I'm throwing down a LOT of information here! You'll see the pros and cons, the good and bad, and the risks and benefits of selling on etsy this year or any future year.
Take these tips for what they are – Tips. Use what is helpful to you, and go forth and make money crafting!
Have a Specific Question About Selling on Etsy Successfully?
Start with one of these smaller, straightforward posts:
- How Much Does it Cost to Start an Etsy Shop
- How to Start an Etsy Shop: The Technical Bits
- What you Can Sell on Etsy that isn't Crafts
- Popular Things to Sell on Etsy – How to do Market Research
- How to Make Printables to Sell on Etsy
Or use the table of contents to get to the information you're looking for.
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Tip #1 – Be Original
A lot of crafters see other people’s work and think I can make that, and while that’s a good way to improve your own skills or make items for yourself, that doesn’t always mean you should sell it.
The reason being, you’ll never be successful imitating (or copying) another person’s work. And even if you are, it's just not cool to take someone else's creative vision and call it your own.
It's also generally illegal.
Say you’ve learned to use Photoshop or Canva pretty well and decide you want to sell party invitations. You decide to do some market research and see the most popular birthday themes on Pinterest or Etsy.
Chances are, 90% of these are going to be licensed characters – think Disney, Marvel, Hello Kitty, Nickelodeon characters, etc. You can’t sell these.
Yeah, maybe you can find PNG files of the characters to include, and you’re doing most of the work yourself choosing fonts and layouts, but these aren’t your characters, so you can’t sell things made with them.
You can’t even draw a version of the character because if it’s recognizable as their character (ex. Princess with blonde hair and a light blue dress, aka, Cinderella), they can still sue you.
Etsy will close down your shop for this type of violation, and all your hard work will be gone, so it’s best to avoid using licensed characters or materials.
You also can’t use many phrases, such as phrases from movies or songs, in designs for signs, shirts, mugs, etc. Basically, you can’t profit off someone else’s ideas.
You also need to be careful of the terms that you use to describe your items.
Two things that I learned about in my own experience were “onesie” (Gerber trademarked it, and they have very strict terms about how the word can be used) and “shabby chic” which is actually a trademarked term and not just a style description.
You can’t sell items made with a sports team or character fabric, and you can’t sell items with Greek letters either.
Do your research. If you’re not sure if a word or term can be used, either find out or just avoid it.
Extra note about fonts.
Another note about use – even things like fonts have rules about how they can be used. When you download fonts, be sure they can be used commercially.
I use Dafont because they have a filter for 100% free fonts. If it looks like something recognizable (Disney, Harry Potter, Minecraft), just avoid it.
Even if the artist who created this font is listing it free for commercial use, it’s unlikely they have rights from the company that originally designed that lettering style.
This is true with things like SVG files for Silhouette or Cricut products.
An artist may design a Mickey Mouse head design and list it free to use commercially, but they didn’t have the rights to create that file in the first place, so you can’t use it either.
Extra note about similarities.
But what about something more subtle, like copying a concept or a style?
This is a much more gray area, but take a moment and think – if you were the original creator, how would you feel about someone copying what you have made?
Etsy sellers occasionally find great success with an item or style, only to find that the more it gets shared on social media, the more it gets copied.
So many sellers now are applying for copyrights or trademarks, trying to protect their great ideas.
You may be flattered when a friend sends you a link to an item on Pinterest and says, “Can you make this for me?” You may be excited about getting the business or feel great that they appreciate your skills.
But think for a moment, how would you feel if you made something great and posted it on social media, only to have others tagging their friends and commenting things like, “Will you make this for me?” or “I could make this for cheaper!” or even redirecting others to their shop instead.
How would you feel if people were stealing pictures from your website and putting them on their own site as representations of the work that they could create?
This type of thing happens all the time. As creators, it is natural to take inspiration from the things we see around us. Be inspired – but don’t copy.
Develop your own ideas and style, and way of doing things. You’ll never find true success imitating others, and you could get yourself in some very sticky situations if you do.
True artists may spend years refining and honing their techniques before they sell their work.
