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How To Make Money on Etsy: Follow These 5 Helpful Tips

If you’re an artist or a crafter, you might already have an Etsy store, but you might have wondered how to actually make money on Etsy.

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Etsy is the go-to marketplace for arts, crafts, and vintage goods, and it’s not surprising that this has become a home for creative people who want to earn money from their creativity.

With the millions of shops already on Etsy, the fees, and the limited audience, you might be wondering if anyone selling on Etsy really is making money.

The answer is yes, you can indeed make money on Etsy, but the more important question is “how.”

Today, you’ll learn how to make money on Etsy.

Note: If you haven’t set up your Etsy store yet, read our guide to selling on Etsy first and then come right back here.

5 Ways To Actually Make Money on Etsy

1. Choose the Right Products To Sell

If you’ve ever looked for advice for what products to sell on Etsy, you’ve probably read different information.

“Sell products that you genuinely love creating (or sourcing, in the case of vintage items).”

“Sell products that are on Etsy’s bestseller lists.”

But what if the product you’re genuinely passionate about isn’t on Etsy’s bestseller lists?

Here’s the hard truth: following your passion, unfortunately, isn’t enough to build a successful business.

It’s much more practical to do product research and find out what Etsy shoppers are actually buying.

If you already have a product in mind, one way to find out if your product idea is profitable is to simply go to Etsy, use the search function to see if someone is already selling your product idea and if the seller is successfully selling the item.

Check out their profile to see the number of sales they’ve made since they opened so you can have an idea of how well they are doing.

There are countless Etsy sellers who probably aren’t that passionate about what they’re selling. But they all have goals for themselves, and they’re aware that making money on Etsy is going to help them achieve that goal.

And eventually, through several hours of researching about the products, checking out competitors, participating in forums and discussions about that product, you’ll find yourself at least interested enough to keep selling it for years.

I guess if you can take away one thing, it’s this: you don’t have to love what you sell on Etsy, but you do have to love selling.

Note: We’ve written about Etsy bestsellers a while back, and while the list and the ranking may have changed, you can at least get a starting point.

2. Price Your Etsy Products Correctly

Like in any ecommerce business, the key to success is to sell items on Etsy with enough of a profit margin. This is the difference between the selling price and the cost of the item divided by the selling price.

So if you have a product that cost $20, and you sell it for $25, your profit margin is $5/$25 or 20%.

To determine your selling price, you need to take three things in consideration: the cost of the product, your competitors’ price, and the value of the product to the customer.

The cost of your product not only includes the cost of the materials, but also the listing fee per item (currently $0.20) and transaction fee (currently 5%).

Ideally, you need to include your labor, marketing costs, and everything you spend on to create and sell the product. It sounds impossible to calculate this exactly but you can provide an estimate.

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Aside from calculating cost of your product, you would need to do competitor research.

It’s no good to blindly copy the price that your competitors have set, or to compete on a lower price range automatically. You need more information.

Of the millions of sellers on Etsy, there’s a high probability that at least one of them has the same product idea as you.

Research everything about your competitors; not just how much they price the same items but also what other products they sell in their store, their locations, and how many of these competitors there are.

Once you know this information, you’ll be better equipped to know whether to price higher (if your products are unique), lower (there are too many of them and you need to lure sellers away to your shop), or the same (you have competitors but you’re the only one in your location so shipping fees are lower for shoppers in your area)

You do need to be careful if you’re pricing your products lower; your profit margin might turn out to be too low for you to continue operating.

Lastly, you have to apply value-based pricing, which implies the price at which customers think your product offers good value.

That is, how much is a customer willing to pay to get your product?

For instance, a customer paying for a Picasso knows his paintings are much more valuable than the paint, brushes, and canvas he used to paint them, and thus they’re willing to pay millions of dollars to get a Picasso.

On the other hand, a painting by an artist who is not very famous or hasn’t contributed very much to art movements is likely to be priced lower, even if the same amount of paint, brushes, and canvas was used.

You’d also need to consider your target audience and their perception of your products. If you price it too high, they might be turned off (why buy here when they can buy it elsewhere?), while if you price it too low, they’ll think it’s low-quality.

Pricing your Etsy products is a fine balance of these three factors. Don’t be afraid of having to raise or lower prices when anything changes.

3. Run a Successful Etsy Shop

The third aspect of making money on Etsy is creating and maintaining a successful Etsy shop. Here are three ways to ensure your Etsy shop flourishes.

Take clear, high-quality photographs of your items.

Product photographs are the most important aspect of any ecommerce business, but it’s especially important to make money on Etsy.

If you’re selling products that you’ve made yourself, no one else has seen it but you. And posting detailed, high-definition photographs of your products is the most important part of being able to sell your products.

The problem is we’re not all good photographers, and most of us don’t have professional equipment to set up a product photoshoot.

But you don’t need fancy equipment to get good photos. Even mid-priced smartphones nowadays are equipped with cameras that take high-definition photos. Some even have macro lens capabilities.

