Things to Consider Before Starting an Etsy Business

My Etsy business turned one this week! I can think of no better way to commemorate this milestone than to write a post that details what it takes to start an Etsy business. My Etsy shop, Doing It All Designs, has been a blessing to my family. I launched my Etsy shop in September 2019. I was hoping to make some extra lunch money to justify my extravagant lunch habit back when I was going into the office. Much to my surprise, my shop blossomed into something much more successful. In one short year, I have sold more products than 98% of Etsy shops. The money I have made from my shop has allowed my husband and I to save money for a new home during these uncertain pandemic times. I have had an incredible experience with Etsy. I want to encourage you to take the leap if it is something you are interested in. Before you take the courageous step of beginning an Etsy business, I recommend that you ask yourself the following questions:

Is Etsy the right platform for me?

Though Etsy is a great platform to sell on, it’s not for every e-commerce seller. I chose the Etsy platform because it had relatively low startup costs. It cost $0 to open a shop. Additionally, it only cost $0.20 to list a product on the platform. If you don’t have a shop yet, but you are ready to launch your shop, use this link and get 40 free listings (I’ll also get 40 free listings for referring you.)

There are other fees involved in running a business on the Etsy platform, such as transaction fees. You are charged a 5% transaction fee of the price displayed for a listing when it sells, in addition to the amount you charge for shipping and/or gift wrapping. These are the only mandatory fees. You can incur optional fees if you choose to participate in Etsy ads and offsite marketing. As a brand-new shop, you do not have to opt into either of these. As a new person to e-commerce and entrepreneurship with little startup money, the Etsy business model appealed to me.

Another benefit of selling on Etsy is that it has brand recognition and a built-in marketplace. People today are more familiar with the Etsy brand than they have ever been. Etsy promotes itself on television, Facebook, Instagram, and Google. In 2019, there were 39.4 million active Etsy buyers. There are millions of people visiting the platform every day with the intention of shopping. If you were to open a stand-alone e-commerce site such as Shopify, or WooCommerce, you would be responsible for running your business and driving all of the traffic to your site. Though I do some marketing to my Etsy shop with Pinterest, over 85% of my sales come from people finding me on the Etsy platform.

What should I sell?

The next thing we have to determine is if the products you plan to sell are appropriate for Etsy. The Etsy platform seeks to connect people looking for unique goods with independent sellers worldwide. Etsy’s products should fall into one of the following categories: handmade items, vintage items, or craft supplies. According to Etsy Seller Handbook, handmade items are items made and/or designed by the seller. Vintage items have to be at least 20 years old. Items in the craft supply category are tools, ingredients, or materials whose primary function is to create an object or a special occasion. If the things you plan to sell do not fall into these categories, you may want to look into a different platform.

The products I sell in my shop are printable cards, printable art, editable card, editable invitation templates, and product mockups. I have products that fall into each of these categories. Another thing to note is that I only sell digital items. I do not sell any physical products. Selling digital items is another way to keep costs low when starting an online business.

Who am I selling to?

Over 39.4 million people are shopping on Etsy, and while I want every single one of them to buy my products, my products don’t speak to all of those people. Typically, a little market research will tell you who you should be targeting as your ideal customer. A large portion of my sales is printable greeting cards. More than 80% of the people who purchase greeting cards are women. It is crucial to identify your ideal customer and gear your shop, your listings, your photography, your language, and your marketing towards them. My perfect customer is a woman, aged 30-40, with a family and a sense of humor. Some of the ways that I am intentional about attracting this person to my shop is by using elements of pink and glitter in my branding. That’s not to say that there aren’t men who appreciate the color pink and a little razzle-dazzle, but typically, these are things we associate with women.

Why should people buy from my Etsy Business?

While Etsy is a fantastic platform to sell on, many Etsy sellers will tell you that Etsy is oversaturated. In a market where there are likely hundreds or maybe even thousands of sellers selling similar products to what you sell, why should someone buy from you? What will be your WOW factor? How do you plan to set yourself apart from the competition?

For my shop, it’s all about customer service. I can’t control how many people in the market have shops like mine or sell products like mine. However, I can control how a customer feels after interacting with my shop. I try my darndest to make sure that I give the best customer service I possibly can. Some ways to do this are being responsive to customer and potential customer questions, sending a thank you note after a sale, being very clear in the product description, and having clear shop policies. I also make a point to send my customers a coupon after they shop with me. It is a lot easier to continue a good relationship with a previous customer than to entice a new customer. After all, you have already proven yourself to them.

These are some of the questions I believe you should consider before opening your Etsy business. Do you agree? Is there anything you would add? Let me know in the comments below.

P.S. For help growing your Etsy business, consider using some of these resources: