The next platform in our eCommerce series of options for small business owners is Etsy, “a marketplace where people around the world connect, both online and offline, to make, sell and buy unique goods.”
Etsy is a worldwide market where artists and crafters sell their own handmade and vintage goods and supplies.
The Etsy marketplace has its own “style” that’s influenced by its mission statement (below). You should look around on the site if you aren’t familiar with it and get a feel for what is successful on Etsy as not all products are suited to this platform. The very first step to considering Etsy is to make sure your target customer might actually look on Etsy for the types of products you’re selling.
Other popular platforms draw their own types of buyers and might be able to offer a different experience to your target audience. Amazon has recently announced “Handmade at Amazon” which is similar to Etsy as a space for artisans to sell their own handcrafted goods, but also has a global reach and a gigantic eCommerce presence. There’s also eBay, the inspiration for the original eCommerce market that sells any type of product to anyone, mass-produced or handmade.
First, a background on Etsy
Etsy was founded in 2005 in Brooklyn, NY as a way for a community of crafters and artists to sell their vintage and handmade goods online. Over time, this site has transformed into a sophisticated, eCommerce platform that connects sellers and buyers across the world.
Etsy’s mission is to build and run a company that combines it’s cultural and environmental sensibilities with its business goals.
Their business model is based on “shared success.” Etsy makes money when sellers make money. Currently, there’s a $0.20 USD listing fee for each item and a 3.5% fee for completed sales. Additional revenues come from added services that sellers purchase.
Etsy sellers range from hobbyists to professional merchants who are entrepreneurs, building businesses that support them full-time, and have helped turn Etsy into a global marketplace for handmade and vintage goods.
Why Sell on Etsy – Benefits of the Etsy Marketplace
Etsy is a ready-made platform where you can sell without any technical knowledge. Through Etsy, merchants can immediately offer their customers an option to buy online, and Etsy is an established brand they may already be comfortable with.
Etsy – and easy to use platform for eCommerce
Because all the security issues and requirements for credit card transactions are handled by Etsy, merchants don’t need to worry about being responsible for compliance and regulations.
- Etsy also offers direct checkout if you’re selling in person and need to be able to use a credit card reader on your phone.
It’s REALLY easy to set up your shop. Setting up shop is as easy as: choosing your shop name; adding your policy information and a detailed description of what you sell; listing your products (each listing costs $0.20 and when you sell an item, Etsy takes 3.5%) and selecting which types of payment you’ll take.
- Etsy recently introduced “Pattern,” a seller service which can create a custom site in minutes, with your own logo, colors, and brand. If you’re not handy with graphic design, you can select from existing themes and established color palettes and then customize the site to get the look you want.
There’s even a mobile app for iPhone, iPad, Apple Watch (running iOS 8.0 or above) and any devices running the Android operating system (running 4.0, Ice Cream Sandwich or above). Apple apps are available in the Apple App Store and Android apps can be downloaded from the Google Play Store.
- As a seller using the mobile Etsy app, you’ll get notifications of queries from your store or anytime someone “Favorites” or purchases an item. You can use it to list products as well as using your phone for a mobile POS (there are mobile fees from Etsy). Be aware that there are other options for mobile POS selling through companies like PayPal as well. Selling through Etsy’s mobile app is not the only solution.
Etsy integrates shipping with their platform—shipping labels are available to make it easier to send your sold items to the customers. Once an order is placed, you can purchase a label from the order management area in your shop. This is especially handy for mailing to international buyers.
- Shipping options can be set up per item, or via shipping profiles that can be assigned to individual items.
- Etsy also provides an automatic calculation of shipping costs (a much-requested feature that was released in 2015, to the thrill of many Etsy shop owners).
You can enhance the exposure for your listings using the Promoted Listings feature, where you bid for advertising space in the search results for Etsy. Depending on the outcome of your bid, your items appear in the row of Promoted Listings in the search results page above the regular search results, where you may or may not show up organically.
Support from other sellers is available in Etsy forums where you can share ideas, get advice or marketing tips and chat with other sellers around the world.
Disadvantages of Selling on Etsy
Selling on Etsy is easy, but it’s not free. Each listing costs $0.20 and Etsy takes 3.5% of each sale. In order to keep your listings “fresh,” and seen, you’ll want to renew them on a regular basis to have them come to the top of a search. That means another $0.20 listing fee each time. Other fees include credit card processing fees, shipping labels, and $15/month for a pattern site if you choose to create one. Promoted ads to increase exposure add to the cost.
Etsy is: not free, takes work, and can be limiting
If you are not selling handmade, vintage items, or crafting supplies, this is not the place for you.
