A Useful Guide for How to Make Money On Etsy

Use these tips for how to make money on Etsy if you’re ready to start your own online business.

If you’re a crafter, you may have entertained the idea of selling your handmade items. It’s a natural progression for lots of people. After all, getting paid to do something you love sounds like a dream, right?

But, once you’ve plucked up the courage to take the plunge and start a business, you very quickly realise you have a lot more questions than answers. How do you get started? Where’s the best place to sell? How much will it cost? It can be quite overwhelming.

One popular way to ease into starting your very own handmade business is to create an Etsy store. In this guide, I’m going to break down all the important information you need to know about selling on Etsy. While I’m certainly not an Etsy expert, I have been selling on the platform since 2015 so I’ve learned a thing or two.

Selling On Etsy

What is Etsy?

Etsy is a global online marketplace that focuses on handmade or vintage items and craft supplies. Some of the popular things to sell on Etsy include jewelry, bags, home décor, art and even furniture.

So, how does Etsy makes money? You, as a seller are charged a USD $0.20 listing fee and that listing stays active for four months. If your listing sells, you are then charged a 5% transaction fee and a PayPal processing fee. They also charge fees if you choose to promote your products in their search and for their shipping labelling service.

Can You Make Money on Etsy?

Of course you can! There’s no limit as to how much you can make on Etsy. Some stores rake in seven figures a year and others only make meager earnings.

If you’re looking for a way to make money fast, this is not the right avenue for you. Running an Etsy store takes a lot of hard work — from creating or sourcing new products to taking amazing photos and responding to customer queries. It can take a while before you figure things out, gain traction and make that first sale.

Running any business, no matter the platform, is never easy though. It’s the persistent entrepreneurs that are willing to stick it out, try different things and learn as much as they can that do well. As long as you go into this venture with that in mind, you’ll reduce the risk of disappointment.

Pros and Cons of Selling on Etsy

There are many ways you could choose to start a handmade business — brick and mortar store, craft fairs, online shop or even other sites like Etsy. Each one has its advantages and disadvantages. Let’s explore some of the pros and cons of selling on Etsy.

Pros:

• Starting an Etsy store is relatively cheap and easy
• It provides a creative outlet if you’re selling your own handmade products
• You have the ability to work from home and on your own schedule
• You can earn part-time or full-time income
• Enjoy the fulfillment of running your own business

Cons:

• Turning your hobby into a business can suck the fun out of it
• It can be time-consuming to keep up with running your store
• There’s lots of competition
• Dealing with shipping can be a pain
• Possibility of rude customers and negative feedback

How To Make Money On Etsy

As I mentioned, selling on Etsy is not a get-rich-quick scheme. You’ll need to put in a lot of work even before opening your store. The good thing is you can always improve on what you started so even if you don’t get it right at the beginning, you can change.

Starting An Etsy Shop

Take some time and determine what products you’re going to sell in your store. I think it’s best to focus on a niche. Others may disagree. Being the go-to store for a specific product is a great way to increase sales. Also, it leaves you less scattered having to focus on tons of different items. You might also be able to spend less if you hone in on a specific product arena.

Decide on a target market. Are your products for men, women, children? What specific age-range are you targeting? Are your listings budget-friendly or high-end? What countries are you selling to? There’s a lot to think about here.

Name your store, get a logo, set your store policies and get your products ready. I’m not sure if there’s a recommended minimum number of listings to start with. I found varying articles and many seemed to recommend at least 10 items. The main point is you don’t want your store looking empty when customers “come in” to check things out.

Use Good SEO

SEO stands for Search Engine Optimisation and it’s basically how people find your products when they search on Etsy. Use keywords (a single word) or long-tail keywords (a phrase) that describe each product you’re selling. The easiest way to find keywords is to start typing in the Etsy search bar. This will populate a drop-drown list of popular terms people search for. You can then select the most relevant terms from the list.

Let’s say you made a Herringbone bracelet using SuperDuo beads that you want to list in your store. What keywords can you use to describe that bracelet so customers can find it as they search Etsy? Here’s a list of keywords I would use to describe this bracelet:

• Herringbone bracelet
• SuperDuo bracelet
• Beaded bracelet
• Handmade beaded bracelet
• Handmade jewelry
• Handmade beaded jewelry

You get the idea. I like to use a combination of more specific keywords relevant to the particular listing, as well as one or two more general ones.

Place these keywords in the following areas when creating your listing:

• Title
• Scattered naturally throughout your description – You always want to write for customers and not for the algorithm. In other words, don’t just list a bunch of keywords. Make sure to describe the features of the product and add in a few keywords wherever they fit.
• Tags

Use a combination of keywords that describe what you’ve made and includes terms that potential customers would actually think of when looking for an item like your bracelet. If you named your bracelet, “Elsie’s Bracelet”, there’s a strong chance it will never be found because no-one would know to search for that. You can always add the name you’ve given the item in the Title or Description, along with keywords.

