is readily available and can help you manipulate photos in almost any way imaginable. While you might be tempted to make your photos as eye-catching as possible, you shouldn’t edit them to the point where buyers are left with a false impression.
- Additional Photos. Etsy does not allow sellers to include additional photos in their listings, nor does it allow links to outside websites. However, if you want to take more photos (or even videos) of your product, you can include the address of the website where you host those photos. Customers can then cut and paste that address into a browser. For example, if you want to have 20 photos of your item, you can host them all for free on a site like Imgur and include the address in your description.
Apart from photos, the product description is your only opportunity to inform potential customers about what you’re selling. Being as descriptive as possible while also conveying information concisely is often a fine line to walk, but there are some simple steps you can take to make your descriptions stand out.
- Don’t Bury the Lead. Begin your description by telling the customer about the most important features of your item. The description should start with any essential, need-to-know details. For example, if you’re selling vintage boots, start with a description of the boot, its condition, color, size, make, and age. If you leave this information out, or wait until the end of your description before you include it (burying the lead), you’re only going to confuse potential customers.
- Expand on the Essentials. Once you’ve provided basic information, expand on it. Describe your product using details an interested buyer would want to know, such as how you made it, where you found it, and so on.
- Use Keywords. Those keywords you used in your title, shop name, and item listing should reappear in your description. Try to use as many of the keywords as possible, but do so naturally and in a way that doesn’t make it feel like you’re just inserting them for SEO purposes. You can make your listing more search friendly by first identifying the one or two keywords or keyword phrases most related to your product and repeating them three or four times, or about once per every 200 words in your description. After that, go back and insert the less important keywords where appropriate.
- Personalize. Etsy, perhaps more than almost any other online sales outlet, allows you to create a relationship with your customers. After all, you’re selling something you’ve made by hand or something you feel passionate about. Allow your customers to feel that passion too. Describe how you found or made your product, what you love about it, and what you think your customers might like about it.
- Be Swift. People don’t like to read big chunks of text on the Internet, so break your description up into smaller, quickly read portions. Use separate sections, bullet points, or headers to draw attention to specific information.
- Be Open. Always inform your customers that you’re available to answer questions. In my store, I’ve responded to dozens of questions from people who have never had a typewriter, want to know what to look for, are looking for something specific, have questions about shipping, and more. Responding quickly lets them know you care, and helps them feel more comfortable buying something from someone they’re never likely to meet in person.
- Edit. Everyone makes mistakes, but you definitely want your listings to be as mistake-free as possible. Always go back and edit your descriptions once you’re done. Better yet, having someone else look over what you’ve written can reveal a lot of typos and errors you didn’t catch.
- Links. You can include links to other Etsy pages in each of your Etsy listings. Customers who don’t want this particular item might be interested in others in your store, or they may want to know more about your shop. Using links is also a good way to boost your SEO profile.
- Review Stats and Edit Again. Etsy keeps track of your shop’s statistics. You can view these stats through the “Your Shop” icon on your Etsy page. Once there, click “Quick Links,” then “Stats.” In addition to seeing the views, favorites, and sales figures, a table shows you what keywords brought people to your shop. Once you’ve been open a month or so, check these stats. If you identify good or unexpected keywords, go back and change your listings to include these. If some simply aren’t producing results, eliminate them and try new ones.
Deciding on prices for your Etsy items can take time, as you’ve got to weigh several factors before you come to a number. You don’t have to balance all these factors immediately, and you can change prices later, but knowing what to look at is an important part of the process.
- Time. How long did it take you to make a handmade item, or to find, clean, and restore a vintage item? Your time is valuable, and if you don’t take it into account when setting your prices, you’re doing yourself a disservice. For example, if you sell an item for $100, but it took you 20 hours to make (and no other costs were involved), you’re only earning $5 per hour. On the other hand, if you spend an hour to make an item and you can sell it for $100, your time is probably well spent.
- Costs. Apart from the time it took you to make an item, how much did it cost you to produce or buy it? How much were the raw materials? Did you have to buy special tools? Did you pay shipping costs or have to drive and pay for gas? You have to know what it costs to make your items before you determine a price.
- Competition. Are other stores selling the same items as you? What are their prices? Are there differences between their products and yours? Do those differences make your item more or less valuable than those offered by the competition?
- Prior Sales. Have similar items sold on Etsy before? Are buyers interested in your product? Searching shops that sell similar products and browsing their current prices (as well as clicking on “sales” on their stores), can help you gauge the market.
- Prior Sales Prices. When researching prior sales, Etsy does not allow you to see the price the item sold for. However, there are a couple of ways around this. First, if the shop is currently listing an identical item, the prior item likely sold for a similar price. Second, you can see how much it actually sold for by clicking on the sold item’s listing page and viewing the page’s source code. Once you’re looking at the code, search for the term “price” and you should find a line of code giving you the answer. If you’re not sure how to search a page’s source code, search online for instructions on how to do it in your specific browser.
- Price Psychology. A lot goes on in a consumer’s mind when looking at the price of an item for sale. For example, selling something for $9.99 draws in more buyers than selling it for $10, even though the two prices are essentially identical. Keeping basic price psychology in mind is always better than pulling a number out of a hat.
Etsy is a platform that allows you to create a personal relationship with your customers – as much as possible over the Internet, at least. After all, you are crafting handmade items or selling carefully discovered vintage products and selling them to people who probably want something that’s not mass-produced and rolled off an assembly line.
