How to sell something on Etsy and be profitable

If you’re looking for a way to run an e-commerce business that’s convenient and creatively fueled, selling on Etsy might be a perfect fit. The platform offers a slew of benefits for small businesses, including:

• Instant access to millions of shoppers who are actively searching for vintage items, handmade goods, and customized products.
• Low startup and operating costs, including just $0.20 per listing and zero monthly fees for a basic shop.
• Convenient and trustworthy payment methods through Etsy Payments, including Apple Pay, Shopify, and PayPal.
• An easy-to-use platform packed with tools to simplify getting set up and managing listings, orders, and payments.
• User-friendly marketing features, including Etsy Ads, sales tracking, and SEO tools.
• Seller forums provide a place for support, advice, and community with other merchants.

Of course, there are some challenges small businesses may encounter when selling on Etsy. Here are some potential hurdles to consider:

• Tough competition: The high number of sellers and similar products can make it difficult for small businesses to stand out.
• Number of fees: Etsy charges merchants multiple fees, including product listing fees, transaction fees, payment processing fees, and optional ad placement fees.
• Site limitations: Sellers don’t have the same opportunities to brand their Etsy storefront or have their products stand out as they would by creating their own online store.
• Product quality: An increasing number of cheaply made products can make it hard for small businesses to create handmade items at the same pace and price.

First and foremost, you need to determine what you’ll be selling. Etsy has more than 18 main product categories—including Jewelry, Clothing, Art & Collectibles, Craft Supplies & Tools, and Electronics & Accessories—not to mention the various sub-categories within each.

You’ll want to explore the market for your products on Etsy to understand the level of competition, what others are charging for similar items, and how you can make sure your shop pops. For example:

• If you make your own candles, do you have a signature scent that other candle merchants can’t offer?
• If you collect vintage jewelry, are you selling high-end designer pieces or costume jewelry?
• If you create crafting supplies, such as rubber stamps, are you offering customizable or seasonal options?

Determining your shop’s category and target audience will help you strategically position your items when creating product descriptions and marketing materials.

As you get started, having a clear understanding of your start-up and operating costs is critical to your success as an Etsy marketplace seller. Here are some of the Etsy fees you’ll need to budget for:

• Set-up fee: Etsy charges most sellers a one-time, nonrefundable shop set-up fee.
• Listing fees: You’ll be charged a $0.20 listing fee for every item you list or renew on Etsy. Product listings expire after four months, meaning you’ll pay the fee every time you renew an item.
• Transaction fees: Every time you make a sale on Etsy, you’ll be charged a fee of 6.5% of the listing price plus the amount you charge for shipping.
• Advertising fees: Etsy offers multiple ways to promote your products through onsite and offsite ads, depending on your budget and how you want to attract new customers.

You’ll also need a detailed breakdown of your production costs, profit margins, sales tax, and other operating expenses.

Additionally, you should determine packaging and shipping costs and how you’ll handle customer returns. Researching different carriers will allow you to find the most cost-effective method, whether you work with the United States Postal Service (USPS) or a private company such as FedEx or UPS.

Etsy’s platform is extremely user-friendly, making it easy for beginners to set up a shop. The site walks you through a step-by-step guide, which includes picking a shop name, setting your location and other shop preferences, adding your bank account information, and creating your first product listing.

Here are a few tips for getting your shop to stand out:

• Build a brand identity, displaying your logo and brand graphics on your shop banner, product listings, and packaging materials.
• Take high-quality product photos to showcase your items in the best light.
• Earn new customers’ trust by sharing more about yourself and your products in the About section, product descriptions, and FAQs tab.
• Offer customizable products in a variety of colors and sizes to increase your shop’s uniqueness and provide customers with one-of-a-kind offerings.
• Update your seller profile seasonally, run promotional offers, and highlight popular or featured products to keep your shop fresh and interesting.

Strategically leaning into search engine optimization (SEO) will help your products rank higher in Google and Etsy search results, therefore increasing the number of potential customers who see your goods. This includes:

• Using tools like RankHero to create product listing details with popular keywords to boost brand visibility and help more people find your shop.
• Providing enticing, detailed titles and product descriptions that capture an item’s value and uniqueness. For example, rather than saying “sweater” you could say “women’s red handknit wool crewneck sweater.”
• Creating all 13 of the tags Etsy offers with multi-word phrases that vividly describe your products and increase the likelihood of having your items matched with a shopper’s search terms.

