Selling on Etsy can be daunting, especially if it is your first experience of e-commerce. In this guide, I’ll try to break down the steps to success.
Selling on Etsy comes down to following these steps:
- Identifying great product niches. Finding your niche is like finding your small gap. Be sure to make sure there is demand before selling
- Setting your shipping and pricing competitively. Ensure you price accordingly. Make sure you are making enough money for yourself, but don’t price yourself out
- Ensure you are searchable. SEO is the key for new stores. Make sure your potential customers can find you
- Build up reviews. Once you have a handful of reviews you will start to see consistent sales coming in
What to expect as a new Etsy Seller
The internet is full of fairytale Etsy seller stories. Sellers who make 6 figure incomes in only a few months, or sellers who make their first sale in a couple of hours. I’m here to burst that bubble!
Etsy stores take time to build. I wouldn’t expect to make many (if any) sales in your first few months. If you don’t hit the huge heights that you hear about, YOU ARE NOT A FAILURE.
I believe it is perfectly manageable to make a great side income on Etsy. With a fantastic community and helpful support team at Etsy, you have all the tools you need to make your store a success.
Expect plenty of headaches, and a fair few hurdles to overcome. But you can make it! With proper planning, and execution you will have a profitable business in your sights.
Identifying your products
Identifying your product niche is the core of a thriving Etsy business. Many failed stores simply pick overcrowded, hyper-competitive niches because they are too lazy to look around for their own space.
What is a niche?
A niche market is a segment of a larger market that can be defined by its own unique needs, preferences, or identity that makes it different from the market at large.
Simply, a niche market is a subsection of a much larger market. For example – “soap” would be a broad market. A niche market would be “sustainable, vegan soap”. Niches can be subdivided further and further. For example, a sub-niche could be “ sustainable, vegan soap for art deco lovers”.By “niching down” you can find an under-served market. This is where your money will be made. As you get more successful and start growing you may find you can compete for larger and larger markets but to start you need to find your niche.
What you can sell on Etsy
Etsy has guidelines on what sellers can, and cannot sell. Etsy sells itself as the home of homemade crafts, so it shouldn’t be any surprise with what their approved categories are.
They break it down into 3 categories:
- Craft supplies
Handmade products are products designed and made by you. Covers pretty much any classic form of crafting, such as knitting, sewing. But this can include graphic design and digital products.
On Etsy, handmade items are products that are made or designed by you.
To enable stores to grow beyond sellers’ home offices, approved manufacturers are allowed.
Manufacturers must be declared in your stores listings, and the nature of the relationship must be declared.
You can physically create the items yourself, or design them yourself and produce them with the help of an approved outside manufacturer who complies with Etsy’s ethical manufacturing policies.
For example, a store may only use the help of a manufacturer for posting, whereas some sellers may have a more hands-on approach to product creation, as well as production.
Vintage items don’t have to be made by you. The main factor is the age of the product.
Here is what Etsy have to say about vintage items
For an item to qualify as vintage on Etsy, it must be at least 20 years old.
Sourcing vintage products can be tricky, but if you have a reliable source of great vintage clothing or furniture you can make great money on Etsy.
Very similar to handmade items, however, craft supplies are not intended to be a finished product.
Here is what Etsy says about products that apply to the crafty supplies section.
Within Etsy’s craft supplies category, you can sell tools, ingredients or materials intended for use in the creation of a new handmade item.
Approved manufacturers can be used, but just as with handmade items, they must be declared.
If you have an idea in mind and are unsure if it meets Etsy’s seller policies I recommend 2 options.
- Search for it on Etsy – if its allowed, it’s probably already for sale in some form or another
- Contact Etsy support – Etsy has a great support team. Contact them either by email,live chat or phone and ask if your product idea is allowed. Include as much detail as possible, including photos, so there is no room for mis-understandning
Finding products to sell as a new Etsy seller
Your product research will be different depending on the status of your store.
