10 Top Tips You Need Before Opening An Etsy Shop
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Things To Know Before You Get Started With Etsy
What is Etsy?
Founded in 2005, Etsy is an online marketplace where independent artists and crafters can sell their work to gift givers and art lovers alike. Mainly associated with hand made goods, Etsy is home to over 3.4 Million active sellers who sell varying items; from art, to vintage and designer goods, clothing, toys, pet items, sewing and knitting patterns, stickers, cosplay – and even swords!
Is opening an Etsy shop a good idea for beginners?
Similar to sites like Society6, Etsy started with a group of artists and makers who found difficulty selling their work online. Whilst Etsy is not a Print-on-demand service, they become the middleman in giving smaller and independent creators a platform to find and attract consumers.
Etsy already comes with a specific, large base of customers who regularly use the site when they’re searching for something unique and special. As a beginner, this is ideal. You don’t have to start from scratch by building your own artist website, or starting an Instagram page where an audience can take a while to build. On Etsy, your audience is already there.
When you start selling on Etsy, you will have full control in what you choose to sell and how, when, and where your items are shipped. It’s also a fairly easy and self-explanatory website to get your head around, another bonus if you’re new to selling online. It gives you a platform to sell for yourself, and the experience to continue to do so if you wish to start selling on your own site in the future.
Things to consider before getting started on Etsy
Despite it being fairly straightforward to set up an Etsy shop, there a few things we think you might want to know before you embark on your Et-venture:
1. You can open an Etsy shop for free
We’ll get into the costs of running an Etsy later on, but when it comes to opening a store or making an account it is free – this means if you can build the foundation of your store without having to rush to make listings.
2. You can sell 3 types of products on Etsy
Etsy features these three main categories, Vintage, Craft, and Handmade items and will not allow you to sell products that fall outside of them. Worth noting is that the most popular shops sell jewellery, craft supplies, vintage clothing, wedding/party decorations and digital prints.
3. You should be 18+ to sell on Etsy
However, anyone 13 and above can buy and sell on Etsy, with direct supervision and oversight by a legal Guardian. This is because Etsy allows for 4 types of mature content: this includes profanity, sexual activity or content (including sexual wellness items), graphic violence, and explicit taxidermy.
4. The seller is responsible for handling the shipping and packaging
This may be dependent on where you live and where you are shipping to. You can offer free shipping on Etsy, but you should try to take shipping fees into consideration, as it can be quite pricey, and ultimately the shipping expense will be determined by the destination you’re shipping to. Charging a shipping fee may deter some customers, especially if their country makes them pay for customs on top.
A good way of getting more sales is to try factoring the shipping cost into the actual product pricing so that a customer is drawn in by the ‘free shipping’ label, but you are not left out of pocket.
Something else to note; Etsy doesn’t hold sellers responsible for items that are lost in mail. But your buyer receiving their purchase is very important, so do your best to help them where you can. As a seller, you have the option to send a replacement item, or a refund for the missing order. Anything to help build relationships with your consumers is good, you want positive feedback as it can aid your business’ success in the long run.
5. You will need to pay Tax IF you sell more than £1,000 in a year on Etsy
As within any business it needs to be registered. The rules and regulations have changed since the start of the pandemic, this can be somewhat tricky if you are a beginner – so don’t worry about this too much, but do your research. That being said, please educate yourself on your country’s tax system, as it differs everywhere, and can vary with age.
Getting your Etsy shop ready
If you’re new to selling your art online but have already set up an Etsy store, you may already know it can be a struggle to make those first sales, even if you feel like you’ve done everything right. Follow these tips on how to make more sales on Etsy, and you’ll begin to see your sales pick up in no time.
6. Ask yourself the tough questions
These are all key questions that you need to ask yourself before getting started:
- How many people are selling a product like yours?
- How much will you price it for?
- How much time will you be able to dedicate to your store?
- How much time can I spend on making?
- Are they made to order?
- How long will it take you to photograph the product?
- Have you prepared product descriptions?
- How will you promote your product?
