What Is Etsy?

Definition & Examples of Etsy

Craftswoman working in her shop
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Alistair Berg / Getty Images

Etsy is an online marketplace that connects sellers with buyers. It is primarily used for selling vintage items, handmade goods, art, and crafts.

Learn how to open an Etsy shop and begin selling.

What Is Etsy?

Etsy is an online marketplace where vendors can connect with buyers. Sellers on Etsy typically sell a variety of handcrafted or vintage goods.

Products sold on Etsy include:

  • Arts
  • Crafts and crafting supplies
  • Jewelry
  • Paper goods
  • Housewares
  • Artisan foods
  • Small-batch cosmetics
  • Handmade personal care items
  • Clothing and accessories

Many artists sell digitally downloaded items, such as art prints, stationery designs, planners, or other printable documents.

Vintage items must be at least 20 years old to qualify. Vintage items sold on Etsy include costumes, clothing, accessories, jewelry, photos, housewares, games, books, and toys.

How Etsy Works

Selling on Etsy is simple and straightforward. However, it requires regular work and attention on the part of the seller to create listings that are searchable and appealing, as well as to provide good customer service.

  1. Plan: If you're crafty and considering Etsy, you probably already have items in mind you want to sell. If you're not sure, browse Etsy to see the creative goods being sold. Start with a single type of item for easier marketing and organization. As your Etsy business grows, your offerings can too.
  2. Register: Create an Etsy account and choose a username. Select a profile picture, write a bio, and fill in all remaining setup fields. Read all the terms of service and policies.
  3. Open: Once you have an Etsy profile, navigate to Sell on Etsy (located to the right of the search bar on any Etsy page) to open a shop. Select your language, country, currency, and shop name. To appeal to customers, you will want to have a professional user photo or logo, as well as a shop banner.
  4. Research: Most buyers on Etsy use search to find stores and listings, so you will need to use SEO best practices to show up in search results. Your store description, bio, listing titles, tags, and product descriptions should all use appropriate keywords. Take time to research similar products so you know which keywords to target. You should also research price points for similar listings to inform how you price your items.
  5. Stock: Once your store is set up, it's time to create listings. Include high-quality photos. Put your research to good use to create searchable listings with enticing descriptions. Set prices to cover the cost of supplies, as well as your time and your listing and shipping fees. 
  6. Sell: Monitor your account to see what kind of traffic you get. If customers aren't finding your products, you may need to revise your listings with new keywords or photos to increase sales. You might want to consider ads for specific keywords to drive traffic to your listings.
  7. Ship: 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.

Etsy doesn't require sellers to have a business license to open a shop. However, your city, state, or country may require you to have a license in order to sell and take payments legally. Be sure to comply with all local business and tax laws when you create your Etsy store.

How Much Does Selling on Etsy Cost?

There is no setup fee to open an Etsy shop. Instead, sellers are charged fees for listing and selling items.

Sellers must pay a $0.20 per item listing fee, along with a 5% transaction fee when the item sells. This is 5% of the listing price plus any shipping, personalization, and gift-wrapping charges you add on when the item is purchased.

If you are selling from the United States or Canada, the transaction fee is not applied to sales tax, GST (Goods and Services Tax), or HST (Harmonized Sales Tax). If you are selling from a location other than the U.S. or Canada, sales tax should be included in the price of your item and will be counted for the 5% transaction fee.

You can also choose to use additional services that come with fees, including:

  • Etsy Payments: comes with a processing fee, which varies based on where your bank is located
  • Etsy Ads: pay-per-click ads, which are placed automatically based on your daily ad budget and an "auction price" that is determined by the number of listings that fit the same search criteria
  • Shipping fees: option to purchase shipping labels through Etsy, fees vary based on the carrier as well as add-ons (like tracking and insurance)
  • Currency conversion: only charged if your listings are in a different currency than your payment account

Listings on Etsy renew automatically every four months unless you cancel renewal for a particular listing. When your listing auto-renews, you will be charged Etsy's standard listing fees.

Etsy automatically provides a monthly statement, at which time all fees are automatically deducted from your payment account. If there are sufficient funds in the account to cover your fees, you don't have to take any further action. If there are insufficient funds, you are responsible for paying all remaining fees within 15 days.

Do I Need an Etsy Shop?

Etsy provides a marketplace specifically for craftspeople, artists, and vintage vendors to sell their goods without needing a brick-and-mortar store or an individual e-commerce platform.

Etsy allows each seller to set up a customized online shop with full e-commerce capabilities on a platform that consumers already understand and trust. This can reduce your overhead, limit the time you need to spend selling through consignment stores and craft fairs, and make it easier to connect with customers all around the world.

Etsy is particularly convenient for selling downloadable items (printables). Etsy allows you to store the file on their platform so buyers can download it immediately from their Etsy account after the sale.

Alternatives to Etsy

If Etsy isn't the right platform for what you want to sell, there are other online marketplaces that you can use. Each one appeals to a different set of customers.

Each marketplace has its own listing design and fee structure. Be sure you understand how much it costs to sell thought a platform before you begin listing your items.

  • eBay is a virtual marketplace for buying and selling goods of all kinds. Sellers can list used and new items.
  • Poshmark is a marketplace for buying and selling fashion, including clothing, shoes, and accessories. Sellers can list used, new, or boutique items.
  • Mercari is a Japanese e-commerce platform that operates in Japan and the U.S. Users can buy and sell used and new items including clothing, furniture, electronics, vintage, and handmade items.
  • Amazon has a marketplace where third-party sellers can list many items, including furnishings, toys, electronics, books, clothing, jewelry, office supplies, personal care products, and more.

If you want to sell online without using a marketplace, you can also create a business website with integrated shopping, credit card processing, and e-commerce.

  • Etsy is an online marketplace that connects sellers with buyers. It is primarily used for selling vintage items, handmade goods, art, and crafts.
  • To sell on Etsy, you must create an account before you can open a storefront.
  • Etsy charges $0.20 per listing, plus a 5% transaction fee when an item sells. You may also have to pay other fees.
  • Platforms similar to Etsy include eBay, Poshmark, Mercari, and Amazon.

Article Sources

  1. Etsy. "Keep Commerce Human." Accessed July 13, 2020.

  2. Etsy. "Sell: What Can You Sell On Etsy?" Accessed July 13, 2020.

  3. Etsy Help Center. "Beginner's Guide to Selling on Etsy." Accessed July 13, 2020.

  4. Etsy Help Center. "Beginner's Guide to Etsy Search." Accessed July 13, 2020.

  5. Etsy. "Advertising & Marketing Policy." Accessed July 13, 2020.

  6. Etsy Help Center. "The Review System for Sellers." Accessed July 13, 2020.

  7. Etsy. "Fees and Payments Policy." Accessed July 13, 2020.

  8. Etsy Help Center. "How to List a Digital Item in Your Etsy Shop." Accessed July 13, 2020.