What Is Etsy, and Why You Should Sell (And Buy) There

Etsy IPO Opens On Nasdaq
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If you have or want to start a homemade craft business, Etsy is a resource to help you easily and affordably get started selling your items online.

What Is Etsy?

Etsy is an online buyer and seller community similar to eBay, except it focuses on hand-crafted or vintage goods. Most products sold fall into the category of arts, crafts, jewelry, paper goods, housewares, and artisan candies or baked goods. Many artists sell digitally downloaded items, such as stickers, prints, planners, or other printable documents. Vintage items must be at least 20 years old to qualify and can range from costumes, clothing, and jewelry to photos and housewares. 

What Does Etsy Have for Your Home Business?

While Etsy offers another avenue for selling your homemade goods online, there are many items on Etsy that can help you in your home business. Do you use Filofax, Erin Condren, or The Happy Planner to schedule your days and organize your business and life? You can buy downloadable inserts and stickers to use in your planner. Do you need promotional items with your logo printed on them? Many Etsy sellers can produce custom swag with your business name and logo.

Why Sell on Etsy?

In the past, most crafters and artisans sold their goods in person at fairs, open markets, and on consignment at local shops. While the Internet opened doors to reaching consumers beyond their local area, many crafters didn't want the hassle of setting up their own websitecredit card processor, or e-commerce platform in order to sell their goods online. While eBay and other e-commerce DIY sites helped, Etsy provided a marketplace specifically for crafters to sell their goods. Plus, if you're selling downloadable items (i.e., printables), Etsy allows you to store the file on their platform, so buyers can download it immediately from within their Etsy account after the sale.

Etsy allows each seller to set up a customized online "shop" with full e-commerce capabilities by using its simple setup wizard. It's easy, fast, affordable, and an effective way to reach consumers.

How Much Does It Cost?

Etsy offers a comprehensive e-commerce platform and payment system on which individuals can sell products. As of October 2019, there is no setup fee to open an Etsy shop. Your only costs are a $0.20 per item listing fee, along with a 5% transaction fee and a payment processing fee of (3% + $0.25).

For example, if you sell handmade necklaces that cost $10 each, and list four of them, the listing fee will be $0.80 (4 x $0.20). For each necklace, you'd pay a transaction fee of $0.50 (5% of $10), and payment processing fee of $0.55 (3% + $0.25), for a total cost of $1.25 ($0.20 + $0.50 + $0.55) per necklace sold.

You may have additional expenses outside of Etsy, such as packing materials and shipping costs.

Compared to the expense of setting up a website with a shopping cart, and getting a merchant account, which also charges processing fees, Etsy is an affordable alternative. Further, because Etsy is a known marketplace for handcrafted goods, it has a ready-made market of buyers.

How to Start an Etsy Home Business

Setting up an Etsy home business is quick and easy using the following steps:

  1. Determine what you're going to sell. If you're crafty and considering Etsy, you probably already have items in mind you want to sell. If you're not sure, visit Etsy to see all the creative goods being sold, including marketing swag, jam, jewelry, and more. Some people sell crafting supplies instead of finished goods. It's probably best to start with a single type of item instead of a hodgepodge of them for easier marketing and organization as you get started. As your Etsy business grows, so too can your offerings.
  2. Set up your Etsy account. Creating an Etsy account starts with selecting a username. Consider using a name that represents what you want to sell, while also keeping it open enough to expand your product line in the future. Next, fill in the account setup fields that Etsy asks for. Don't forget to read all the terms of service and policies.
  3. Set up and stock your Etsy shop. Once your store is set up, you'll need to add your products. Make sure you take high-quality photos and provide enticing descriptions of your items. Price your items in such a way that you've covered the cost of your supplies, as well as the time it took for you to create them and the fees you incur to list and ship them. 
  4. When an item sells, pack it up and send it quickly. Like eBay, Etsy buyers can leave reviews about you as a seller and the quality of the product. For the best ratings, provide professional customer service that includes information about how quickly the item is shipped and a way for the customer to get in touch with you if there is a problem.

Having a successful Etsy business is about balancing the time it takes to create your goods and selling them. If you can have a steady supply of in-demand products to keep your Etsy store stocked, you can build a successful home-crafting business.