As a new seller, you have a blank slate. Whilst this is exciting you will have to familiarise yourself with the market.
Researching top-level categories can give you a good idea of what is popular. Brainstorming possible niches, and styles now will get you ready for your next steps.
Finding products to sell as an existing Etsy seller
You may already have a store, but find you are struggling to make sales. Whilst it doesn’t feel great, you are still in a good position. You will already have historic data on what searches are working, and which are not.
Sometimes finding out what doesn’t work is just as important as knowing what does.
As an existing seller, you are already ahead of the competition who haven’t started. They will have to make the same mistakes for themselves.
Your job will be to continue to trial new ideas and designs. A successful store rarely starts with the style that is popular from the off.
What craft to create
You will more than likely already know what type of craft you want to sell. This is your passion project after all, and it’s the main reason you’re setting up a store!
I don’t believe that your choice of craft will limit your ability to become successful, however, there are a few sections to be careful of. Jewellery is by far the biggest market for buyers, however, because of this is also one of the most saturated markets. It can be tricky to stand out. It must be noted that many sellers in this category make very similar stuff, using the same kind of craft suppliers – so if you can find a twist on a popular style you can still be successful.
There is a big boom in sellers joining Etsy selling digital products. It’s simple to understand why. By making one digital product once, they can sell it repeatedly, with no further costs. Each sale is pure profit (apart from the standard selling fees). However, this is harder to sell as it is not what is associated with Etsy by buyers. Buyers don’t look at Etsy for digital products.
In my experience the sellers I see finding success do so in homeware and design.
Product research is the heart of your Etsy store. When you are new to selling online you may be tempted to design and sell something completely unique, however, this isn’t the best way to find a successful product.
The path to success is well-trodden. Clues to what people want to buy are readily available. By finding what buyers are already looking for, you can apply a small twist – such as niching down – which will get you to your gap in the market.
Market research on Etsy can be tackled from two angles:
- Investigating what already sells
- Investigating whether your new idea can sell
Both of these attack the same problem from two opposing sides.
Investigating what already sells
Most successful stores have a handful of products that sell well. The 80/20 rule is usually in play.
80% of sales come from 20% of the products
By identifying items that fit in the 20% of products we can look for common ideas or styles. This will become one of your trial products.
Going into top-level categories. Find stores with high numbers of reviews. These stores have a history of what sells. There will be clues on what you can do.
See what they have sold. There are two ways of doing this. Some older stores have “sales” clickable.
This will show a full history of what the store has sold.
Some newer stores don’t have this. In this case, look at the reviews. This is not as accurate but will give great insight still.
Investigating whether your new idea can sell
The other way around is to think of niches and products you think would be popular.
By doing the same process above, but by searching for the product. If you find similar products that are top sellers, then you could be on to a great product idea.
I recommend doing a combination of the two approaches to identify niches you believe you can rank for, and which also have a history of selling. A scan through the first few pages should give you a clue on what the top sellers are.
First, what is a keyword?
It’s the search term that you want to rank for with a certain page. So when people search for that keyword or phrase in Google or other search engines, they should find that page on your website.
In essence, keywords are the search terms buyers use to find what they are looking for.
The idea with keyword research is to identify search terms that have low competition, but with high search volume. Keyword tools such as Keywords Anywhere or eRank are fantastic. Adding these low-cost extensions can be great at getting at search data. Both of these services provide estimates on how many times keywords are searched for. This is known as “search volume”.
Comparing the search volume with the number – and relevance – of the results you can get an idea of how competitive the keyword is.
This is covered in more detail in our guide to market research.
Deciding on shipping options
Shipping is often overlooked by new sellers. There is a balance between offering cheap shipping to attract new customers (improving conversion) and spending enough on the packaging and shipping method to keep customers happy.
It is true that free shipping is given priority in search by Etsy, and can help improve sales conversion by 20%.
