How to Make Money on Etsy
I ran into a friend recently who showed me some drink coasters that she makes out of vintage tile squares. They’re pretty awesome.
Since I’m always thinking about making money and side hustles, I suggested she sell them on Etsy. She took my advice and now she’s considering starting a home-based side business.
It can be that easy, folks.
If you can make cool things—like home decorations, T-shirts, and handmade jewelry—you can sell them in an Etsy store to make extra money.
If this sounds appealing to you, keep reading to learn everything you need to know about making money on Etsy.
Table of contents
- What Is Etsy?
- How Does Etsy Make Money?
- Top Features for Etsy Sellers
- Etsy Standard vs. Etsy Plus
- Setting Up and Getting Started
- How to Make Money on Etsy
- Alternatives to Etsy
- Frequently Asked Questions (FAQs)
- The Bottom Line
What Is Etsy?
Etsy is an online e-commerce site and a top destination for selling handmade items and crafts.
Some of the main categories on the site include home decor, jewelry, clothing, wedding gifts, kids’ supplies, and anniversary presents. You can find anything from earrings to wallets to stickers—and everything in between.
Etsy has been around since 2005. The company has sellers in 234 countries and is publicly traded, with a market capitalization hovering near $11 billion at the time of writing.
Recent data indicates Etsy has more than 7.5 million sellers. In 2021, the platform’s annual gross merchandise volume reached a whopping $13.5 billion, an increase from $10.3 million in 2010. Etsy’s annual revenue reached $2.3 billion in 2021.
Further data shows more than 61 million new and reactivated shoppers joined Etsy in 2020, indicating the platform is alive and thriving.
Interestingly, a whopping 13 million users joined during the busy holiday season, between October and December—a 76.7% increase compared to the same time in 2019. It’s safe to say the pandemic is an influencing factor, with people avoiding in-store shopping.
How Does Etsy Make Money?
Etsy charges sellers a nominal listing fee of $0.20 to post an item for sale.
When you sell an item, the company also charges a 5% transaction fee, along with a processing fee of 3% plus $0.25.
Further, Etsy pays to advertise items across the web using offsite ads. So, if you make a sale from one of those ads, you’ll pay a 15% offsite ad fee.
Top Features for Etsy Sellers
Etsy offers sellers a ton of useful features. Here are a few of my favorite ones.
Chances are you’re on the go throughout the day, bouncing around between various jobs or side hustles. The Sell on Etsy App lets you manage orders, respond to buyers, and edit listings from just about any location over an Android or iOS device.
Custom Website Templates
The Etsy marketplace doesn’t give you complete control over the design of your own website, but the templates it provides are highly customizable.
Take my word for it: You can have a lot of fun sprinkling your creative flair into your online store—and you get out what you put into it.
Online sellers should know that customer service and communication are essential in delivering positive experiences to customers.
For example, suppose you sell T-shirts. A buyer might want to drill down into the components and learn where the cotton came from or the type of dye that you use. A growing number of buyers will only purchase clothes that are sourced responsibly. If a customer asks you a question and you don’t respond, they will likely go somewhere else.
To avoid that fate, use Etsy’s messaging feature to communicate directly with buyers. Messaging also comes in handy when customizing merchandise. You can even attach images and files to messages, making it easier to collaborate and produce personalized goods.
Selling can be difficult—even when you have a fantastic product. There are a ton of factors that go into influencing a sale, from pricing to branding to marketing and everything in between.
Sometimes, a few small adjustments can make a big difference in sales. That being the case, it can help to talk with other sellers who use Etsy successfully to see if you can pick up some tips.
Etsy facilitates these types of conversations through its community hub. You can learn the latest trends, browse forums for advice, and even link up with sellers in your area to communicate and collaborate as a team.
Here are a few recent discussions that are trending in the community:
Browse through the forums and you’ll see that users offer some honest feedback. For example, in the forum where a user asks for advice about running a store, other sellers provide solid insights about pricing.
If you don’t have time to browse through user forums, you can always catch up on the latest trends and insights through the Etsy seller newsletter.
Join Etsy’s email list and a steady stream of tips on improving your shop and making money will be sent to your inbox.
Etsy offers several advertising and marketing tools to boost your brand and reach more customers.
For example, the company helps you create targeted posts for social media platforms like Facebook, Twitter, Pinterest, and Instagram.
You can also reach millions of shoppers both on and off the Etsy platform using Offside Ads and Etsy Ads.
As they say, you’ve got to spend money in order to make it. Making some shrewd advertising investments can go a long way to accelerating your store’s growth.
Etsy Standard vs. Etsy Plus
If you’re thinking about opening a store on Etsy, the site gives you two options. There’s Etsy Standard, which is free, and Etsy Plus, which costs $10 per month.
