Selling on Etsy: Pros and Cons
Etsy is a great place to start selling products that are uniquely ‘you’, and are made to match your taste and style. The platform is all about creativity and individuality. That means it’s a perfect fit for inspired artisans and entrepreneurs who want to connect with similarly minded audiences.
In today’s blog, we’re going to look at the pros and cons of Etsy. If you are deciding if Etsy suits your business, consider its pros and cons. This helps you make the decision. Keep reading to see if your business goals fit the Etsy landscape.
Overview: What is Etsy?
Etsy is an online marketplace where people buy and sell artsy and eclectic products. The platform was launched in 2005 and has never looked back; it remains the number one marketplace for niche and one-of-a-kind products. Today, Etsy is now a massive e-commerce business with over 7.5 million sellers and over 90 million active buyers.
But what makes Etsy so unique? Well, one aspect that sets Etsy apart is its attitude to authenticity and craftsmanship. Etsy is nothing like a generic marketplace; the active Etsy community of sellers and shoppers is deeply invested in the originality and artistic nature of the products.
The platform is dedicated to crafty, handmade, vintage, and unique items. Secondly, Etsy is inviting and easy to use. Even first-time entrepreneurs can use user-friendly tools and templates to create an Etsy store and sell products.
No matter if you’re an artist, designer, or collector, Etsy can be an excellent choice. It works well if you offer handmade goods. However, despite its amazing marketplace dynamics, policies, and fees, Etsy has its share of challenges. Below, we’ll explore the pros and cons of Etsy in detail. This helps you make informed business decisions.
Pros of Selling on Etsy
There are plenty of reasons why an Etsy store might be a good choice for a creative entrepreneur. Here are some of the key advantages of starting an Etsy shop:
1. High Built-in Traffic
Selling on Etsy is great thanks to its large, active, and engaged customer base. Etsy has millions of active buyers, so you can enjoy a worldwide reach without much marketing.
Furthermore, Etsy's algorithm is geared to pull in shoppers who are particularly keen on niche products. Meaning, your products are shown to potential customers who are already looking to buy what you sell.
So, whether you're selling personalized jewelry, custom home decor, or eco-friendly products, Etsy will help you land high-potential leads.
2. Easy to Start Up
Setting up shop on Etsy is super simple. The platform makes it easy to list products, upload photos, and set prices. You can create descriptions without technical knowledge.
Clear step-by-step guides are available on the platform for beginners. They can easily create an account and start their business.
Etsy's custom shop layouts are visually appealing and easy to navigate. It's a great choice for starting an online shop.
3. Resources for Sellers
Etsy has a solid community and resources for sellers. Beyond Etsy's forums, many social groups feature experienced sellers sharing expert advice. They offer tips and insights on marketplace strategies.
The Etsy Seller Handbook includes important resources for new and experienced sellers, as well. This guide covers opening your shop, improving Etsy SEO rankings, and more.
Additionally, Etsy offers educational resources like webinars, workshops, and articles for sellers. These help sellers improve their business skills. Etsy's analytics tools help you track and understand your store's performance for deeper business insights.
Advanced data comes from third-party tools like eRank, Marmalead, and CraftCount. They help optimize listings, track competitors, and follow trends.
4. Etsy Marketing Tools
Etsy offers marketing tools to help sellers promote their products and attract customers.
Offsite Ads is one of the most valuable features. It automatically promotes your listings on platforms like Google, Facebook, Instagram, and Pinterest. Etsy's algorithm assists in targeting customers more interested in your products and enhances the probability that they'll buy.
Etsy also provides Onsite Ads that are displayed onsite, increasing further visibility. With Etsy, you can specify the budget and bid for ad placements. This lets you control marketing costs while benefiting from Etsy's large traffic pool.
Furthermore, Etsy's platform gives you a lot around SEO and optimizing your listings. Using appropriate keywords and descriptions increases your chances of ranking higher in search results. It also helps customers find your product when searching for similar items.
5. Multiple Payment Methods
Etsy offers multiple payment options, allowing buyers to transact easily and helping sellers track their earnings. Etsy Payments lets you accept credit cards, debit cards, PayPal, Apple Pay, Google Pay, and other local payment methods. This gives you a broad acceptance of payment. You never have to worry about payment barriers when serving an international audience.