- Will they be ready to ship when you get an order?
- How long will wait times be?
- Will you be doing this by yourself?
- How will you be shipping?
- Are you prepared to ship internationally?
- How much will packaging cost you?
It’s important to have an understanding of what goes into opening an Etsy shop, since this could be the start to a whole new art business for you. It can be difficult to fully grasp how much time and effort you will need to put into your store for it to be successful, so these questions should help to ease any concerns you have.
4. Develop a brand with consistency
One of the first things you will need to do when setting up an Etsy shop is decide on a name for it. Store names that are short, easy to read and pronounce are typically the most memorable. So have fun and see what store names are available to use on Etsy and social media. If you haven’t already thought about selling your Etsy products on Instagram, it’s a great way to promote your work and gain new customers alongside your Etsy store.
When you look at successful websites and online stores they have a very clear theme with consistent brand colours, fonts, and mood. If you will be making, shipping and packaging your items, you have the freedom to choose what you want your brand to be and what you want your store to represent. You want your customers to trust you and know that you have a reliable store and nothing does that better than consistency.
8. Open a separate bank account
Now that you have your Etsy account up and running, it’s a good idea to open a second bank account to keep your new business income and expenses separate from your personal finances. It’s much simpler to have your Business expenses such as materials, costs of goods, fees etc and your income coming in and out of one account, rather than having to manually sift through your personal and business transactions combined. This is very helpful in the long run, especially when you start calculating your taxes. At the end of the year when you’re able to look at the profit (or losses) of your small business, it could be wise to properly look at your options and even determine if you could make it as a self-employed full time artist.
9. Always have detailed descriptions
When you’re a full time artist, who works part-time, has a healthy social life, and sleeps the required amount per day it’s not always easy getting back to buyers. I can not tell you how many times I have wanted to buy something and had to go in a different direction because a seller didn’t answer my question in time.
So make sure you have filled out all of the necessary information about the product and yourself. Knowing small details like “how long it will take for me to respond” can help you to attract and keep new customers. Include the necessary and important information about the product, and anticipate any questions customers may have and try to answer them.
10. Take the time to learn SEO
SEO, or ‘Search Engine Optimisation’ is a type of content optimisation that guides customers to products by using key words and phrases to place the content in the top 10 search results. Learning how SEO works can help to improve your sales and benefits you in the long run. It’s also why so many products on Etsy have those really long names; sellers are including different keywords that customers may be searching for Ie. Gold earrings; (Mothers day/Birthday/Engagement/Gold, silver, rose, decorative, dangaly, hoop).
What fees are involved in running an Etsy shop?
It’s very important to know and consider the fees of selling on Etsy when opening your shop. Let’s get into the details.
It is free to open an Etsy shop, however there are a few necessary fees. Some of these fees, such as the transactional fee, are ones that you would have to pay to sell your work online in most cases, and others are for selling on Etsy:
The Listing Fee
This fee exists because Etsy is a marketplace, and every listing you make is pretty much an advert for your product, but note your listings are very different from paid Ad’s, as you can pay Etsy to push your product to the front page in a bid to get more sales.
There is no limit to how many items you can list
When you create a product listing you will incur a small listing fee of $0.20 USD – the UK equivalent of £0.15, the listing fee is charged when the item is published and lasts for 4 months, meaning you would pay $1 (or £0.75) if you were to list 5 items.
The Transaction Fee
The Transaction fee is an odd one, simply put, it’s for use of the system you and the buyer have used to facilitate the sale. When you receive an order, you will have to pay 5% of the total sales price of the customer’s order. The total sales price being the shipping and product price.
The Payment Processing Fee
You receive a payment processing fee when Etsy takes and gives the payments. The payment processing fee is taken from the total sales price including its postage fees, and any applicable sales tax. The fee is a set rate varying from country to country, and is a secure check out process. In the UK it is 4%.
The Auto-Renew Fee
This is fee is the same price as the initial listing fee, and it occurs for two reasons: The first being if you sell multiples of one product, i.e. Earrings.
