Is it worth opening an Etsy store in 2023? I’ll take you through the 5 steps you can take to find out.
Is it worth it to sell on Etsy in 2023? Yes, it is still worth selling on Etsy. A good part-time income is very achievable, and many stores can earn enough for a full-time income. Etsy currently has 70 million active buyers per year so there will be opportunities for new stores.
Whether or not setting up a store is “worth it” depends on what you want/need to get out of it. Here I will go through what I believe is a typical return if you plan your store, and products properly.
What you can expect to earn
In my experience, a well-optimized store can expect to earn around $500-$1000 per month after 1 year.
This is a very general figure based on what I have earnt through my stores. Many stores earning far more – and many more earning much less.
How long can it take to earn money on Etsy?
If done properly you can expect to make sales within a few weeks, but this initial traction phase can take many months to get over.
If you focus on product development and getting quality reviews, I would expect a store to be making daily sales within 12-18 months. This is on the assumption you are selling items in the $15-$40 price range. If you are selling higher ticket items you will likely make the same amount but on fewer sales.
How much time do I need to spend on my store?
How much time is required will depend on the time it takes to create your products. This will take the bulk of your time as your store grows, so this should be a consideration. If time is a constraint maybe investigate production partners (e.g. print on demand services if you sell digital art), or upping your prices to accommodate your time value.
As your store grows you can spend around 2-3 hours a week investigating product development, as well as the maintenance of your store and listings.
Growing a store is about experimentation. What you start with is unlikely to be what you end up with to become successful.
Is it worth it for you?
It will come down to personal circumstances as to whether you should start an Etsy store. Here I will guide you through the key metrics.
Calculating your target income
For most, the major factor will be how much money they need to make. Few consider the time it would take to make the items they sell. I will cover both, so you will have a realistic expectation of what you’re aiming for.
I would recommend investigating the following:
- what you can sell for
- your profit margin
- how many units do you need to sell
- how long will it take to produce those units
Investigate what you can sell for
Your best source of information is on Etsy itself. Find products that are similar to yours. The top results will be from the most successful sellers in your niche. Use these as a barometer as to what price points sell well. Make a note of the average, as well as the range of prices you see.
This will also give you an idea of what competition is out there. This leads us nicely onto…
If you find 1000s of products like yours, now is the time to rethink your products.There is no such thing as zero competition, however, you want to aim for 6 pages of listings or less.
If you find too many products to compete against then try “niching down”. For example, if you make “Superhero PJs” you will find thousands. If you try “Superhero PJs for boys for the summer”, or maybe try the path less trodden. If you take the same example, maybe try some of the lesser-known superheroes. Everyone and their cousin will make Spiderman PJs, but far fewer will make “Sentry Superhero PJs” (yes, that is a superhero, and yes, I did have to google him).
There may still be demand for these “niched-down” products, and they will be great to build up your store. You can still go for the bigger names once you have an established store with loads of great reviews.
Investigate your profit margin
Work out how much you are likely to make on each product. Bare in mind that you will have to consider much more than just materials. Also, consider the following:
Etsy fees. Etsy will take a share of the sale for listing, and from the payment Tax. You are likely going to need to pay tax. I’m not a tax expert for the US but here in the UK, you will need to register for Self-Assessment. Keep some money behind for the taxman Returns and missed shipments. Stuff gets lost in the post. Customers can be jerks and return items. It happens. Expect to lose 2-3% of items you post to either of these factors. You will need to recoup the losses from your other sales.
How many units do you need to sell?
Now you have your target income, and your likely profit margin, you can make a rough calculation on how many units you will need to sell.
If you want to make $500 per month, and you have a rough profit margin estimate of $5 you will need to sell 100 units on average per month. Simple.
Not all months are equal, you will make most of your sales around holiday periods, so adjust your expectations based on this.
You can extend this idea by going back to the top stores you found in step 1. On the main store page, you can see when they started and how many sales they have. You can use this as a rough guide on how many sales are achievable.
If the top stores have done 1000 sales in 5 years, that’s roughly 200 sales a year. Using my scenario above, that wouldn’t be enough. My target income calculation projected 100 sales a MONTH. At this point, you would need to consider how you would make up for this. Options include higher prices, a wider range of products or a better job of converting sales.
How long will it take to produce those units?
You need to make 100 units a month. Can you make that many and still have a life? Etsy stores should enhance your life, not take it away from you. In order to understand the time required to fulfil your products try the following exercise.
Make 5 units, one after another. Use the average of this to calculate how long it would take to make your target monthly sales.
For example, let’s assume it takes me 30 minutes to produce 5 units of superhero PJs.
5 units in 30 mins (30/5) = 1 unit takes 6 minutes.
In my example, I need to make and sell 100 units a month.
6 minutes x 100 units = 600 minutes = 10 hours.
To hit my target I would need roughly 10 hours per month just in unit production. Plus 3 hours a week in shop maintenance = 22 hours a month. Compare 22 hours to the expected outcome ($500) in this scenario you would expect an hourly rate of around $22.
NOTE: whilst you should consider using a product partner at some point, I would recommend making the products yourself for the first few months. Sales will be low so you won’t be spending loads of time. This process will make you more in-tune with the quality issues to expect when making a move to a partner down the line. This will make that process much easier, with fewer issues.
Once you have made these calculations you can decide to either:
GO GO GO! You like the numbers, you’re keen on the market you’re entering, it has little competition, and you have the time to dedicate to the project.
Adjust. You feel close, but not quite there. The numbers are just out of reach, or you’re concerned about the competition.
If the costs are an issue – go back to the range you found in step one. Redo the math but with a higher price in that range. Rethink. Nothing is right! The costs are too high, the competition is everywhere, and there are no sales for anyone. Consider this a bullet dodged. Back to the drawing board my friend
NOTE: option 3 is by far the most common! Don’t be disheartened, try finding a new niche for yourself and try again.