How to Start an Etsy Shop: Tips for Beginners

Starting an Etsy shop? If you've been thinking about making extra income or transitioning from a 9-to-5 job, you're not alone! Etsy, a popular online marketplace, offers a fantastic opportunity for entrepreneurs. With products ranging from handmade to vintage and digital items, you can get your Etsy shop up and running by listing and selling products for less than $1!

Between 2019 and 2023, the number of sellers on Etsy has tripled from just over 2 million to more than 6 million. At the same time, sales on the marketplace have increased from roughly $1 billion per quarter to approximately $3 billion per quarter. 

Choose products to sell

First, you'll want to identify products for your Etsy shop. This will help you with creating a brand name, writing an engaging “About Us” section, and choosing how to market your products.

There are many different products that you can sell on Etsy, and they fall into two categories: physical products or digital products.

Physical products

Physical products, such as handmade jewelry, toys, vintage clothing, home decor, and more, have much larger demand on Etsy. You can find buyers with minimal advertising cost by having beautiful photos and engaging product descriptions. Additionally, handmade or customized products may be easier to differentiate from the competition and harder to replicate. 

On the downside, physical products require storage and shipping. Shipping takes time and money, requires having a stock of envelopes and labels, and making regular trips to the post office.

Digital products

Digital products, like print-on-demand products or digital templates for things like budgets or resumes, are wonderful for passive income. Once you’ve created the product, there may be minimal additional work as sales come in, but there’s nothing to ship and no additional products to make. 

There are significantly fewer buyers searching Etsy for digital products compared to physical products. You may also find yourself competing with online influencers that give away similar products for free while trying to build a following.

Print-on-demand is a “middle ground” rising in popularity. You create unique designs and upload to Etsy. The Etsy listing can link to print shops. After that, the buyers choose to print your design on an item, like a t-shirt or mug, and the print shop does all the printing and shipping while you get a cut of the sale. 

When choosing products to sell, it is important to consider your interests and skills. It is also important to do market research to see what products are popular and selling well.

Related: How to sell on Shopify

Conduct basic market research

As you consider products to sell, you should do market research to see what other sellers are producing and charging. You can use Etsy's search bar to find similar products. Click on these products and observe review counts and sellers’ total sales. Note that most buyers don’t leave reviews, but more reviews typically means that item has sold more frequently. 

If there is nothing on Etsy similar to what you’re selling, this could be a good or bad sign. On the plus side, you’ll have minimal competition for the buyers that are there. Additionally, if you advertise on social media, you can direct them to Etsy without worry of them choosing another seller on the marketplace while gaining Etsy’s brand value and safety.

However, it could also be a sign that there’s no much interest in the product you’re considering. It’s possible there simply aren’t many customers searching for such products (previous buyers may have searched, found nothing, and not returned). 

Set up your seller account

To create a seller account on Etsy, you will need to provide basic information, such as your name, email address, and payment information. You will also need to choose a brand name and create an “About Us” description for your shop.

• Step 1: Create an Etsy account; you might want to use a different email address that is specific for your seller account. 
• Step 2: Under My Account, click “Sell on Etsy” and follow prompts to confirm your account. Then, update your information under Account Settings.
• Step 3: Next to “My Account,” click on the “Shop Manager” icon, then click “Let’s Get Started” and follow the prompts. You can explore suggested help articles or just skip ahead.
• Step 4: You’ll be prompted to enter your unique shop name and create your first listing. You want your shop name to be easy and unique enough for friends and shoppers to remember. A product-specific name (e.g. Mary’s Beaded Necklace Shop) is great if you only ever sell that one type of product, but could make things more difficult if you want to expand to more products later. 

Creating effective listings is the core to being successful on Etsy, so let’s dive in. 

Related: How to start a side hustle

Create engaging product listings

The three most critical parts of your Etsy shop listing are the title, photos, and keywords chosen.

As buyers search for products, they face a menu of hundreds, or even thousands, of listings. Realistically, buyers are not going to read detailed descriptions of each product. Instead, they’ll likely scan product photos and titles to determine which small number of listings they want to click on for additional details. 

Titles

A descriptive, detailed title will give potential buyers a clear understanding of the type of product you’re offering. If you hit the right notes (learn more about keywords below), you’ll give them the confidence to click into your listing to learn more.

Photos

Beautiful photos will catch the buyer’s eye as they’re scrolling. Inside the listing, consider having a wide range of photos including:

• Pure white backgrounds displaying only the product
• The product in a natural environment or on a model
• Videos so that customers can observe the product “in real time”

Keywords

When you create your listing, Etsy allows for roughly a dozen keyword tags that you can use to identify your product. When it comes to keywords there are common terms, like “sunglasses” or “bracelet,” and long-tail keywords, such as “vintage heart-shaped sunglasses,” or “personalized braided leather bracelet.” It’s important to have a balance of both types of keywords.

With common keywords, your product will be relevant for many, many searches. However, you’ll also be facing an incredible amount of competition from possibly thousands of other sellers, and your listing may not show up until the 10th or 20th page. This is especially true for new sellers without many positive reviews. 

With long-tail keywords, which are very specific and less common, you may show up in fewer searches, but your listing will likely be positioned much higher for the very buyers that are looking for exactly your type of product.

Etsy considers keywords in both the product title as well as the listing tags. 

Tip: Add new products to your shop on a regular basis. This can help you attract new customers who may be looking for slightly different products, as well as earn you repeat sales from existing customers already satisfied with the quality of your products.

Pricing and Fees

As you create the listing, you’ll need to choose a product price and shipping method. Make sure your price is chosen to cover all your costs! Etsy fees include:

• Listing fee of $0.20 per four months 
• Selling fee of 6.5% of listing price + shipping (excludes taxes)
• Payment processing fee: 3% + $0.25 in the US
• Shipping costs for physical items
• Advertising expenses if choose to advertise (you don’t have to)

Suppose you’re selling a handmade bracelet on Etsy and offer free shipping to attract new customers. You list the bracelet at $20. That doesn’t mean you’ll pocket $20 with a sale. Let’s take a look at how pricing and fees can impact your overall profit. 

• Materials cost: $3
• Shipping cost (to you): $4
• Listing fee: $0.20
• Selling fee: $1.30
• Payment processing fee: $0.85 

That means it’ll cost you $9.35 to make and sell that bracelet, leaving you with a total profit of $10.65 per sale.

Advertising will reduce your profits per sale, but you may gain many more sales. This may be particularly important early on for a new seller with very few reviews.

Tip: Underprice your products early on to drive 5-star ratings. You can gradually increase prices to improve profitability.

Market your products

There are a number of ways to market your Etsy shop. Here are a few tips:

• Use relevant keywords in your listings and titles. This will help people find your listings when they are searching Etsy.
• Post about your products on social media. Use platforms like Instagram, TikTok, Facebook, and Pinterest to reach a wider audience.
• Run Etsy ads. Etsy ads can help you get your listings seen by more people. This will increase your selling costs, but can also increase your sales dramatically. Start slowly, monitor your ad performance and adjust your campaigns as needed.

Sell, ship and make money

Most new sellers begin by shipping products themselves. When you make a sale, Etsy will provide you with a shipping label that you purchase using funds from your sales. The cost of the label is typically at a discount to what you’d pay walking into the post office. When you start, you can print the label at home using a standard printer; as you scale and make more sales, investing in a thermal 4×6 label printer saves a ton of time and headaches.