- Etsy is strict that items sold on their site are made by the artisan and not resold from another source (although there have been complaints from the Etsy community that Etsy is not as strict on enforcement as they should be).
If you don’t already have a ready market (i.e. people who know you and already buy from you), it can be difficult to be found on Etsy.
- You’ll need to list a number of products (at least 30, and the more the merrier) to gain traction.
- You will need to renew, and / or add listings daily to keep your products on the top of search results.
One-off products are not a good fit. This market works best with products that can be easily made over and over. Some variations are possible, but stock management with a lot of variation can become quite complex, and difficult to promote.
- It’s more effective to have a base product, allow a specified set of customizations (such as color or size) to the product and encourage people to request customizations via a custom order. That way you list and maintain a general item, and can fulfill custom order requests from that one listing.
If you are already selling on another platform (perhaps your own site), you’ll need some kind of tool to manage your stock between the two.
- You’ll also need to be aware of “duplicate content” issues (where you copy and paste the same descriptive text on both sites – not a good idea). You’ll need to write unique copy for each site/product.
Getting your listings to show up on Etsy is hard work!
The first page of search results shows the most recent, popular, highly reviewed products in your store… If you aren’t listing a new product every day, promoting your listings, renewing them regularly, and don’t have ample positive review on your products… you will not be found at the top of the results and will likely not sell as much as you think you should. You’re giving Etsy money on a regular basis and not doing any better than if you simply tell people to go to your Etsy shop and order what you need.
Probably the biggest concern about selling your products on Etsy’s site is that you will not have the ability to (automatically) add your customers to your mailing list or mine that user information to improve your descriptions or upsell to other products. All communication with your customers is limited to Etsy conversations, and then to marketing materials enclosed in your packaging.
- You can follow up manually (via an Etsy conversation) and request them to review your product or sign up for product promotions via your newsletter.
- You can add marketing materials inside your packaging, and hope the buyer will act on those limited offers.
Should you Consider Selling Directly from your own Website, or from Etsy?
While there are a lot of benefits to selling on Etsy, promoting your OWN brand instead of the Etsy brand is always a good thing. You’ll be driving traffic to your own site, building brand awareness and showcasing your own products instead of promoting a marketplace that is as focused on your competitor’s products as it is on your products.
Selling from your own website:
As outlined earlier in this eCommerce platform series, WordPress offers a great tool for eCommerce through the WooCommerce plugin. You will have a bit more work in the initial setup vs an Etsy setup, but the benefits can be well worth the effort.
- Be sure that your website design is “responsive,” meaning it automatically adjusts to whatever device your buyer is using at the time. The vast majority of buyers will move between their laptop, phone or tablet when they’re considering a purchase and you want them to have the best possible experience on each device.
- Be smart about promoting your website and keeping it current. If you’re urging buyers to view your products on your site, you need to ensure that everything is working well (links, navigation, buttons, etc.), you’re keeping the content fresh (adding new products/descriptions, educational materials, blogs, etc.) and promoting your brand/website online and offline (social media, festivals, craft fairs, etc.) to draw people to it.
In addition to having full control from the start, your own site will become a platform that you can grow as your company grows. Quite a few successful merchants end up leaving the Etsy platform in favor of their own site:
Why I Quit Etsy
Sophie from The Private Life of a Girl
How Etsy Alienated Its Crafters and Lost Its Soul
Grace Dobush on Wired.com
Why I Left Etsy
Lorena Haldeman of HaldeCraft via Marketing Creativity
Selling on the Etsy Marketplace:
Etsy can make it very simple for you to sell online and not have to manage any software, comply with credit card payment requirements, hosting or any other technical aspects associated with having your own website.
- Your products will be accessible to Etsy’s global audience, but so will your competitors’ products. It’s a crowded market, but it can bring your products to a vast number of visitors if you put in the effort it takes to keep your products on top.
- Etsy provides a global version of the neighborhood or farmer’s market for handcrafted goods. It’s a very popular space for connecting consumers with handmade vendors. Here are just a few statistics to give you an idea of their reach:
- As of March 2015, Etsy has 54 million members
- 25 million shoppers are active buyers and there are 1.6 million sellers
- Etsy is in 83 countries and as of 2015, had $273 million in revenue
And remember, all your Etsy listings must be handmade by you (you cannot resell), vintage, or crafting supplies. For more information on seller policies, click here.
Answering the Question, “Should I Sell on Etsy?”
Etsy is a robust and customizable platform that has a worldwide following. If your main concern with eCommerce is the ease of setup, Etsy is your best bet. Just realize that you will need to learn to play the Etsy game in order to get your listings found and be successful on Etsy. If you are looking for a solution that will allow you to focus on your brand (and one that will grow with you as your business grown) then another solution such as WooCommerce might be a better fit.