Etsy Standard gives you everything you need to start a business. You can list products on Etsy and market them with sales and coupons. That said, when you use Etsy Standard, you will need to pay for extra services—like Etsy Shipping Labels and Etsy Ads.
Etsy Plus is a better option if you’re looking for more control over your business and are looking to scale your operation. For a small monthly fee, you’ll get a small monthly budget for listings and ads, as well as the ability to customize your store’s web address.
On top of that, Etsy Plus sends you restock requests when shoppers want sold-out items. Etsy Plus also comes with advanced customization options for your shop, and discounts on custom packaging and promotional items like business cards, signage, and boxes.
My Advice: Spring for Etsy Plus
You’re probably better off going with Etsy Plus. At just $10, it doesn’t cost all that much and you get a much more comprehensive experience with more tools and perks.
Any way you look at it, these tools should help you drive more sales, which should hopefully cover the cost of your subscription. Also, assuming your business is profitable, you should be able to write off the subscription as a legit business expense.
Either way, don’t fret too much about deciding between the two plans. You can always change your subscription after starting. The most important thing is to get up and running as quickly as you can.
Setting Up and Getting Started
Signing up for Etsy only takes a few minutes and there isn’t any kind of approval process.
Go through the registration process and confirm your email to begin. You’ll also need to determine which type of plan you want.
Once you register with the site, sign in and start customizing your own Etsy shop. It’s that easy.
Unlike some side hustles, you don’t need to pass a background check or have any prior experience. That said, it will help to have some technical and website experience to customize your template. It’s not necessary, but you will get up and running quicker.
Pro Tip: If you get stuck setting up your online store, think if you have any friends who are good with computers or websites. Offer to buy them some coffee or a beer for their advice.
How to Make Money on Etsy
Now that you have a general idea of how the platform operates, let’s get down to the nitty-gritty: making money on Etsy.
While Etsy certainly makes it easier to start your online business, the fact of the matter is that you still have to put in work if you want to make it rain.
Here are some tips to keep in mind if you’re trying to build a successful Etsy startup operation.
Think of a Catchy Shop Name
Behind every successful Etsy shop is a killer name. That’s because your shop name is one of the first things that people will notice about your business.
Etsy offers a helpful guide for choosing the perfect name, and I suggest you give it a read. Remember that Etsy caters to creative types, so don’t be afraid to let your creative side out. And if you can work in a creative pun, that’s even better.
As an example, suppose I want to create a vintage baseball cap shop on Etsy. Let’s call it Grant Slam. Boom! With a unique product and a catchy name like that, the store is bound to attract potential customers.
You never know when a clever name can catch someone’s eye—and this goes for both new customers and potential new business partnerships.
The Product Is What Matters
One of my favorite places to eat is a local food truck that serves the best fish tacos. It isn’t much to look at. But the food is cheap, delicious, and made with love. If you put their fish tacos next to a plate of $50 foie gras, I’d take the tacos every time.
The point is this: It doesn’t matter how you dress up a product on Etsy; the product will sell itself, or it won’t. When you list high-quality items that are interesting and affordable, you shouldn’t have a problem making money.
On the other hand, if your product is overpriced, of poor quality, or doesn’t look authentic, you will run into issues. Customers can tell when artists and craftspeople are passionate about their work and when they aren’t.
Know Your Audience
Etsy caters to all types of audiences. For example, you’re just as likely to find women’s hair accessories as men’s beard accessories.
That said, don’t spend too much time worrying about whether your product is a good fit for a particular audience. Instead, spend more time thinking about whether your product makes sense on Etsy. If it is, your unique audience will find it.
Overall, Etsy is pretty lax about what you can offer, but they do have some limitations. Check out Etsy’s seller policy to learn more about that.
For example, you can’t sell metaphysical services like divination or spells on Etsy. Sorry, witches!
Offer Personalized Accessories
Etsy recently found 24% of shoppers are interested in buying something customized on its platform.
Take advantage of this by thinking about some ways that you can sell personalized accessories on Etsy. For example, you may want to make high-quality, handmade mugs or T-shirts with custom slogans or images on them.
Keep in mind that people typically go to Etsy to find things they can’t get in places like Target and Walmart. They want the experience of discovering a new artist or something different. If you can provide that experience, you’ll increase your chances of making money.
Use Stats for Your Etsy Shop
Like it or not, you’ll have to become familiar with analyzing website data and metrics if you want to be a successful online seller. This holds true whether you’re selling on Etsy, eBay, Amazon, or anywhere else.
The good news is that Etsy’s Stats can help you with that by indicating where your traffic is coming from, how many visitors you’re getting, and what’s the conversion rate of those visits, among other things.