Placing ads for your items can help attract new buyers to your shop. Here are some of the ways you can do this for free, or for a fee:

• Etsy Ads: You can opt into Etsy’s advertising program to draw customers amidst tough competition.
• Social media: Spotlight your brand story, popular products, and promotional offers on Instagram, Pinterest, TikTok, and other platforms to interact with your audience and drive traffic to your shop.
• Customer reviews: Encourage shoppers to share product reviews to build social proof, which is crucial for earning customers’ trust and building brand loyalty.
• Etsy Stats: Take advantage of seller tools like Etsy Stats, which show you how your shop is doing, where your traffic comes from, and how shoppers are interacting with your product listings.

General liability insurance covers some of the most common small business claims, including accidental property damage, bodily injury, and advertising injuries.

For example, if an artist accuses you of selling their copyrighted work in your digital products and printables shop, general liability will pay for your legal defense, including attorney fees and settlements or judgments.

This policy will also protect you if you’re sued for:

• Third-party bodily injuries, including a claim that one of the hand-poured candles you were selling at an Etsy pop-up shop exploded, burning a customer.
• Third-party property damage, such as claims that the homemade lotion you were selling at a craft fair stained someone’s sweater.
• Advertising injuries, including libel, slander, and copyright infringement, are examples from above.

When you’re in the business of selling goods, product liability insurance provides crucial coverage for your legal expenses when a product you made, sold, or distributed causes a personal injury, property damage, or other loss.

This coverage can be particularly important if you sell beauty products, children’s items, food, certain electronics, and candles.

For example, it covers claims for:

• Injuries caused by your product, such as if a customer claims the handmade wooden music box you sold had tiny pieces that made their small child choke.
• Property damage caused by your product, such as if the vintage lamp you sold to a customer had outdated wiring that caused a fire in their home.
• Illness caused by a product, such as if your homemade cupcakes allegedly caused someone to get food poisoning.

While product liability insurance is included in many general liability policies, you should closely examine your coverage or speak with a licensed insurance agent to verify you’re properly protected.

Handling sensitive customer data, such as credit card numbers, can make you an attractive target to hackers who will use a handful of tactics to trick you into giving them access to your computer systems, resulting in a devastating data breach.

These cyber threats can include:

• Phishing scams, such as sending emails as fake Etsy support personnel, try to scare you into sharing your Etsy account login credentials.
• Social engineering attempts, including text messages pretending to be from customers with malicious links that can install malware on your device.
• Account hijacking, such as if bots get access to your Etsy shop and steal inventory, and intercept customer payments.

Luckily, there are things you can do to protect yourself from cyberattacks, such as enabling the proper cybersecurity protocols, verifying all communications you receive through Etsy, reporting suspected phishing emails to the platform, and purchasing cyber insurance.

Because cyberattacks can be catastrophically expensive for small businesses, cyber liability provides crucial coverage for recovery fees, such as:

• Data breach response costs, including customer notifications and credit monitoring services.
• Business interruption expenses, such as lost income and third-party crisis management service fees.
• Ransomware payments to meet cyber extortion demands.
• Legal defense costs, including court fees, settlements, and judgments.

When it comes to shipping purchases, once your goods are in transit, there’s a chance they could get lost or ruined, which can lead to expensive refunds or disputes.

Etsy’s Purchase Protection program offers a full refund, up to $250, for qualifying orders lost, damaged, delivered late, or not as described, but the plan is meant to protect buyers.

Sellers on Etsy should consider buying an inland marine insurance policy. This policy provides coverage for your Etsy products, equipment, and supplies while they’re in transit or if they’re being stored at a warehouse or other off-site location.

As a floater policy, inland marine coverage goes wherever the insured property goes, which can be very beneficial in situations such as:

• A fire at your storage unit destroys your supplies and important materials.
• Someone steals a shipment from a customer’s front porch.
• The truckful of products you’re taking to an Etsy pop-up shop is stolen in the middle of the night.
• A valuable piece of equipment is lost while being transported to your new workshop.

Once your Etsy shop is up and running, it’s important to find ways to keep growing your business, such as:

• Offering unique products: Instead of focusing on beating your competitor’s pricing, find ways to offer items they don’t, such as making seasonal or limited-edition products or collaborating with another brand to offer a one-of-a-kind crossover collection of items.
• Investing in your aesthetic: Hiring a marketing agency to develop a brand guide you can use across your Etsy shop and social media, and upgrading your packaging materials with your new brand identity will help you build a strong and memorable business.
• Enhancing your products: Paying a photographer to take professional product shots and using a program like Canva or Kittl to make expert-looking product mockups will make your products look higher quality and increase your legitimacy as a seller.
• Expanding your offerings: Consider ways to capitalize on your best-selling items, offering variations or customizable versions to drive traffic and boost sales.