Also, Etsy Payments offers convenience, as sellers don't need to set up separate payment systems. It eliminates the hassle of managing different payment gateways. Etsy handles the management of your shop's finances, including the exchange of funds and all related details. You can simply have one place to see everything.
6. Low Startup Fees
One of the best things about Etsy for those just getting started is that it has low startup costs. Setting up an Etsy shop is always free. Etsy is a good way for new entrepreneurs or hobbyists to enter the world of online selling.
When you've set up your shop, you only pay small fees when you list a product and when someone makes a sale. This costs $0.20 per item and is a very cheap investment compared to what other platforms charge.
And Etsy also charges a small transaction fee when a sale goes through. Etsy's fee structure is suitable for sellers at every stage of their business. It is easy to start and enables you to scale your store without high costs.
Cons of Selling on Etsy
As mentioned earlier, Etsy offers great benefits to small businesses, creators, and more. However, there are downsides to being on a platform like Etsy.
Let's consider some of the drawbacks to having a store on Etsy.
1. Multiple Seller Fees
The biggest downside of selling on Etsy is having to pay multiple fees. The $0.20 listing fee is not excessive when you first start listing. However, when you are selling a lot of different products, each listing costs you $0.20. With many products, the fees add up quickly.
Additionally, Etsy takes a 5% transaction fee on the total sale price, including shipping. This can reduce your profit margins. Etsy charges a payment processing fee that varies by country. It typically ranges from 3% to 4%, plus a fixed amount per order.
Another negative may be optional advertising fees Etsy offers, such as offsite ads fee. On Etsy, you can run paid ads to promote your products both onsite and offsite. You are charged for clicks on your listings, even if buyers don't make a purchase. This means you pay for exposure even without a sale. It can be frustrating, especially when you're on a budget.
2. Intense Competition
Having millions of active sellers, Etsy is indeed a popular platform. However, it is difficult to differentiate yourself when your product is similar to others on the platform. This makes standing out a challenge.
This type of market can be very competitive since options such as jewelry, home decor, and clothing are saturated. To be successful, you'll need to dedicate a lot of time and energy to marketing and optimizing your listings. Creating unique products is also essential for standing out.
Regardless of how effective your SEO and advertising strategies are, your store competes with many others. These competitors often offer similar items at lower prices or have more reviews. It's hard to get attention if you don't have a USP or a great brand identity.
3. Mass-produced Products Saturation
Etsy is known for handmade, vintage, and unique items. However, the marketplace has become flooded with mass-produced products from sellers focused on profit. This has made it harder for true handmade sellers to get noticed. It also challenges the unique, one-of-a-kind feel of the marketplace.
The influx of mass-produced goods blurs the lines between perceived values. It makes it harder to distinguish artisans offering one-of-a-kind products or small batches. On a large scale, many might not be able to tell a handmade product from a mass-produced item. This trend could take its toll on Etsy's reputation as a marketplace for unique, high-quality items.
4. Brand Identity Control Issues
As a seller, there is also only limited control over the design and branding of the store. Etsy offers some custom options for shop owners, like a store banner and logo. However, these options are limiting compared to having a dedicated website.The ability to fully customize a store allows sellers to create a powerful brand identity.
It is important to understand that branding is about building trust with your customers. If your customers don't get a full cohesive experience, they are less likely to remember you. The basic personalization from Etsy is not going to suffice. If you want to offer a highly customized shopping experience, Etsy may not be sufficient. Its design support is not robust enough for extensive personalization.
5. Lack of Fulfillment Services
Etsy doesn't provide fulfillment services, and its sellers are responsible for their own shipping, packaging, and delivery. This is beneficial for small businesses that want more control over who can use their services.
However, it adds complexity and can be time-consuming, especially as your business grows. Packaging and shipping logistics can consume time that could be used for other tasks. This time could be spent creating new products or engaging with customers.
Without integrated fulfillment services, sellers must source their own shipping solutions and negotiate rates. Additionally, offering free shipping can boost sales and attract more customers. They are responsible for shipping cost and customer service issues, such as lost or damaged packages. This is a disadvantage for someone who would rather focus on creating a handful of products.