You can set up a makeshift backdrop with paper or fabric, whether plain or patterned. For the lighting, you can use natural light, though this might take a little scheduling on your end. To increase the amount of light, you can use an aluminum foil-covered piece of cardboard to act as a reflector.

Props to show how your product is used or to show scale are important as well. I can’t tell you how many times I’ve bought something online only to be surprised by how small or how big they are in real life.

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Also, make sure all the photographs of all the products you’re offering on your Etsy shop follow a common theme, like the same backdrop or the same angles.

Write compelling product descriptions.

Thumbnails and photographs make Etsy shoppers click, but the product descriptions they read when they click on these thumbnails are what will make them buy your products.

Don’t just copy your listings from your competitors. Showcase what makes your Etsy shop unique as well as your personality through your writing style.

Make it a point to speak to your target audience and use adjectives and words that will catch their eye.

Write in short, punchy paragraphs, and use bullet points and lists if you can.

But for those who carefully read product descriptions before they actually add to cart, you’ll need to be clear and descriptive. Remember, they can’t touch or feel your products, and so you need to be able to describe your products to them in as much detail as possible.

Lastly, proofread your description before you ultimately submit it. Your product descriptions should be free of any spelling, grammar, or punctuation errors. You can proofread it yourself or hire freelancers to do it for you.

Create an efficient shipping system.

Once your Etsy business grows, you’ll be shipping a lot of packages. It’ll help you a lot if you have a system for packing and shipping your orders.

Set up a station especially for packing and shipping, complete with the supplies you need. It doesn’t have to be a large station; just a dedicated portion of your desk should be enough.

Here are some basic packaging and shipping supplies recommended by Etsy sellers:

  • weighing scale
  • measuring tape
  • a printer (for printing out your own packing slips and shipping labels)
  • bubble wrap
  • padded envelopes
  • packing tape
  • “Fragile” stickers

Eco-friendly substitutes to these materials are increasingly becoming popular, so look into that if they don’t cost too much.

You can also invest in branded shipping materials, such as tape, stickers, tissue paper, notecards or business cards.

If pricing your products already seems daunting, estimating shipping fees may be just as intimidating.

To know more about calculating shipping for both local and international orders, browse through Etsy’s guide to shipping.

4. Formulate an Effective Marketing Strategy

The heart of your Etsy shop is your products, but if no one buys them, your Etsy shop will die. You’ll need to come up with a strategy to place your products in front of potential buyers.

Here are the steps you can take to ensure that you have an effective marketing strategy for your Etsy shop.

Take some time to earn SEO.

You don’t have to be an SEO master who magically ranks their Etsy store to the top of Google search results.

But you should take some time learning how to use keywords. In this age of hashtags, keywords are easier to understand and implement. Etsy allows its sellers to use 13 tags—use them and use them well.

Place yourself in your target customer’s shoes and think about words or phrases they’d use in searching for your products. These words and phrases are now the tags you must use when setting up a listing.

Placing your item in the right category is also an important SEO trick. It’s so simple, yet many miss the chance of categorizing their items properly on Etsy.

Etsy search is predictive, so you can put in a word relevant to your products and it will come up with suggested key terms to use.

You should use specific key terms that are at two or more words, and have them in your title as well as using all of your tags.

Become a master of social media marketing.

Etsy has an advanced search engine within the marketplace and its own lively community.

But this shouldn’t stop you from marketing your products everywhere you can. Fortunately, social media has made marketing an inexpensive and easy thing to do.

Anyone can create a Facebook page or accounts on Instagram, Twitter, Pinterest, and so on.

To market the products you sell on Etsy, you’d have to be super creative in publishing posts.

People’s attention these days is harder to catch, so think outside of the box when sharing your Etsy listings across your social media platforms.

Take advantage of social media functions, such as polls and raffles, not only to increase your customer base but also to create buzz about your products.

As you market your products and interact with your customers directly on social media, you’re also providing excellent customer service in the process.

Start a blog.

Blogging can complement your social media marketing strategy perfectly, as your blog can establish yourself as an expert in your niche and therefore whose Etsy shop can be trusted.

Also, this can branch out into eventually building your own ecommerce website where you can sell your products without having to depend on Etsy.

If you do decide to start a blog, make sure it’s related to the products you’re selling.

For instance, if you’re selling a line of handmade skincare products, blogging about common skincare issues, ingredients to look for in skincare products, and which skincare products are right for certain skin conditions would certainly make sense.

5. Learn From Other Etsy Sellers

When you’re getting into a new venture, the ones you seem to seek out for advice are those who have already done it. Similarly, when asking how to make money on Etsy, Etsy sellers who have been through it all are the best source of advice.

Here are some tips that Etsy sellers wish someone had told them when they were starting out.

Non-DIY-ers are welcome too.

Don’t be put off by the impressive amount of talent at the marketplace.

Even if you don’t knit scarves, sew superhero capes, weave baskets, do pottery, or create other awesome handmade items, there’s a place for you at Etsy.

One type of item you can sell without having to break out the crafter’s toolbox is digital items.

Digital items require no physical craftsmanship, no packing and shipping costs, and almost no waiting time (personalized items may require some waiting time).

Here are some ideas of digital products you can make and sell on Etsy:

  • printable wall art
  • printable planner
  • monthly or weekly calendars
  • wedding planners
  • blog post planners
  • meal planners
  • budget planners
  • habit trackers
  • fitness trackers
  • cliparts
  • icons
  • sticker templates
  • digital patterns for paper
  • coloring book pages
  • resume templates
  • PowerPoint templates
  • website design templates
  • crochet patterns
  • knitting patterns
  • embroidery patterns

Look beyond Etsy.

Etsy is a great marketplace and you can sell from this platform for as long as you like, but all Etsy sellers know that you shouldn’t be relying on Etsy alone.

You should go beyond Etsy at some point in the future because:

  • Your own website continues to be the best selling platform. There are several advantages to choosing Etsy as your main platform for selling, but it is still important to have a website. This way, you can accommodate other customers not on Etsy and you are 100% in control of your marketing, product placement, SEO, and so on.
  • The 5% transaction fee for every sale you make (on top of the listing fee) can add up quite dramatically if you’re selling in the hundreds or thousands of items.
  • Your marketing efforts mostly benefit Etsy. If your products become viral and press comes your way, imagine how much attention Etsy will have (since you have to direct people to your products) instead of referring them to your own website.
  • There’s no way to build a list. Etsy doesn’t give sellers a way to communicate to its buyers after a sale, so it’s hard to up-ell or build a lasting relationship with your customers. Having your own website, on the other hand, gives you endless marketing possibilities and earning potential.

To Etsy or Not to Etsy?

If you’re looking for a sign to open your Etsy shop, consider this your sign!

It’s never too late to start your own business and make money on Etsy with virtually no capital.

Your potential customers are already there. The store is easy to set up, manage and operate. But as you just learned, Etsy stores do have their downsides too!

I recommend you start selling at the established platform first and once you make money on Etsy, slowly create your website and list your products there too.

There’s golden advice with any kind of investment: never put all your eggs in one basket so you don’t risk losing everything in one fell swoop.

Final Thoughts on Making Money on Etsy

As you surely have learned at this point, making money on Etsy is no walk in the park, but if you truly believe in your handmade product idea, it has great potential.

If you want to try selling private label items or dropshipping, or you’re interested in making money with more than just selling, you might want to explore Amazon as well.

Have you started selling on Etsy? How’s it going? Let us know in the comments!

8 thoughts on “How To Make Money on Etsy: Follow These 5 Helpful Tips”

  1. Hey Steve, I’ve been marketing off and on for about 10 years now and I still can’t seem to find results. Everybody wants to tell you where to go spend money for the courses but the courses are more complicated than necessary to get results. I’ve been hit many times over the years with this scam and that scam so, my question is, how can you be sure you are not being suckered into another internet marketing disaster? Is there a way to safeguard against such things?

    Reply
  2. I read a library book about making money on Etsy recently. They recommended to factor in the cost of growing your business, about 5%, into the sale price of each item. There’s also a 3.5% Paypal fee to be aware of as well as the Etsy 3.5% transaction fee.

    I agree with avoiding discounts. I don’t think of Etsy as a cheap, Walmart-type of online shop.

    I am a hardcore Etsy shopper. There are about 4 businesses I regularly buy from, and the average amount I spend is $100-200 per transaction. I pay full retail and I’m okay with that.

    Other sites like Ebay and Amazon are the places for people to go discount-crazy.

    Reply
  3. Hello there.

    Stumbled upon your post – and i was really surprised.

    I did not know that there were something like Etsy. Reminds me of Fiverr , but for craftsmen and craftswomen.

    I liked the part about investment cost and profit margin. As with any business if competition is too high or you can not really sell what you need – the best is to try something else.

    However, if someone wants to succeed with Etsy it will definitely take time and patience.

    Cheers.

    Reply
  4. I wish I’d read this when I started my first store. I didn’t take the time to calculate the operating costs and I ended up closing up shop in less than two months.

    But I did learn that social media marketing is an incredibly useful tool for Etsy store owners. Word of mouth works great too. I live in Orlando so I’m always at Disney; you wouldn’t believe how many Mickey Ears and Disney accessories I’ve seen at the parks that are from Etsy stores!

    Like you mentioned, having an Etsy store does have its downside and not many people are very crafty.

    For those that are, remember to take your Etsy store seriously… yes it started as a hobby, but it has the potential for more.

    Thanks for sharing Steve,
    Diana

    Reply
    • Thanks Diana! There are a lot of things that are easy to overlook when setting up your Etsy store. Even if it’s just a hobby, it should still be run like a business. If you don’t take the time to learn the ins and outs, your store will just end up costing you more money than you can make.

  5. Hey Steve,

    Thanks for yet another informative post! I’ve always thought Etsy was only for those that had their own creative products to offer online. I never thought of being able to use this to market another form of service or product. Thanks for giving me a few new ideas. I look forward to reading your future posts!

    Reply

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