… many sellers who set up a free delivery guarantee saw a 20% increase in sales, on average
However, it should not be seen as a “must”. If you need to charge a nominal fee to ensure the product gets to the customer safe, and quickly you should always do it.
Finally, you need to understand what your competitors are offering in terms of timescales and packaging. I would always recommend you try to beat your competition in at least one of the following:
- Processing time
- Shipping method (e.g. include tracking as standard)
Offering a better shipping experience is a great way to exceed buyer expectations, and get better quality reviews.
Plan your shipping packaging
Damaged goods have a negative impact not only on reviews but also profit as damaged goods require replacements.
I recommend planning packaging before pricing. Packaging planning requires a clear mind to understand how to best protect your items. As you move to product pricing you can get too caught up in profit margin – and whilst margin is important, customer experience should come first.
Where should you source your packaging from? Ensure you have a reliable supplier of whatever you need to protect your products. Amazon is great for packaging, but may not be reliable long-term. Not something to worry about now but something to keep an eye on as your store grows.
My final recommendation is to try a practice delivery. Send the item to yourself, or a friend and see what the experience is like with the courier.
Plan your shipping costs
Now you know how big your item will be, you can now look into costs. Tracking may seem expensive, but lost packages happen and sending replacements is often more expensive than investing in proper tracking. Customers will never want to track packages until the item is lost!
I would recommend only shipping with your own country to start. Shipping internationally is a great growth area – however, the complexity of getting items to their destination safely is much harder. Problems with broken items and lost packages are far more common when shipping to other countries.
Over time as your store grows you can expand to international orders.
Plan your pricing
By this point, you should have an idea of what you’re selling. You should also have rough costs of:
- Item materials
- Shipping packaging
- Shipping costs
I would also recommend adding an extra 20% at this point to cover fees and taxes. This will be your “cost price”. This is the price to produce, sell and ship your product.
Finally, you need to find out your “sale price”. This will be the price you eventually try to sell your product for. A good way to do this is to go back to your product research. You will find what the most successful listings are selling for. There will be some variety to the prices across different stores, so find out what the rough range is.
Deciding if your store idea is viable
By this point, you should now have all of the information needed to make a decision as to whether your new store idea is viable or not. Not all niches will be, and sometimes the potential profit margin just isn’t there.
Calculate your costs and compare them to your sale value. First check – is it profitable? A very easy check – if your costs are higher than the potential sale price then the store can never be viable.
Secondly, you will want to aim for a margin of at least 15-20%. Any less and you get little return for your effort.
Also, consider time effort. Calculate how long you will likely spend making. Craft may be your passion now but wait until you’re up at midnight on a Friday night finishing your weekly batch for the 6th week in a row.
Check out our article on “Is Selling on Etsy Worth it?” to find out how to calculate this.
New Store Checklist
So, you have completed your product research, and you know you’re on to a winner? Fantastic, let’s get this show on the road!
There are key points you want to hit early on to make sure your store is primed and ready for sales as soon as possible.
I prefer the “DONE IS BETTER THAN PERFECT” approach. There will be plenty of time-drains where you will waste your effort early on. I recommend you get your store open and adapt over time.
I would strongly recommend following the steps outlined earlier in this article. Before you start your store you should have:
- At least 5-10 products
- A list of 2-3 keywords for each
- Cost price for each
- Sale price for each
What you will get
By the end of this process you will have:
- a fully functioning store ready to take orders
- basic SEO targeting buyer keywords
- set up ready to track data – This data can be used later to influence future decisions in your business.
- all of your policies and terms filled out. Etsy loves this and will set you up for future success. These will often be “set and forget”. Get them done now and you never have to think about them again
I recommend the steps be taken over the following time periods.
Your first day
The target for the first day is to get a solid foundation. You will have:
- An open store
- Your first products listed
- Shipping set up ready to post
Opening your store
- Go to Etsy.com/sell. Select Open your Etsy shop
- Add billing information
- Add your location
- Add information on your craft
You will need to add a credit card on file. This is important as you may not always have funds in your Etsy wallet to pay for fees. This credit card will be charged if you don’t.