Tip #2 – Refine Your Skills
You just found a craft you’d love to try on Pinterest. You watched tutorials, bought all the tools, and made your first project.
Everyone loves it and says you should sell it on Etsy! But are you really ready? Before opening your shop, you need to refine your skills and make your product unique.
Why is this important? Etsy is a competitive marketplace, and you are going to need to be one of the best at what you do to truly be successful.
An essential part of successful sales is understanding your target market or the people that will be buying your product.
Many Etsy buyers expect a certain level of professionalism, expertise, and quality. They have purchased items that are made by artists and craftsmen worldwide that arrive beautifully packaged.
They have spent more on wedding invitations to have them made out of the highest quality materials or on home décor items that are completely customized to their preferences.
These are people who shop in boutiques and who are not afraid to pay more to get exactly what they want.
These are not the only Etsy buyers out there, but many of them are, and this is what makes the Etsy marketplace special. Ultimately these are the buyers you want to appeal to, and these buyers are looking for quality.
Are your products really good enough?
A true artist or craftsman has likely spent years developing and refining his or her skills. She has studied and honed her techniques.
He has carefully chosen the materials he works with, prioritizing quality over price.
Does this sound like you? If not, don’t despair; that doesn’t necessarily mean you shouldn’t sell or won’t find success along the way to achieving this goal.
However, we can learn lessons from these artisans and makers that will help us be successful in our Etsy shops.
There are plenty of places to take classes to improve your skills.
Checkout CreativeLive for classes from the worlds most talented people. Each of these classes costs between $7-$25 at this time, and could be just the thing you need to get ahead of the competition. Or, use code CP10 at THIS LINK to save $10 off a creator pass, which gives you unlimited acess to every creative course. (expires 1/31/22)
Don’t sell it just because you can make it.
One of the first things I wanted when I started my crafting journey was a die-cutting machine. I actually watched the Cricut infomercial repeatedly, imagining all the amazing things that I would be able to make.
When I finally purchased one and started making things, people gave me really sweet feedback.
I was delighted to see pictures of things on blogs (this was before Pinterest) and make similar items myself. People seemed to like the items I gifted them.
I thought maybe someday I might like to be able to sell items at a craft fair, but I didn’t consider my items really all that special or unique.
That’s not because I underestimated my abilities; it’s because they weren’t existent. These days, many crafters have a Cricut, a Silhouette, or a Brother die cutter.
Etsy, Amazon, Alibaba, and similar supply marketplaces and Pinterest and YouTube make starting a new hobby easy, not just for you, but for others.
A search for “vinyl decal” on Etsy brings up 456,733 listings. You’ll have over 300,000 competitors if you try to sell a “wedding necklace.”
Whether you make hair accessories, baby leggings, or bath bombs, you’ll have tens of thousands of competitors. What is going to set you apart?
There are a lot of things you need to know and do to be successful selling in the Etsy marketplace, but if you are not making quality products that rival or beat your competitors, you will not be successful.
So learn to look at your work with a critical eye.
- What can be improved?
- Where can you find higher-quality materials that set you apart?
- What classes can you take to improve your skills?
- What are small things about your product that you can tweak to make your item more unique?
How to refine handmade craft skills
Pinterest and YouTube are great places to start, but many (newer) streaming video services specialize in arts and crafts.
Skillshare is my favorite. I learned how to illustrate on my iPad with their classes. You can also learn cake decorating, photography, and graphic design at Skillshare.
I love the professional quality of the videos as well as the ability to have direct contact with instructors.
A year’s subscription is comparably priced to Netflix, but they frequently have deals. Use this link to get a free 30 day trial!
Creative Live is also another option I am really loving that offers free live-streamed classes and then provides those classes for purchase at a later time. They have an all inclusive option or a pay by class option, so it's very affordable.
Craftsy is also awesome. To me, Craftsy is more in-depth and technical. For many areas of interest, such as sewing, the instructors teach techniques well above my skillset. This is good usually, but sometimes I need to go a bit slower.
This makes me love their pricing structure, which is paying for each class independently for lifetime access.