6. Frequently Changing Platform Policies
Etsy frequently changes its policies and fee structures. This makes it difficult for sellers to keep pace. Etsy's ever-changing policies can create challenges for shop owners. This includes changes in transaction fees and new rules on product types.
For example, Etsy has a track record of increasing fees on the fly and without warning; such a change can eat away at your profit margin. There have been cases where sellers find their shop unexpectedly suspended. This can happen after Etsy adjusts its content moderation policies. These changes can be a bit much to keep up with for sellers who live off of the platform.
7. Issues with Customer Loyalty
Unlike a standalone website, on Etsy, people focus on the platform itself rather than a particular store. On the one hand, this gives sellers access to a large audience. On the other hand, it makes it difficult to gain and retain loyal customers.
Buyers are already used to shopping in all sorts of shops across the Etsy ecosystem. They're unlikely to feel too attached to any given seller. We know that repeat business is essential for any business. Etsy's environment doesn't make it easy to establish a loyal customer base.
What Products Sell Best on Etsy?
Etsy is ideal for unique, creative, and vintage products. Popular categories include:
- Craft & Supplies
- Handmade Items
- Jewelry
- Wedding Items
- Accessories
- Paper & Party supplies
- Clothing
- Vintage Items
- Home & Living
- Art & Collectibles
Several stores thrive on Etsy, selling products from these categories and more. One such example is the Etsy store CaitlynMinimalist. It has quickly become one of the best-selling destinations for accessories and jewelry.
The shop is known for its clean, simple aesthetic, with pieces that highlight elegance through simplicity. CaitlynMinimalist is a trusted source for custom name necklaces, delicate rings, and bracelets with subtle styles. For quality and thoughtful design, CaitlynMinimalist’s pieces make great gifts or a treat for yourself.
Other Options: Etsy Alternatives
Now that you know the pros and cons of an Etsy shop, it's important to consider other platforms. Etsy is just one option for creative entrepreneurs.
Here are some alternatives to consider, each offering unique advantages:
1. Amazon Handmade
Amazon Handmade was created for artisans and craft sellers. It markets to Amazon's vast customer base, gaining exposure to a wide audience. It also benefits from Fulfillment by Amazon (FBA), which handles storage, shipping, and returns.
However, in terms of its crowding, Amazon Handmade lacks some of the hype enjoyed by Etsy. Amazon Handmade also has a stricter approval process to ensure that sellers offer only handmade and high-quality goods.
2. Shopify
Unlike Etsy, sellers on Shopify can build unique stores with complete control over branding. Being compatible with multiple fulfillment services, it's the perfect solution for expanding business.
However, choosing Shopify means you're free to have a one-of-a-kind storefront. You will have to put in more work to get traffic in.
3. WooCommerce
It is a WordPress plugin that turns a website into an online store. It allows sellers to have full control over their sites: no limits to product types. If you intend to start your own e-commerce presence, WooCommerce is a great choice. It also allows you to devise your own policies.
Keep in mind that, like Shopify, you will need to invest more time and effort. This is necessary for driving traffic to your website.
Is Selling on Etsy Worth It?
While there are advantages to selling on Etsy, there are disadvantages to it as well. With many fees, competition, and limits on the platform, it's also challenging.
It's an attractive platform for creative entrepreneurs with low startup costs who want a built-in audience and seller resources. At the same time, starting and expanding an Etsy business can be challenging due to many fees and competition. There are also limitations on the platform that can make growth difficult.
Deciding whether to sell on Etsy depends on your needs and product type. It also involves navigating the platform's upsides and downsides. In any case, Etsy is a great stepping stone for entrepreneurs looking to establish themselves.
Selling On Etsy Pros & Cons: FAQs
What's driving so many people away from Etsy?
Most sellers stop selling on Etsy because of the fee rise, the crowded platform, and policy changes. All of these can negatively affect profits, leaving sellers to search out a new platform that offers more control.
How to open an Etsy shop?
To set up an Etsy shop, first, you sign up, create an account, then choose your shop name and list your products. Now, fill in your shop policies and add a payment method, and you're ready to trade. Setting up is quick and easy with Etsy's user-friendly interface.
Is it legal to sell on Etsy?
Of course, selling on Etsy is legal as long as you respect the platform's rules. Make sure your products meet Etsy's handmade, vintage, or craft supplies guidelines so you don't get in trouble and avoid any violations.