Adding payment options
Etsy uses Etsy payments. No need to fuss with PayPal accounts
You will be prompted to add your bank details. This way you will get your funds directly via a bank transfer.
Adding your first products
The aim of this step is to get things LIVE. Your listings won’t be perfect, however, we will be refining them in the coming weeks.
Go to your Etsy dashboard and select Listings
Here is a great tutorial on how the new listing manager works
Focus on getting your first 5-10 products listed.
For each listing include:
- As many images as possible. If you only have 1 or 2 at this stage, this is fine. We will be optimising this as we go.
- Add the keywords you identified in your title, description and tags.
- Add as many attributes as possible. Size, colour, seasonality etc.
- The sale price you calculated in the previous step
Adding Shipping Profiles
You can set up your shipping profile directly from your Etsy listing editor screen.
Be sure to set realistic processing times, and delivery estimates. Set the price using the shipping price you calculated before.
I would recommend only shipping to your own country at first. This will keep things simple.
Adding store policies
Etsy has a very thorough guide on how to complete your policies. The Etsy policy guide can be found here.
This should take a couple of hours to complete.
If you made it this far then fantastic! You now have a live Etsy store!
Grab a cup of tea and a biscuit. Take a break for the day. There’s plenty more to do in the next few days…
You now have the basic structure for your store. Now we need to improve your listing search rank, and to complete the look and feel of your store. Both of which will improve your chances of making that first sale!
Setting up your store icon and banner
First you need to create the icon and banner. I highly recommend Canva for this. Simple, quick, and free. Ideal.
Here is a quick tutorial on how to make your store banner
To manage your shop banners:
- On Etsy.com, click Shop Manager.
- Click the pencil icon next to your shop name under Sales Channels.
- Click the pencil icon to the bottom right of your banner.
- Click Change layout.
- Select the type of banner you want.
- Click Done.
To edit or add a shop icon:
- On Etsy.com, click Shop Manager.
- Click the pencil icon next to your shop name under Sales Channels.
- Click the camera icon on your shop icon.
- Click Choose a file.
- Select your file and click Choose.
Setting up your “About Me”
Your About section is where you can share the story of your business. Shoppers can learn more about your creative process and any collaborators you have.
The Etsy community values openness and clarity. We encourage you to tell the story of your business by sharing information about the members and processes behind your Etsy shop. This helps to highlight what you do.
Optimizing your listings
As the days and weeks go on you will start to see traffic coming to your store. Now is the time to make note of what search terms are being used. You can find this in your stats section of the dashboard.
This will give you some insight into how buyers are searching. Now is the time to revisit your listings and update the titles, descriptions, and tags. Be sure to spend adequate time investigating and trialling new tags and titles.
See our guide on SEO on how to do this.
Add more photos
Now is the time to focus on your photography. See our guide on how to make your store look professional on tips and tricks to make your photos look better
Etsy provides some great guidelines on how to make the most of your photos. You can see Etsy’s “Best Practices” guide here
Building up reviews
Reviews are vitally important for new stores. As you continue to optimize your listings I recommend you chase some good early reviews.
You will unlikely get many (if any) orders until you have some good reviews under your belt. This is the step many sellers fail at, and then give up.
You can read more about why reviews are important in our guide to reviews.
I also have some step-by-step guides on how to get your first reviews in our guide here.
Your final task over the next few months is to track your progress.
Understanding your stats, and getting actionable steps is a skill unto itself. Here is a great guide from marketingartfully.com to guide you through.
Check your tags and titles every few months to try and refine them. Be sure to check out our SEO guide on how to do this.
The last word…
If you’ve followed this guide all the way to the end, and you completed all the actions then awesome job! You should be well on your way to building your successful Etsy business.
We have plenty of guides to help you grow your business. Feel free to check them out here!