The newest service I am drooling over is called Masterclass. For around $90 a class, you can learn a skill from a successful professional in the field – Kevin Spacey, Judy Blume, Jane Goodall, and more.
Interesting Offerings right now include:
- Sara Blakely Teaches Self-Made Entrepreneurship
- Tan France Teaches Style for Everyone
- Wayne Gretzky Teaches the Athlete's Mindset (not just for athletes, this man is WISE)
There aren’t many craft-related classes right now, but this platform is definitely something I would keep an eye on. Have you seen others? Leave a comment to let me know your favorite!
Etsy Tip #3- Get Organized
You’ve decided on an original product. You’ve polished and refined your creative techniques. Are you ready to open anThe cost of starting an Etsy shop. Etsy makes setting up a shop easy and provides its sellers with many different resources to help them be successful. There is a lot to learn, but it’s simple to get started. First of all, if you know someone with an Etsy shop, you can get 40 free listings to start with! The listings on Etsy usually are $0.20 apiece and stay active for four months. If you don't know anyone, feel free to use mine! When you make a sale, Etsy will take a fee (currently 3.5% of the purchase price). Depending on how the item is purchased, either Paypal or Direct Checkout will take an additional fee for processing. Be aware of these fees when you calculate how much you want to charge for your items. Etsy also provides shipping options through USPS. These are discounted prices, so I definitely recommend purchasing your shipping through them. You can get a cheap postage scale, print labels at home (I use this Brother printer because of its toner efficiency), and you can ship items directly from your home either through your mailbox if it fits or by requesting a package pickup on the USPS website. Opening an Etsy shop means opening a business, and there are many steps you’ll have to follow and hoops to jump through to do this correctly. More confusingly, it varies from country to country, state to state, and even city to city. Do a quick Google search for opening a business in the city you live in to begin researching what you will need. In the US, you will want to apply for a tax id number which you can use to avoid paying taxes on store-bought items and collect appropriate sales tax to pay to your state. Etsy makes it easy to set up your shop to collect sales tax in your state. You’ll want to be in contact with your city as well about restrictions for businesses. For example, I can sell items online from my home, but I can’t sell items directly from my home to customers. I recommend setting up a small business account at a bank as well as a separate PayPal account to keep all of your money separate. You can deduct money from this to pay yourself, but keeping personal and business expenses separate will save you a big headache come tax time. You’ll also want to determine how you’re going to keep track of your expenses and income. When I started my Etsy shop, I used an Excel spreadsheet and made sure that I kept all of my receipts. Now I use a bookkeeping program, which automatically imports all of my income and expenses through Etsy, Paypal, and my bank account, sorts them based on category (like shipping, supplies, or Etsy fees) and generates the paperwork to give to my accountant to prepare taxes. I definitely recommend hiring an accountant to help you with your taxes. He or she will be able to help you find the appropriate deductions (you can deduct an area of your home for home businesses, gas for travel to the post office or store to purchase items, etc.) and will let you know at what point you no longer have a hobby but a business you have to pay income taxes on. Decide on an initial goal for your Etsy business. Your goals will change and grow as your shop changes and grows, but having an initial goal will help you get started. Be sure that this is an achievable goal. When I first opened my shop, I was spending about $300-400 a year on craft supplies. My goal for my first year was to simply be able to support my crafting habit. Another goal I have had in the past was to pay for a family vacation. If you want to try to replace a full-time income in another job, be aware that this may take several years to get your shop to this level, and very few shop owners become this successful. As well as goals for income, set goals for time management as well. How much of your life do you want to dedicate to having a successful Etsy shop? I see so many shop owners in my various Facebook groups who want to stay home with their young children and replace a full-time income right when they get started. This is ambitious, not just financially, but time-wise as well. I hear of Etsy sellers all the time who work full days taking care of children or at jobs and then come home and sacrifice sleep for crafting. Other Etsy sellers have found success by working on it 80 hours a week. You can only sustain this lifestyle for so long. Other things in your life will be sacrificed. For some people that may be acceptable, but I recommend deciding before you get too far in how much of a space in your life you want your shop to take.