There’s probably a whole lot more you could learn about Etsy SEO but those are some basics that you should keep in mind.

Check out my Etsy shop listings if you want live examples of how I’ve used keywords.

Take Lots of Photos and/or A Video

One downside of buying items online is that you can’t physically see or touch anything. The only way your customers get a sense of what a product looks like is through photos or a video.

Make sure you take lots of photos of your products from every angle so customers can see all the important features and details. Etsy allows you to add up to ten photos so take advantage of this. They even make suggestions as to what you should include in your photos e.g. one that shows size and scale and another that shows variations if your products comes in different colours or sizes etc.

You can also add a short video for each listing. This can be really helpful as you can show your listing actually being used or style it so that customers can imagine how they can use it. Get creative, experiment and see what works best for your particular audience.

Just make sure to follow the guidelines Etsy lays out. They tell you the best photo sizes and the video resolution you need to aim for.

Create More Products

When you add more products to your store, you increase the chances of customers finding something they want to buy. So, add more products.

After you have a more established shop, you can focus on your bestsellers and offer similar items. This can really increase your sales. I know of one Etsy store owner who started out selling all kinds of baby items but one day she realised that the majority of her sales came from one item — baby blankets. So, she hunkered down and focused her time on the item that her customers were actually purchasing.

How to Price Etsy Listings

Pricing is challenging and I’ve always found that people who sell handmade crafts seem to undervalue their products. They’re scared that people would be turned off if they charge “too much”.

Perceived value is a huge thing to keep in mind. Would you expect to go into a department store and pay the same price for a cushion cover that was mass-produced as the one you had custom-made from an Etsy shop? I bet you wouldn’t. That handmade one should be more expensive, right? If I see a really cheap handmade item, I would probably assume it’s poorly made or the maker used inexpensive materials. The point is cheaper isn’t always better.

Check out your competition on Etsy. Look at the sellers who offer items similar to yours and see what they sell their products for. You can stick to that price range or you can ignore it completely. It’s your business, it’s up to you. You really need to know what it costs for you to run your business and how much profit you need to make. What did it cost to purchase supplies or inventory, do you rent a space for your business? All of your business costs need to come into play when you calculate pricing.

Here’s a guide about calculating prices for your Etsy merchandise.

Your pricing strategy should also attract the type of customers you want. More mature, financially-sound customers can afford more expensive items and people who enjoy custom, handmade or vintage items are usually willing to spend a bit more. You probably wouldn’t find a ton of thrifty shoppers frequenting Etsy anyway.

Offer Good Customer Service

Customer service will always be a part of every business. Your customers will have questions about your products, sometimes even if you have the information listed in the product description and problems will arise that you’ll need to resolve. Make sure you do your best to offer excellent customer service.

• Respond to customer messages as quickly as possible
• Be courteous when interacting with customers, even if they’re being rude
• Have clear store policies including a refund policy and abide by them
• Set expectations for shipping — where you ship to, how long it takes for you to make and ship items, expected shipping times to different locations, free shipping or additional shipping costs

Encourage Reviews

Customer reviews can encourage others to purchase from your store too. Of course, you want to have as many 5-star reviews as possible so other customers know you sell quality products and that you offer great service.

Encourage your customers to leave reviews. You can ask them to do this in the “Message to Buyers” section. This is the message that they see once they have made a purchase. You’ll find this in Settings > Info & Appearance > Scroll down to Message to Buyers or Message to Buyers for Digital Items and fill out the relevant section. You might also want to include instructions for how customers can go about leaving a review as this is not something everyone might know.

Advertise Outside of Etsy

“Build it and they will come.”

I’m sure we’ve all heard this and I certainly wish it was still true. Sadly, this doesn’t work. Maybe there was once a time when it did, but now you have to drive traffic to your shop if you want to make even money with Etsy. If you’ve done a good job on your Etsy SEO, then you’ll naturally get traffic just from that but never put your eggs in one basket.

Use social media or websites such as Facebook, Instagram and Pinterest to drive people to your online store. Show off new product listings or advertise key features about what makes your bestsellers so great. Consistent advertising on other platforms can help a different group of potential customers know that your store even exists and what you sell.

Etsy statistics will show you where your shop traffic comes from. This is a great way to double down on the platform that’s generating more traffic or you’ll know if you need to put in a bit more work to gain traffic from a different area.

Never Stop Learning

Learning how to make money on Etsy takes some research, as well as trial and error. What works for one person may not work for you. It’s important that you learn all you can about the platform and see what you and your customers like.

A great place to learn about Etsy is from Etsy itself. Sign up for their newsletter or read the sellers handbook. The platform is always changing and growing and you’ll need to keep up with that if you want your business to thrive.

You can also follow people online who use Etsy themselves. Be very careful doing this though. Not everyone who claims to know about Etsy, actually does. They may not make any money or they may be following outdated practices that no longer apply to the marketplace today.

Be patient. Give yourself grace and you will learn how to make money on Etsy. Hopefully, this article has been a good start.