Many of your customers want to know who you are, what you do, how you do it, and why. They want to feel like they know you, and they want to be assured that your products deliver what your listings promise. Committing yourself to strong customer service can go a long way toward building a personal relationship between you and your patrons.
- Get the Etsy Seller’s App. Etsy has several apps available for smartphone users. The Etsy Seller’s App allows you to manage your listings through your phone and receive notifications as soon as something important happens with your shop – for example, when you receive new feedback, an item sells, or someone asks you a question.
- Be Accommodating. If a seller has a specific need or wants something you don’t really offer, try to be as accommodating as possible. For example, I typically ship a typewriter within three business days of receiving an order. However, some customers have wanted their machines more quickly than that. I always try to accommodate their wishes, even if it means doing a little more work than expected.
- Promise 5, Deliver 10. Are you a full-time parent or working two jobs in addition to building your Etsy store? Be realistic, or even a little pessimistic, when you tell customers what you can provide. It’s generally better to give the customer somewhat lower expectations and then exceed them, leading to pleasant surprise as opposed to aggravation and disappointment.
- Respond to All Questions Quickly and Professionally. Customers want to know there’s a real person behind the impersonal web page they’re looking at, and the best way to convey this is to respond to all questions you receive as quickly as possible. I’ve had customers contact me about anything from choosing the right typewriter for their child, to finding a new ribbon for a specific machine, to sending an item with expedited shipping. The Seller’s App notified me immediately and I was able to respond right away.
- Feedback Management. Etsy allows buyers to leave feedback. Positive feedback allows potential customers to feel more confident about your store, while negative feedback can be devastating to your sales figures. Knowing how to respond to any negative feedback can make a big difference in your store’s reputation and long-term success. Buyers are able to adjust their feedback, so if you receive a negative review, the best option is to send a message to the buyer and try to resolve the situation amicably. For example, offering a refund or replacement product, even if your store policies state otherwise, might be a good option. If you cannot resolve the problem or the buyer won’t adjust the feedback score, you have the option to respond to the negative feedback. Once you submit your response, you cannot edit it later, though you can go back and delete it. Always respond to negative feedback professionally, and never, ever insult the buyer. Talk about what you did, the product you sold, and how you tried to please the customer after learning about the problem. You can’t satisfy everyone, but you can let potential customers know you are someone they can trust.
Growing Your Store
Once you’ve listed your first several items, perhaps made a sale or two, and have become comfortable with how Etsy works, it’s time to start thinking about growing your store. For an Etsy store, “growth” means getting more people to view your items and “favorite” your store or listings. And, of course, it means making more sales. Learning how to spot and manage growth is essential if you want bigger profits.
- Views. Etsy allows you to see how many people are looking at your items. Under the “Your Shop” tab, select “Stats” to see how many views you’re getting. You can look at these over a daily or weekly period, or longer. As time goes on, your daily views should increase, though they’re likely to fluctuate greatly.
- Favorites. When people “favorite” an item, it appears on their user profile under the “Items I Love” section, allowing those who view their profiles to see them. When people favorite your shop, your shop appears on their “Favorite Shops” list. Those people also receive a notification whenever you add a new listing to your store.
- Popularity. In general, views and favorites are a good indicator of how many people are looking at your goods, as well as how popular your store is. Slowly increasing views and favorites over time is a general indicator that your store is becoming more popular, or that more people are looking for the items you’re selling. If your store starts losing views or favorites, this can indicate dwindling interest, or may be evidence that people cannot easily find your shop or your items.
- Listing Number. I can report, both anecdotally and from the Etsy Seller Handbook, that the number of items you list on your store is strongly correlated to the number of views – and sales – you receive. Following the Christmas season of 2014, I was down to about three or four items in my shop, after starting the Thanksgiving weekend with more than 20. When my shop only had a small number of listings, the average daily views hovered around 20, with about one or two favorites per day. Then, by March 2015, I had refilled my store with close to about 30 typewriters, and by the end of that month I was averaging over 120 views and six or seven favorites per day. In short, the more items you have in your store, the more people look at your products.
- Marketing Plans. Along with SEO, a good marketing plan can significantly boost your views, favorites, and sales. A lot can go into a marketing plan, but setting a budget and starting with a general idea of what you want to accomplish are essential. For example, Etsy allows shop owners to pay for ads through the site with its “Promoted Listings” option. You can determine how much you want to spend on your ad campaign, choose your targeted keywords, manage the campaign, and monitor the results.
- Growth. With growth comes opportunity, and you shouldn’t be afraid to grow beyond your current Etsy store. Branching out into new products, expanding your Etsy presence by opening a second shop, and exploring other online outlets are all possibilities. Outside of the Internet, more traditional sales options are also available. For example, if you sell handmade goods you might try to sell through local fairs or events.
An Etsy shop can be a great outlet for creative people who want to sell things they love to make. Your store can allow you to supplement your income, work from home, turn a hobby into a full-time job, and venture into a low-risk entrepreneurial opportunity.
But as with any other business, starting a successful Etsy store takes research, work, and maybe a little luck. If you learn what it takes to get your shop off the ground, devote yourself to improving its performance, and provide your customers with a quality product they want, there’s no reason you can’t be a success.
What’s stopping you from opening your Etsy shop? What are hopes, fears, questions, or concerns?