Taxes and permits.
Setting business goals.
Etsy makes setting up a shop easy and provides its sellers with many different resources to help them be successful. There is a lot to learn, but it’s simple to get started.
First of all, if you know someone with an Etsy shop, you can get 40 free listings to start with! The listings on Etsy usually are $0.20 apiece and stay active for four months. If you don't know anyone, feel free to use mine!
When you make a sale, Etsy will take a fee (currently 3.5% of the purchase price).
Depending on how the item is purchased, either Paypal or Direct Checkout will take an additional fee for processing.
Be aware of these fees when you calculate how much you want to charge for your items.
Etsy also provides shipping options through USPS. These are discounted prices, so I definitely recommend purchasing your shipping through them.
You can get a cheap postage scale, print labels at home (I use this Brother printer because of its toner efficiency), and you can ship items directly from your home either through your mailbox if it fits or by requesting a package pickup on the USPS website.
Opening an Etsy shop means opening a business, and there are many steps you’ll have to follow and hoops to jump through to do this correctly.
More confusingly, it varies from country to country, state to state, and even city to city. Do a quick Google search for opening a business in the city you live in to begin researching what you will need.
In the US, you will want to apply for a tax id number which you can use to avoid paying taxes on store-bought items and collect appropriate sales tax to pay to your state.
Etsy makes it easy to set up your shop to collect sales tax in your state. You’ll want to be in contact with your city as well about restrictions for businesses.
For example, I can sell items online from my home, but I can’t sell items directly from my home to customers.
I recommend setting up a small business account at a bank as well as a separate PayPal account to keep all of your money separate.
You can deduct money from this to pay yourself, but keeping personal and business expenses separate will save you a big headache come tax time.
You’ll also want to determine how you’re going to keep track of your expenses and income. When I started my Etsy shop, I used an Excel spreadsheet and made sure that I kept all of my receipts.
Now I use a bookkeeping program, which automatically imports all of my income and expenses through Etsy, Paypal, and my bank account, sorts them based on category (like shipping, supplies, or Etsy fees) and generates the paperwork to give to my accountant to prepare taxes.
I definitely recommend hiring an accountant to help you with your taxes.
He or she will be able to help you find the appropriate deductions (you can deduct an area of your home for home businesses, gas for travel to the post office or store to purchase items, etc.) and will let you know at what point you no longer have a hobby but a business you have to pay income taxes on.
Decide on an initial goal for your Etsy business. Your goals will change and grow as your shop changes and grows, but having an initial goal will help you get started.
Be sure that this is an achievable goal. When I first opened my shop, I was spending about $300-400 a year on craft supplies. My goal for my first year was to simply be able to support my crafting habit.
Another goal I have had in the past was to pay for a family vacation. If you want to try to replace a full-time income in another job, be aware that this may take several years to get your shop to this level, and very few shop owners become this successful.
As well as goals for income, set goals for time management as well. How much of your life do you want to dedicate to having a successful Etsy shop?
I see so many shop owners in my various Facebook groups who want to stay home with their young children and replace a full-time income right when they get started.
This is ambitious, not just financially, but time-wise as well.
I hear of Etsy sellers all the time who work full days taking care of children or at jobs and then come home and sacrifice sleep for crafting. Other Etsy sellers have found success by working on it 80 hours a week.
You can only sustain this lifestyle for so long. Other things in your life will be sacrificed.
For some people that may be acceptable, but I recommend deciding before you get too far in how much of a space in your life you want your shop to take.
Many Etsy sellers go into business because they love making things.
As you plan and get organized for opening your Etsy shop, be aware that you will spend only part of your time making the items you sell. You will also need to spend time:
- Writing listings
- Photographing items
- Talking with customers
- Shipping items
- Handling problems (lost or damaged shipments, dissatisfied customers)
- Marketing items on social media
- Purchasing supplies
- Researching trends
- Designing marketing materials (business cards, packaging inserts)
- Developing new product ideas
- Improving product listings (SEO, etc.)
It’s easy to get carried away and spend a day researching trends or spend an entire morning just trying to design a business card.