Say you have a stock of 10 earrings. When one set sells, you are charged an auto-renewal fee to continue to have the product listed with the remaining 9 sets of earrings. This happens with every purchase until you have sold out of that product.
The second, if your listing hasn’t sold within the 4 months of the initial listing fee. Now, this is something you can change in your settings. But know if you’re making your listing process manual, you will still be charged to relist the products.
UK Specific Fees
Depending on where you live fees might be different, but specifically in the UK there are two things sellers need to look out for:
The UK VAT
As a UK seller you will have to 20% UK Vat on all your fees. Etsy is a UK VAT registered company and must charge VAT to their customers on their specific sales – i.e. your sales and fees.
The Regulatory Operating Fee
Etsy now charges it’s sellers a regulatory operating fee. In an attempt to make taxes fairer between High street shops and Internet Retailers, the British government put a Digital service Tax in place. Etsy, an American company, decided to pass that on to the sellers.
From July 1st 2021, charged UK sellers will be asked for a regulatory fee of ($0.25) £0.18 on every transaction to help cover the cost of compliance.
Making and shipping the product are two very key variables for the cost of selling products on Etsy, you have to ask yourself questions and properly figure out the costs before you start selling, as there is the risk that you might not be making back what you put into the product.
Here’s an example:
Lets say: Susie wants to earn £1000 per month.
– It costs her £5 to make, package and ship each design.
– She wants to sell 10 designs all for £50.
The 5% Transaction fee would leave her with £47.50, a loss of £2.50.
The 4% Payment processing fee takes another £1.90, leaving her £45.60
And if we include the 20% UK Vat and Digital service tax, Susie then has £36.30
Finally taking away the £5 making, packaging and shipping she is left with = £31.30
To make £1000, Susie would have to sell 32 prints every month.
For every sale she would make £31.30, and lose £18.70
We also have to include the initial listing fee: Which would cost £4.80, meaning the auto renewal fee for the 32 would be the same 3 times per year.
With the auto renewal fee being (32 x 3 =) £96, she would have a total loss of (18.70 x 12 = 224.40 + 96 + 4.80 =) £325.20 and make £12,000 per year, without tax!
You also need to factor in the downsides of selling; business and listings may start small, but what if business booms in the summer and then plateaus for the rest of the year? What if you just don’t sell very much within the first four months of listing that product? These are all things to consider.
Is Etsy bad for artists?
Etsy was made by crafters, for crafters, but there is nothing wrong with selling on Etsy as an artist. Whilst selling on your own websites or through galleries are two of the best ways to gain commercial recognition, that doesn’t mean that galleries won’t want to sell/host your work because you sell on Etsy.
As an artist it is key to put your work out there, but a painter may have a very different experience selling than a ceramicist. Selling paintings by turning them into prints is a lot easier than selling a sculpture, as there are fewer risks in packaging and shipping. Artists working in 2D mediums such as illustrations, digital graphics, printmaking, paintings, collage art, or even works on fabric have been known to do well on Etsy. This is why Etsy is a great space for artists.
Essentially, Etsy has been proven to be a great place for artists and crafters to sell their lovingly created pieces of art, especially beginners. It can grant you the experience and skills necessary to embark on your own journey selling your work online.
Need More Advice?
Articles to Help:
HOW TO START SELLING ART ON INSTAGRAM SUCCESSFULLY
HOW TO PACKAGE AND SHIP ARTWORK EFFECTIVELY
12 TIPS FOR SELLING YOUR ART ONLINE (BEGINNERS GUIDE)
Sites to Help:
10 Things I Wish I Knew Before Starting My Etsy
10 Things To Do Before Starting An Etsy Shop
Courses to help:
Selling on Etsy: How to create a successful online shop
Etsy Listings: Learn to Create Etsy Product Listings That Get Seen. For beginner Etsy sellers
Share some of your Etsy tips in the comments below, and if you’ve never shared your art before, submit to become the next Artist of The Month!
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DR OAZ
EXCELLENT CONCISED UP TO THE POINT