How To Become An Etsy Seller
So you want to be an Etsy seller. You’ve heard of it, you know that people make a lot of money selling their creations on Etsy, and now you’re ready to jump in. But how?
First things first: get yourself a clear idea of what you’re trying to sell. Is it art? Crafts? Handmade goods? Once you figure out your niche, it’ll be much easier for you to market yourself as an Etsy seller.
Next, decide what kind of store you want to set up: a shop or a showcase? As an Etsy seller, your options are limitless—you can have both! A shop is similar to an Amazon storefront, but with more features and functionality. Showcases are smaller than shops and are better suited for selling one-off items like knickknacks or jewelry sets rather than multiple items from one category (like pillows or handbags). Either way, the key is making sure that your store reflects the vibe of your brand so that customers know exactly what they’re going into when they visit your page!
How To Become Etsy Seller
What is Etsy?
Etsy is an e-commerce platform that specializes in the buying and selling of artistic goods, collectibles craft supplies, and vintage items difficult to find in a traditional online store.
Buyers on Etsy browse their marketplace to find handcrafted products rather than mass-produced goods.
It is also an outlet for part or full-time small business owners such as art shops and artisan crafters with artistic skills to showcase their goods and sell to a broader audience without needing their own website like with Shopify.
It is a hybrid company that combines the excitement of an art fair with a marketplace like eBay.
People who look for products on Etsy will find vintage and handmade items, made-to-order works of art, hand-printed clothing, custom-made children’s toys, and more.
There is a major category of vintage products for sale on Etsy. For items to qualify as vintage, they must be a minimum of 20 years old.
There is a wide variety of collector items that you can get for a reasonable price. The platform uses a particular storefront where an Etsy seller lists their products for a fee.
The unique niche that Etsy occupies makes it the number one platform for art items and collectibles in the world.
It is essential to point out that Etsy does not make the products. Instead, it acts like an intermediary connecting both buyer and seller, bringing them to one marketplace. Etsy has a central headquarter in Brooklyn, and this is where it carries out daily operations.
The company also has a crafting class known as Etsy Labs – a class where people learn and improve their artistic skills.
With an Etsy app that is available on both iOS and Android, you can also get the most of Etsy on the go.
How Much Does it Cost to Sell on Etsy?
It costs $0.20 to set up an Etsy account and list an item to the marketplace. According to the seller handbook, a listing will remain active for four months or until the item is sold. Once an item sells, a 5% transaction fee occurs on the sale price.
Many people pack up shop after a mere month because of little or no sales. And the worst part is that you keep running expenses based on your listings. Therefore, it is crucial to consider the long-term revenue to cost ratio.
This is especially true when you have many products to sell. So how much does it cost to sell your products on Etsy?
Let us find out.
1. Etsy Store Cost.
An advantage of Etsy is that it cost a seller nothing to set up shop. Yes, opening your store on Etsy is free. But that is where the free stuff ends – at least for now. This is because Etsy has a standard listing fee of $0.20 per item. This listing fee is for four months. But let us talk about the listing.
Etsy has a listing different from other online market giants. For this online marketplace, a listing and a product are not the same things. This is because a listing can contain multiple products.
For example, if a seller is selling a hat, and the hat has different color schemes, the seller is only obliged to create “one listing” to cover the different color variety while giving buyers the choice of selecting a hat with any of the colors.
So if the seller has 100 items of that hat, and they come in different colors, the seller creates only one listing to cover them all, updating the quantity as the sales come in.
Every four months, the validity of a listing runs out. It is now up to the seller to either renew the listing automatically or manually at the same $0.20 per listing. Although allowing the store to renew itself automatically can make good sense for a first-time seller who has not yet grasped the financial basics of running an online store, it makes even more sense – at least from a financial angle –to renew the store manually.
This way, you can study the data to find out which products are making sales and turning out a profit, and which products are taking a loss before you renew your listing for another four months. Take note that the cost of each listing remains $0.20 per list.
This means if there are 100 listings in your store, you are liable to pay $20 every four months. This becomes a problem if you are not making any sales because the $20 keeps adding up in your expense sheet, which could also include the cost of crafting your product in the first place.
2. Is The $0.20 Cost All There Is?
Many show owners confuse themselves on how to remit the $0.20 fee when the sales come in. They forget a listing differs from a product and that the charge for listing and the renewal fee for the store depends on the number of items on sale. See these examples for clarity:
Example 1:
A seller has an Etsy handcrafted table store. In that store, there is only a single handcrafted table for sale. The table sells, and the seller opts not to renew the listing or craft another table again.
The seller pays is $0.20 to list the table. Since the table has sold, the seller is no longer charged a listing fee (although there are other fees which we shall explain later).
Example 2:
A seller creates handmade sweaters available in five different colors. When the seller creates a listing, there are six pairs of the sweater in stock. So for the following four months, the seller will pay $0.20 for a listing of those six pairs of sweaters.