There is always more that you can do to improve your shop. You need to decide how much time you’re going to dedicate to these things because these are really the “unpaid” part of your job.
Schedule & manage.
I would recommend scheduling your working hours and sticking to them. Also, use your time wisely. If you’re going on social media for work purposes, don’t allow yourself to get distracted by personal business.
When trying to manage your time, also take into consideration when you work the most efficiently.
If you have good energy first thing in the morning, maybe use this as the time you actually create your products rather than starting the day with convos or social media.
Use the time you spend waiting in line at the grocery store to renew listings or respond to comments on social media since those things don’t require as much focus or time.
But don’t try to do things that require more focused attention, like answering customer convos while walking the dog or feeding your kids lunch.
Sort your responsibilities and tasks for efficiency, and you’ll be able to best take advantage of the time you have and provide the quality customer service Etsy customers have come to expect.
I hope that some of these ways to help you get organized in your Etsy business will be helpful to you.
If you have any hints or organizational tips that I didn’t include, please include them in the comments below. I’d love to hear what you do to stay organized!
Etsy Tip #4 – Find A Niche & Know Marketing
A niche market is a small area of a specific market on which an Etsy seller might focus to meet a need that has not yet been met.
It’s important in a marketplace as large as Etsy to find a niche within your area of expertise to help yourself stand out, but this is easier said than done.
Niche marketing for Etsy sellers is, in some ways, the most challenging part of being an Etsy seller and one that many sellers overlook.
It involves thinking outside of the box and problem solving, which often means a greater initial struggle with marketing and getting your product seen.
However, if you are successful in finding a niche, you may go from being a small handmade shop to something you might see being pitched on Shark Tank.
Testing the Etsy market.
As I discussed in the first tip, there are so many competitors in the Etsy marketplace for cliché handmade goods.
The marketplace is swamped with jewelry, baby items, clay items, wedding items, etc., which is great for buyers, but not as much for sellers.
To begin finding your niche, think about the things you have made and how people have reacted to them.
Have people ever told you that something you’ve made was unique, something they’d never seen before, or really creative?
Not that they admired your skill or ability to do it, but the product itself was something truly special? If not, don’t despair, but if so, this is where you should put your focus.
Make a list of these things and do some market research.
One Seller told me:
“One of the products I initially started with was a fabric-covered party hat. At the time, these were relatively rare on Etsy, so these ended up helping my shop take off.
I also started offering pennant banners and appealing to moms and photographers who wanted cute first birthday photoshoot props.
While I was making these, I realized that the iron-on appliques I was using to make them were really cute as t-shirt decorations, and so I put up a listing offering a group of them for a baby shower craft station.
There wasn’t really anyone offering these sets on Etsy at the time, so it took off.”
What to do if your niche gets too crowded.
As you become successful in your niche, you are guaranteed to gain competition. Competition is not always a bad thing.
Other sellers may be bringing awareness to the niche market, and they can also encourage you to up your game.
What can you offer that they are not offering? What can you do to make your products even better?
One thing I definitely discourage you from doing if you find that others are crowding your niche is lowering your prices.
Should I Lower Prices on Etsy?
DO NOT lower your prices in a case like this. In fact, maybe consider raising them.
- Decide that your products are better quality than the others. If they aren't, make them that way.
- It's likely not worth your time to sell your items at a lower cost than you do currently.
- Lower costs can actually turn away quality buyers. The type of customers you want on Etsy are the ones who can afford to spend more on Quality items.
If your niche becomes crowded, I recommend doing the following:
- Rise to the top – Increase your prices and offer things buyers want, like customization and personalized attention.
- Be inventive – alter your product offerings to fit current trends or set new trends by making your product just slightly better or different from your competitors.
- Develop a unique style – try using a new material, altering your color scheme, or presenting your item in a unique way.
- Connect with competitors – you may find that you’re swamped with orders and just can’t meet all of your customers’ needs. It’s always nice to have someone whose work you admire to send referrals to. Who knows, maybe they’ll return the favor.
Analyze your worst sellers.
Not every item I have listed on Etsy was a success. I tried selling other things as well.
Initially, I had some handmade cards listed (never sold any), and for a while, I experimented with hair clips, but the market there was swamped, and they were expensive to ship, which was a turnoff for buyers. I had a whole shop filled with kitchy vintage button jewelry once.
It did well for a bit but then at a point it was no longer popular and sells just stopped.
As I mentioned in the first tip, just because you can make it doesn’t mean you should sell it. There are going to be missteps along the way. There are going to be items that don’t sell.
You need to periodically take a look at your statistics and see what isn’t selling or what isn’t getting any traffic. Then either improve those items or ditch them.
You need to be able to step back from your shop and be a little objective. At a certain point, relisting an item over and over gets costly.
You’ve already put a lot of time and energy into making and marketing it. Consider it a loss and a learning experience, and maybe find someone who might like it as a gift.
Sadly, this may happen with your Etsy shop as a whole. There are sellers who are on Etsy for months, even years, and just don’t make sales.
As difficult as this may be, our failures are often our greatest learning experiences.
But to be able to learn from the experience, you need to be able to step away emotionally and question why things aren’t working.
Sometimes it’s not the product itself, but your photos or your descriptions. I saw a beautiful Etsy shop the other day with really unique items and beautiful photography.
On the surface, she seemed to be doing everything right. She’d even found a niche! But her items weren’t getting noticed.
She could do some tweaks with her SEO (search engine optimization), but overall she was doing everything by the book and just not as successful as she had hoped.
Ultimately I think she may have chosen too small a niche, which leads to my next point.
What to do if your niche is too specific.
If you find yourself in this situation where you seem to have done everything right, but you’re still not making a lot of sales, you may have too small of a niche, or Etsy may not be the right place for you to be marketing.
What if you make items for a customer base that has just never heard of Etsy?
You may still want to sell your items on Etsy (after all, if you make your own website, you’re going to have to reinvent the wheel a bit, and Etsy still has a lot to offer), but you may have to educate your customer base on where to find these items.
You may consider going to conventions, or advertising on niche websites or in magazines your customers are already reading.
Try connecting with your potential customers through Facebook groups, forums, or Meetup groups.
While niche marketing for your Etsy shop is essential, it also shows one of the limitations of Etsy and handmade goods as a whole.
Etsy Tip #5 – Invest Carefully
One question a lot of first-time Etsy shop owners have is how much of an initial investment they should make in their shop.
As their shop begins to take off, I also see a lot of Etsy owners wondering when they will be able to leave their day job.
Will they ever be able to make six figures? Let’s talk about financial planning for Etsy sellers, and I’ll begin with this advice- invest carefully in your Etsy shop.
How much money should you invest in your Etsy shop.
One of the great things about Etsy is that it literally only costs 20 cents to get started selling, other than the cost of your materials.
Unlike having a storefront, you don’t need to pay rent or employees or fill an entire shop with things to sell and hope people walk in the door and buy those things.
You’re able to start small. You don’t have to pay anyone to run the shop when you go on vacation; you can just put the shop in vacation mode.
Etsy is a great side hustle. You do not need to invest much time or money to get started, and YOU SHOULDN’T.
I’ve seen a lot of e-commerce sites for handmade businesses lately beginning to offer loans for small businesses.
Many handmade sellers are excited about the prospect of getting this “free” money to invest in their business.
Other sellers put an initial investment on a credit card or take a loan from a family member to get started. I would NEVER recommend doing ANY of this.
Of course, it would be awesome to have someone invest financially in your business from the start. Wouldn’t it be great just to buy all of the craft supplies and tools you needed to make really awesome things?
So why not?
Until you’ve been successfully selling on Etsy for a while, you honestly don’t even know if the things you’re going to make are even going to sell.
And even if you have been successfully selling, I would never recommend taking on any debt for your Etsy shop.
Definitely reinvest a percentage of the money you make selling back into the business, but don’t take on Etsy debt. Etsy is such a finicky marketplace.
Etsy will occasionally release a new algorithm, or some other change they think will be great for the marketplace, and your shop might suddenly slow to a halt.