Using that data, you can then optimize your shop to earn more money. For example, you may find that a particular Facebook post is high-converting, so you can focus more resources on scaling that traffic.
You may also find that one item is outselling all of your others by leaps and bounds. By looking at your data, you may be able to glean some insights as to why that’s the case. Then, you can use those insights to expand your offerings in that particular niche while scaling back on products that aren’t selling.
Blogging is a clever way to support your shop. It doesn’t cost anything other than your time and you can write about anything that ties in with your brand.
For example, suppose you make unique wall prints. You might start a blog that discusses your favorite contemporary artists and how they’ve influenced your style.
As you post more of this unique content, in theory, you’ll pick up more readers and boost your search engine rankings. Simply put, blogging can bring more organic traffic to your website, and you can sell more when that happens.
You can also consider pushing out similar content on Facebook, Instagram, and other social media platforms if that’s your thing. At the end of the day, the more content you publish, the wider net you’ll be casting for potential customers.
Alternatives to Etsy
Whether you find Etsy to be a slam dunk or not, it’s always a good idea to spread your business out over different platforms. With that in mind, here are a few other platforms to consider.
eBay is a world-leading marketplace, serving 180 countries around the world. You can sell just about anything on this site via online auctions.
Members can create up to 250 listings each month for free on eBay. Anything over that, the company charges a $0.35 insertion fee across most categories. In addition, the company charges a selling fee which is typically 12.55% or less, plus a $0.30 transaction fee.
Amazon Handmade is Amazon’s version of Etsy. Using this platform, you’ll reach a global audience of artisan shoppers and sell products alongside artists from over 80 countries.
Handmade uses an application and audit process to ensure that sellers only offer handcrafted goods.
Amazon takes a 15% referral fee for every sale that you make.
Bonanza is another online marketplace like Etsy. But the site focuses more on unique and interesting items than run-of-the-mill crafts. You’ll find everything from women’s and men’s fashion to home and garden supplies to collectibles and art.
Bonanza charges a base fee of just 3.5%. That said, rates increase a bit when you opt into the advertising plan. Depending on what you select, you might pay 9%, 13%, 19%, or 30%.
Shopify is a global e-commerce provider that lets you set up an online store to sell products with plug-and-play simplicity.
Shopify offers a few different plans. The Shopify basic plan costs $29.99 per month, the standard plan is $79.99 per month, and the advanced plan is $299 per month.
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Frequently Asked Questions (FAQs)
Can You Make Money with 3D Printables on Etsy?
Etsy is a great place to sell 3D printed objects. Believe it or not, one user made over $18,000 selling 3D printed objects on the site.
Of course, this requires owning a 3D printer, which typically costs between $200 and $500. More expensive models can command $1,500 or more.
The trick is to focus on fun, unique items that catch people’s eyes.
How to Create Digital Downloads for Etsy
Did you know that you can make money selling digital products like downloadable patterns, templates, and art on Etsy?
If you’re an artist looking to make some money, simply create a digital download and list it like any other physical product. The main difference is that you upload the product when a customer makes a purchase.
For a complete breakdown of this process, check out Etsy’s guide.
Does Etsy Make a Good Side Hustle?
Like any side hustle, it all depends on your level of commitment and what you hope to get out of the experience.
With the right approach, an Etsy business can make a great side hustle. It can also take on a life of its own and become a full-time job.
For the best results, know what you’re getting yourself into before you start and be prepared to scale if your Etsy products take off. Otherwise, you could wind up pulling all-nighters trying to fulfill orders while working a 9 to 5.
Learn more about side hustles here.
Can You Make Money on Etsy without Making Anything?
Etsy is primarily a marketplace for handmade and vintage items. If you’re the type of shopper who can find great products at great prices at tag sales, secondhand stores, and antique shops, you might be able to flip these items on Etsy for a profit.
Additionally, the site also sells supplies and kits. For example, people shop on Etsy for items like needlecraft patterns and craft supplies. This is one of the unique ways to make money selling on Etsy.
The Bottom Line
Any Etsy shop owner will tell you that running a small business is hard work, and success isn’t automatic. But once you get the hang of it, this can be a great way to make money online.
With the right approach, you can unlock passive income streams—which is one of the best personal finance moves you can make.
But remember that you need to create unique, high-quality products, which takes lots of time and effort. If your time is limited, and you still want to try it out, consider going in on an Etsy business with a friend to ease the upfront costs. As you begin scaling the operation, you can also hire someone part-time to manage your site.
Before getting started, I recommend checking out Etsy’s seller handbook to get the lay of the land.
Since you’ve made it this far, you’re no doubt interested in trying your hand at Etsy. So why not hop on over to the platform and begin setting up your storefront? You never know if that next product idea will change your entire financial trajectory. Happy selling!