If there are no sales within that period, the seller gets another charge of $0.20 for renewing the listing.
But if the seller sells one of the sweaters, everything reverts to zero and the listing will auto-renew for another “fresh” 4 months for the remaining five sweaters. If the seller adds more sweaters to the quantity available, or the seller has new colors of the sweater and would like to display new pictures of those colors, the seller can edit the listing at no extra cost.
Each time the seller makes a sale, the stock renews again and again until they sell all available sweaters or the 4-month period ends with no sales.
However, if a buyer purchases three pairs of sweaters from the seller in one order, the seller will get an extra charge of $0.40 alongside the earlier $0.20 for three listing fees.
Finally, the listing auto-renews itself again even though three sweaters got paid for in one transaction.
3. What is the Etsy Transaction Fee?
Just like eBay, and Amazon, there are Etsy fees that a seller has to pay to keep doing their online business. First, a seller will pay Etsy a 5% transaction fee of the sale price whenever an item is sold.
4. What Does it Cost to Promote on Etsy?
Etsy users can also choose to create promoted listings and advertise their products. The minimum to get started is $1/day and it is based on a cost per click model. When a user conducts an Etsy search, there are both paid and non-paid listings. The only difference that buyers can see in promoted listings is the small, white “Ad” in the top left corner of the image:
It’s usually challenging for a new seller to make waves on Etsy out of the gate, especially when launching a new product. Investing in Etsy ads to gather more visibility may not be a bad idea to test out your product’s market viability. Once you start promoting, you’ll get access to a dashboard where you can view your stats.
I recommend you set a maximum cost per click (CPC) between $0.10 – $0.50 per click to start testing results.
5. What Are the Etsy Payment Processing Fees?
When a buyer checks out directly on Etsy and uses the Etsy payment system, Etsy charges a payment processing fee of 3% + $0.25 per transaction.
Also, depending on the seller’s location, there could be extra expenses in the form of taxes, including the cost of converting the local currency where the items listed are not in US dollars.
6. What About Etsy Shipping Costs?
Usually, the buyer pays for shipping. The cost will depend on the location of the buyer. Often, problems arise in situations where the shipping fee is not properly calculated, and the seller realizes they have to pay more for shipping than originally intended.
If this happens repeatedly, it could significantly increase the total cost of doing business on Etsy, especially when the cost of insurance is included in the shipping charge, which drives the cost further.
A solution is to do the research and find out exactly how much shipping items to different locations will cost. Shipping is never free on Etsy or any other online shop. Etsy sellers who offer free shipping should be prepared to include the cost of shipping into the sale price. On another note, sellers can purchase USPS shipping labels directly on Etsy.
7. Final Thoughts on Etsy Pricing.
It is tempting for you to think it’s only 20 cents to start selling on Etsy and rush to open a shop.
Before starting an Etsy shop, it’s smart to have a clear understanding of the total fees required to both list and sell your products.
The total cost of setting up shop on Etsy includes the listing fee, transaction fee, payment processing fee, shipping fee, and any promotions you take part in.
Also, remember none of this includes the cost of goods sold (COGS). So if you price your items too low to attract more buyers, you may eat into your profit margin and sell online products at a loss.
There are always external charges to consider if you want to manage your business properly. Get a spreadsheet ready to track your inflow and outflow to be adequately informed on what is going on in your business.
Try not to get ahead of yourself until you see a decent return on investment (ROI). It’s important to incrementally scale up your business rather than get too aggressive with pricing right away.
As you keep selling on Etsy, you’ll get the hang of the fees and adapt your business accordingly.
How to Sell on Etsy.
Etsy makes the process to start selling easy. Here are the steps on how to sell on Etsy and set up your own online shop.
1. Go to Etsy.com to Get Started.
Visit the Etsy homepage, click the Sell on Etsy link, then click Open your Etsy Shop.
2. Customize Your Shop’s Settings.
Being your own shop manager, you can set your shop preferences for how you want to sell your products. Select the language for describing your products, and the currency for trade, include your location, etc.
3. Select a Shop Name.
This is the part where your creativity can come into play. You should come up with an Etsy shop name that reflects your personal brand. Your name should be synonymous with your product offerings and easy for customers to remember. The name needs to be between four and twenty characters with no spaces or special characters.
4. Start Listing Your Products.
Follow these steps to set up your product listings:
Add Photos: Etsy sellers are advised to have a minimum of five photos for each item, to be taken from different angles so buyers can have a proper idea of what your product looks like. The pictures should be of high quality and shot with a nice background.
Adjust thumbnails: Thumbnails are the first pictures a buyer comes across when they search or stumble upon your product. These dictate the look and feel of your shop, so make sure they are consistent and match your brand.
Complete your listing information: Your product description should have a title and description that describes what it in detail.
Also, make use of the 13 ‘tags’ available for each product. Buyers look for products on Etsy based on keywords, so make sure these keywords match what is in your tags.