Anything can happen.
Trends change, and maybe the item you sell just isn’t something people are purchasing anymore.
You might get accused of a trademark or copyright violation and have your listings pulled, or even your shop closed completely.
Also, income varies widely. I’ve had some months where I’ve sold $50 and others where I’ve sold over $2000 of product.
Even if you get to the point where you reach that $2000 or even $10,000, your income may plummet next month unexpectedly.
If you’re relying on that income yourself or have to pay back loans or credit card bills, you’re going to be in a big mess.
I would recommend starting with no more money than a couple of hundred dollars. This is a small enough amount that most people could afford to lose if things don’t work out.
Unfortunately, starting an Etsy shop is a bit more like a gamble than an investment, at least at first. There are a lot of Etsy shops that just don’t make it off the ground.
Instead of excessive amounts of money into your shop at the beginning, invest your time into learning all about Etsy.
Research what works, what doesn’t, what products are popular, who the typical Etsy buyer is, where there might be a niche for you, and how to do SEO for Etsy.
These are investments you’ll be able to use even if you have to change platforms or you decide to sell something completely different. Education is always a worthwhile investment.
How should you price your Etsy items?
The biggest mistake that sellers make when starting to price their items (one I definitely made myself) is determining a price based on what you yourself would pay for the item.
Chances are you are not your target market. There are some different schools of thought on how to price your items.
The first place to go to get an idea of how you should be pricing your items is Etsy itself. How much are similar items going for?
Figure out the price range. Look at sellers who have made lots of sales of comparable items and see what price point they are using.
This should give you a ballpark figure, and I would advise trying to price your items somewhere in the high middle.
There are formulas out there for this sort of thing. I am most familiar with taking the cost of making the item, adding in your labor cost, and multiplying that amount by two for wholesale or four for retail.
A simple forumla.
So suppose that you wanted to sell a scarf you knit. You spend $8 on yarn (you should also consider the cost of needles, etc., but we’ll put that aside for now).
It takes you 4 hours to knit, and you would pay yourself $12 an hour. So you add this amount together and get $56, which means your item should wholesale for $112 and retail for $224.
Now I don’t know that there are buyers out there for a $224 scarf, and if there are, I’m not sure they’re buying it from someone selling it on Etsy.
A quick search of Etsy will show you that most knit scarves are being sold between $35-65. So what should you do if this is the market you want to get into?
You could look at reducing the price of your goods and the time that it takes to make your items.
A cost of $5 plus two hours of work at $10/hour would put you at $50 wholesale or $100 retail, which is still significantly higher than what similar items are selling for on Etsy.
So, in this case, you can either pass on the product and find one that sells for a higher price point or simply agree to earn less (which is never ideal).
There are some crafts that just won't lend themselves well to making money. Off the top of my head, quilting, and cross stitch (both things that I enjoy) are really difficult to make profitable. My last cross stitch project took around 50 hours to complete. Nobody will ever pay me for that time. Instead I cross stitch for my own enjoyment, and create things that take less time to make for selling on Etsy.
Should you quit your day job to sell on Etsy?
This is the dream of a lot of people who open Etsy shops. They want to be able to leave their 9 to 5 and make money pursuing their passion. I love this dream. I've had this dream.
While this is a great dream, and some people do accomplish this to an extent, I think you should have a realistic view of what this might entail. Let’s look at a case study.
Debbie has sold a few crocheted hats and is trying to convince her spouse that if she just had the time, she’d be able to make just as much money selling on Etsy as she does at her office job.
Debbie is making about $31,000 plus medical benefits.
Assuming that she’d need about $600 a month for private health insurance, we can estimate she’d have to have about $38,000 a year in income after her Etsy expenses.
So let’s say she is a careful shop owner and keeps her expenses down, and she only reinvests about 30% of what she makes into her business. She’d need to sell around $54,000 worth of items a year.
Let’s say she works just Monday – Friday and takes the weekends and a few holidays off, that means she’s working about 250 days a year.
That means every day she works she needs to make and sell $216 worth of hats. If she prices her hats at $20 each, she needs to make – and SELL – 11 hats every day she works.
I don’t care how good you are at crocheting; that’s too many hats to make and sell in a day.
So you can't make a living off of Etsy?
Maybe you can make a living on Etsy.
Realistically, how much could Debbie make? Even if she could make and sell two hats every day and only reinvest 30%, she’d only be taking home about $7000 a year, and she’d be still be working a LOT.
Forget about the fact that this is a very saturated market. Realistically I’d say she could probably make a couple of thousand dollars of income a year IF she was VERY lucky and did some amazing marketing.
It’s rare, but certainly not impossible to make a living using Etsy.
There are some people who are very successful selling on Etsy. I do personally know one person who makes a very good full time living from their Etsy shop alone. I know many others who use Etsy as just one part of their income plan.
One of Etsy’s success stories featured in its seller handbook is Big Stuffed, which opened in 2014.
Her shop shows 9650 sales at the time I am writing this. Most of her items are over $100, so let’s just take an average price point of $150 each.
That would give her an income of almost $600,000 over 3 years!
That’s definitely a success! But if you read her about page, the items are being made by seamstresses – multiple – which means that she is really running a small business.
Could she be making a 6 figure income selling on Etsy? Possibly. But she has also taken on a very different role as a small business owner and designer. She’s not actually making her products anymore.
And that may be fine with her, I’m not knocking that, but that’s a different dream than the one many Etsy sellers have.
Can you be that successful on Etsy?
If this is more along the lines of what you’d like to be doing, Etsy does allow both supply shops and outside manufacturing now. These may be a more lucrative way for you to go. There is a higher margin when selling items that you haven't actually made, because the time and work portion of the puzzle is removed.
There are some members of the groups I belong to that bring in over six figures in gross income yearly. But that doesn’t mean they’re making six figures, just selling that amount of product.
They may be taking home about $60,000 a year after all of their business expenses, but many of them are working 80 hours a week. If that’s the case, they’re only making $15 an hour.
If they’re only taking home $50,000 a year, they’re only paying themselves $12.50 an hour. After removing taxes and benefits, even this isn’t a lot of money.
Now I’m not trying to belittle the hard work these people have put into making their businesses a success. It’s incredibly admirable! But this level of success is not the level most Etsy sellers reach, and it’s important to remember that and set realistic goals.
So is Etsy best as just a side hustle?
I believe that it is possible to earn excellent money selling on Etsy, but I also believe that it must start out as a side hustle. If you’re looking for some supplemental income doing something that you love and you’re open to learning things like SEO and marketing and good photography, I say go for it!
If you’re only looking to pay a couple of bills with extra income while staying home with young children, or taking a break from the corporate world, try it! Invest a nominal amount of money and do your best.
You may figure out how to to succeed on Etsy, or you may figure out that there is a different path you should follow for financial independence. That's ok. There is so much value in the journey.
I’ve really enjoyed the journey and the learning experience of selling on Etsy, But I would never advise someone to leave their job to try to make it on Etsy, take out a small business loan or accumulate credit card debt to make their shop successful, or rely solely on Etsy as the main source of income for a family. A good business plan must account for multiple streams of income along with an Etsy shop.
My own personal income is made up of multiple things. I have an Etsy shop, sure. Eventually I may even have more than one Etsy shop. But I also work as a freelance writer. And I have two blogs. And I sell vintage items on Ebay. It's a puzzle, but it works. It works because it allows me to do creative things that I love while being able to full provide for myself and my family.
I’m afraid most of us will remain “starving artists” of a sort on this marketplace just because it is the nature of handmade items. It's important to have multiple sources of income, and multiple platforms and ways to sell your handmade items.
The Bottom Line: Being Successful Selling on Etsy is Not Easy
It is possible to create lasting, meaningful, and adequate income selling crafts on Etsy, but it's not guaranteed. There will be many who try and fail. But some, with the right knowledge and skills, will be successful selling on Etsy, at varying levels.
Don't be discouraged. I'm just giving you the facts here. Instead, be inspired! Dip your toe into the world of handmade craft sales, and see what you can do to succeed on Etsy.